Submission to:

2023-2024 NDIS Annual Pricing Review (APR)

March 2024

Our priorities

Australian Music Therapy Association (AMTA) acknowledges and welcomes this consultation. AMTA is committed to working with the NDIA to ensure continued access to music therapy for participants, delivered by Registered Music Therapists (RMTs). We refer the NDIA to our submissions from previous years, as many of these issues are ongoing¹. Our Review priorities are:

Apply cumulative indexation (as a minimum increase) to therapy supports.
Remove GST from therapy supports.

Priority 1. Apply cumulative indexation (as a minimum) to therapy supports

We are deeply concerned that therapy services, including music therapy, have not had any pricing indexation or increases for five years. This is despite the economic impacts facing providers, outlined in pages 10 and 11 of the consultation paper, which cites rising services inflation (rent, insurance, financial services), and wages growth. AMTA urges the NDIA to apply cumulative indexation in line with the Wage Price Index and Consumer Price Index since 1 July 2019. We would strongly recommend the NDIA continue to apply indexation to therapy services from 2025.

The lack of pricing increase poses a serious risk to sustainability and access to therapy supports within the Scheme. No increases in the current price for therapy supports for five years translates to an increase in costs for therapy providers, including RMTs. This is inconsistent with any other provider group.

Our members expend up to 50% their hourly rates on business costs, excluding staffing costs. Meanwhile, our members are faced with unfounded statements suggesting ‘price-gouging’ and inefficient pricing of therapy supports. Rising business costs paired with current economic conditions raise serious questions about the sustainability of therapy supports in the NDIS, and the NDIA’s commitment to funding therapy supports for participants.

¹ https://www.austmta.org.au/public/151/files/Website%20advocacy/20230413%20AMTA%20NDIS%20PRICING%20REVIEW.pdf https://www.austmta.org.au/public/151/files/Website%20advocacy/20230731%20AMTA%20NDIS%20PRICING%20AND%20PAYMENT%20APPROACHES.pdf https://www.austmta.org.au/public/151/files/Website%20advocacy/AMTA%20Submission_NDIS%20Price%20Review%202020%202021_%20FINAL.pdf

Priority 2. Remove GST from therapy supports

We continue to see inequities in access within the NDIS, stemming from uneven application of GST. AMTA has repeatedly spoken and corresponded with senior Commonwealth government officials, Treasury, and the Minister about issues relating to the GST in the NDIS. Unlike other therapeutic supports, music therapy is not GST-exempt within the NDIS (except when delivering early intervention supports or supports in residential care services). Participants accessing music therapy receive less therapy services than their peers, due to plan costs incurred through GST status. GST status impacts fund expenditure for participants, complexity for planners, parity with other allied health, sustainability of small practices and workforce availability. AMTA urges the NDIS to rectify this inequity and remove GST from all therapeutic supports in the NDIS.

AMTA has serious concerns about the impact of music therapy’s GST status within the NDIS:

RMTs’ GST is payable from NDIS participant funds, reducing their available plan funds and access to music therapy.
Inconsistencies in GST-exemptions adds to the complexity for planners, who determine the funding value for participants’ plans. This is more complex when planners are having to negotiate both GST-exempt and GST-inclusive services.
Inconsistencies in GST exemptions bring complexity to service purchasing by participants. Current GST rules result in changes to prices for individuals over time (for example, as a child turns eight, their music therapy will no longer be GST-exempt). NDIS GST rules also impact individual participants across services (for example, a participant accessing physiotherapy and music therapy will be paying two different hourly rates - one GST-exempt and one GST inclusive).
Disparity in GST exemptions results in an uneven market, where some therapy supports (our allied health colleagues) are funded at the $193.99 rate (GST-free). For music therapy, $193.99 is the GST-inclusive rate.
In multidisciplinary care settings, participants may be charged GST for one practitioner (e.g. RMT), but not for another (e.g. physiotherapist).
Due to their GST status, RMTs experience increased administrative and cost burdens in their private practices and small businesses. After deducting GST, RMTs receive the equivalent of 2018 therapy support prices from the NDIS - significantly lower payment than their allied health colleagues and compounding already significant pricing challenges. This disparity has the potential to negatively impact market availability in the NDIS.

Why isn’t music therapy GST-exempt in the NDIS?

Music therapy is not a GST-exempt health service within the Other Health Services listed under s38-10 of Division 38 of the GST Act. Music therapy was omitted from the table referred to in paragraph (a) of subsection 38-10(1) of the GST Act when it was written in 1999. The evolving nature of health care, growing evidence base and professionalisation of various health professions since that time has made this list outdated and no longer informed by evidence.

Music therapy is a GST-free support within the NDIS when delivering early intervention supports or supports in residential care services. These arrangements are a result A New Tax System (Goods and Services Tax) (GST-free Supply—National Disability Insurance Scheme Supports) Determination 2021. AMTA recommends a new determination to ensure NDIS participants are not paying GST for their therapy or capacity building supports.

Music therapy’s GST status in inequitable. GST status impacts fund expenditure for participants, complexity for planners, parity with other allied health, sustainability of small practices and workforce availability.

Inequities in the NDIS

Children under 8	Children over 8	People living in residential care	People living in the community
GST exempt	GST payable	GST exempt	GST payable

Previously, the NDIA did suggest they would explore the option of paying GST ‘off-plan’, however this has not progressed. The disparity in GST exemption for different participant groups has the potential to skew the market towards early intervention and make it increasingly difficult for older children, young people and adults to access music therapy, and limiting participant choice and control.

Sustainability, the market environment and the Australian economy

The NDIA has a responsibility as market steward, to create an efficient and sustainable marketplace. AMTA has concerns about the sustainability of this market when rising costs and the economic environment is not considered in relation to therapy support pricing.

NDIS provider costs

Our members have told us they expend up to 50% their hourly NDIS rates on business costs, excluding staffing costs. Sole practitioner private practices experience proportionally higher business costs per RMT. According to our 2024 survey, 78% of RMTs providing NDIS therapy supports work in sole clinician practices.

The below chart highlights those costs identified by RMTs as their primary cost drivers.

Primary drivers of RMT service costs

professional supervision
continuing professional development
training
GST
telehealth platform(s)
indirect therapy costs
professional registration
NDIS audit and registration
travel
maintenance of premises
rent
administration
equipment
insurance
therapy
assessment

Cost drivers listed by members include:

higher business running costs, e.g., rent, utilities, petrol for outreach services, and insurances. One member cited a rent increase of 32% over twelve months.
increasing administrative costs, e.g., accounting, practice management software, and telehealth platforms. Inconsistencies in GST exemptions and inclusions add to an already administratively complex system. Some members have employed administrative staff in their practices to manage the complex pricing and billing arrangements for the NDIS.
NDIS-specific costs, e.g., audit costs, and registration with the NDIS (in addition to profession-specific registration with AMTA). These costs are proportionately more significant for small and solo practices.
indirect costs associated with providing high-quality supports to clients with complex needs, including program evaluation and resource development.
staffing costs include insurances, Workcover, superannuation and salaries. Importantly, whilst RMTs have applied CPI to their staff salaries, NDIA has not applied indexation to therapy supports for five years.
quality and safeguarding costs including professional registration, continuing professional development and training.

As noted by Allied Health Professions Australia in their submission, allied health professionals often dedicate more time, resources and coordination to NDIS participants than other providers, resulting in higher service costs. Therapy supports dedicate additional time to working together with other

therapy providers, communicating with key contacts (such as schools, carers, other team members), ensuring their practice for a specific participant is in accordance with current best practice, and supporting families to navigate the NDIS.

With continuing rising costs, a GST-inclusive pricing rate, and a pricing rate that has not shifted, even for indexation, RMTs tell us they are responding to economic conditions by subsidising their NDIS services and reducing their income. Practitioners often provide unpaid or underpaid labour to subsidise a participant’s plan. Items such as consumables, non-client-facing time, and additional consultation for people with complex needs are often absorbed by NDIS providers as a part of delivering ‘best practice’. Some RMTs are reviewing their participation in the NDIS due to excessive and costly administration and regulatory burdens.

25% RMTs providing NDIS supports are registered providers
77% RMTs intend to abandon their NDIS registration

RMTs are registered to improve access to music therapy, to reinforce professional standards and assure participants of service quality and safety

RMTs are de-registering due to costs and/or complexity of an overly burdensome system

In the current economic environment, the provision of NDIS therapy supports will become unsustainable for many practices, impacting the provider market. This ‘market thinning’ will have significant and detrimental impacts on NDIS participants. AMTA recommends that at a minimum the NDIS must apply cumulative indexation (from 1 July 2019) to therapy supports.

RMT workforce & pricing

Our members practices tend to be small in size and therefore are significantly impacted by rising costs and reducing margins.

A smaller sample AMTA survey in 2024 reflects the typical size of RMT practices:

No. of RMTs	Percent of practices
1	78%
2-5	20%
5-10	0%
10+	3%²

² As an outlier, 3% may be overestimating the proportion of practices at this scale.

AMTA’s workforce survey undertaken in 2022 provides some insights into the nature of RMT practice and funding sources:

RMTs work across several employment settings with 38% working with more than one employer.
Private practice is a primary employer for RMTs, together with disability services, education and early childhood, public health and residential aged care.
The three primary funding sources for RMTs in 2021-22 were NDIS, self-funded clients and public hospitals (322 respondents).

RMTs who are NDIS providers report 16% vacancy rates (2024 AMTA NDIS pricing survey).

RMTs are a flexible workforce, delivering care and support to people across the lifespan, providing services across sectors and negotiating various models of care and income streams across different funding schemes. Services vary significantly in the care types provided and represent different costs to providers. For this reason, in our 2024 survey, 10% RMTs reported differing price points within their practice, for example home supports for older people, or therapy groups in schools are priced differently from those charged to NDIS participants. This reflects a difference in the service provided and associated service costs.

Early intervention costs

Music therapy provides unique benefits to early intervention participants, delivering therapeutic benefits to babies, children and their families and carers via inherently motivating and engaging therapies. Music therapy provides significant outcomes:

for babies and children: mood and behaviour, cognition and thinking, communication and social interaction, family connection and relationships, movement and coordination
for families and carers: improved mental health and wellbeing, connection and family relationships.

Our members report delivering early intervention supports is associated with higher costs:

69% RMTs report higher costs for providing early intervention services

Higher costs associated with paediatric resources and subscriptions, certification audit processes, higher equipment wear and tear

Australian Music Therapy Association (AMTA) acknowledges and welcomes this consultation. We welcome the opportunity to discuss any of the points raised in this submission, or collaborate to resolve some of the ongoing issues facing therapy support providers in the NDIS.

Contact:

Bridgit Hogan (she/her) Chief Executive Officer Australian Music Therapy Association ceo@austmta.org.au