Disclosure Log

Document 5 - For Official Use Only

Pricing Reference Group | Item: PRG-2.2

Prepared By David Cullen Chief Economist

Disclosure Log

Pricing Reference Group - Item 2.2 (FOR OFFICIAL USE ONLY)

Discussion Methodology

It is proposed that the NDIA use indexing methodologies:

• Support categories: At 80% labour & 20% non-labour, except Consumables which uses a full non-labour. The reason: Many supports excluding AT are labor-intensive.

Labour indexes can split into two options (Labour Option) or no option (–):

• (a) SCHADS-related labour: FWC increase + ERO;
• (b) WPI

Non-Labour Index refers specifically as CPI.`

Calculations to determine an index value include one from either category above, with weights applied accordingly:`

• (Option A): 80% multiplied by Labour index; plus another factor for non-labour at 20%; OR
• (Option B): Full 100% based on just the non-labor component of support costs; or simply,
• (No Indexation).

Attachment explains how these calculations apply across various NDIS Support Catalogue categories and their respective weighting factors used in each case.

Reasoning

Within Categories like 7—to- 5.6 explained below shows specific application per category within the NDIS Support catalogue:

• Supports under SCHADS Award: In Category (e.g., 1 & 4), most workers’ related services fall here due to this award’s coverage.
• Wage inflation impact without SCHADS Award: For other categories not covered directly via SCHADS but still subject to wage increases (Categories 7 through Category). Thus, labour indexing is necessary there instead using Option #2: Wage Price Index (›).
• Consumables Non-Labour Focus: Most goods listed as consumable do not to reflect changes if funding amounts change.`

Not Subject To Controls or Pricing Adjustments:`

• These are market-priced items set by NDIA for line-item supports such as those found with Assistive Technology and Home Modifications.

Disclosure Log

Pricing Reference Group - May 14th, Item: Item

Exceptions:

a) SDA (Support Delivery Agreement) pricing adjustments have been indexed at a rate that reflects non-labour costs as indicated previously from NDIA’s decision paper on Pricing and Payment dated June 2016. b) Certain items within specific categories listed inside an NDIS Support Catalogues may remain unaffected with respect to inflation indexing because they involve different arrangements associated directly through their inclusion into the NDIS framework; c) The communication regarding inflation-indexing methodologies is planned alongside outcomes derived during annual reviews concerning price control measures.

Disclosure Log

Pricing Reference Group, Item: Attachment A

Below are support categories affected in NDIS Support Catalogue inflationary indexing and relevant option used based on stated method.

Use Methodology a)

Using Labour Option 1:

a). Support Category Assistance with daily life includes SIL, b). Support Category: Assitance social community participation.

Using Labour Option 2:

a). Support Category: Coordination supports, b). Support Category: Improved living arrangements c). Support Category: Increased Social Community Participation,d). Support Category: Finding keeping job,e), Support Catogory: Improved relationships,f). Support Category: Health well-being,g). Support Category: Learning,h). Support Category: Choice Control improved Life Choices,i). Support Category: Daily Living.

Using non-labour at full rate:

a). Support Category: Consumables,b). Within Support category SDA. ####### No Indexation: a) Transport,c) Home Modifications (not including SDA).