NDIA Board Meeting - 9 May 2024

Agenda Item: Annual Price Review 2023-24 draft recommendations (7.2)

Paper Type: For Decision

SLT Sponsor:

David Gifford, Scheme Actuary, Penelope McKay, DCEO Partners, Providers and Home & Living

Link to Corporate Plan: Key Activity 1: Improve participant experience and outcomes with a financially sustainable Scheme.

Draft resolution:

The NDIA Board noted the draft Annual Price Review (APR) 2023-24 including the draft recommendations relating to price increases and noted the financial impacts. The NDIA Board delegated authority to the NDIA CEO to finalise the APR recommendations and report on the condition that the only material change is that the final recommendations have financial implications no greater than the potential removal, subject to further testing, of the current draft recommendations that CPI/Wage indexation is applied for psychology and ‘other supports’. The NDIA Board agreed to recommend to the Minister for the NDIS that he seek Expenditure Review Committee of Cabinet approval of the APR 2023-24 recommendations. The NDIA Board agreed to the Agency developing a pricing transition strategy for providers of last resort. The NDIA Board agreed to the Agency commencing work on pricing for 2025-26. The NDIA Board noted that the Agency will develop a communication strategy for the public release of the APR 2023-24.

Purpose:

1. To seek approval of a strategy for the Annual Pricing Review (APR) 2023-24 comprising:= a) increases to some supports in line with wage indexation and Consumer Price Index (CPI) b) development of transition pricing arrangement for a small number of providers of last resort c) detailed work on options for setting prices for 2025-26, and

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• d) A recommendation that the Minister for the NDIS seek the approval of the Expenditure Review Committee of Cabinet for this approach.

Recommendation

That the Board:

2.1.1 Approve in principle the draft APR 2023-24 recommendations and Report (Attachment A) and delegate to the NDIA CEO authority to finalise the recommendations and report on condition that the only material change is final recommendations have financial implications no greater than the potential removal, subject to further testing, of the current draft recommendations that CPI/Wage indexation is applied for psychology and ‘other supports’.

2.1.2 Note the draft APR 2023-24 recommendations regarding price increases from 1 July 2024 are summarised below and set out in section 5 of this Paper. These draft recommendations have been shared with the Departments of Finance, Treasury, and Social Services and with the NDIS Quality and Safeguards Commission. Feedback was generally positive although Treasury and Finance are yet to provide a view of the proposed CPI/Wage indexation for psychology and other supports would be in line with government approaches:

2.1.2.1 Disability Support Worker (DSW)

• Increase to reflect any changes in the Award minimum wages following the Fair Work Commission’s Annual Wage Review and any increase in the Superannuation Guarantee Charge.
• Remove the 1% temporary loading which was extended to the end of 2023-24.
• Note that current projections of Scheme expenditure: assume an increase of 3.75% of the Award minimum wage; have already factored in the Superannuation Guarantee increase of 0.5% (11.0% to 11.5%) to take effect from 1 July 2024; and assume that the 1% temporary loading is removed, and
• Note that every additional 1% increase in the Award minimum wage (above the assumed 3.75% increase) will add $330 million in 2024-25 and $1,500 million over the forward estimates.

2.1.2.2 Therapy Supports

• Increase for supports delivered by Psychologists on 1 July 2024 in line with the weighted movement over the previous 12 months with no increases for other therapy supports noting this will have a financial impact of $21 million in 2024-25 and $94 million over the forward estimates.

2.1.2.3 Support Coordination

• Level 1 increase as for DSW; no increase for Level 2 or 3.

2.1.2.4 Plan Management

• No increase.

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Short Notice Cancellation Policy

• Maintain the current 7-day short notice cancellation policy for DSW-related supports and reduce it to two clear business days for non-DSW related supports noting this will have a non-material financial impact.

Other Supports

• Increase the price limits for nursing and other supports, not covered by DSW-related supports in line with the weighted movement noting this will have a financial impact of $10 million in 2024-25 and $47 million over the forward estimates.

Background

A strategic overview of the APR was presented to the Board on 27 March 2024. The discussion focused on current concerns on the DSW Cost Model and put forward a proposed position.

The APR consultation concluded in March 2024. This year, a total of 912 submissions has been received through the APR consultation process. Of these, 559 submissions were in response to the Participant Consultation, with 353 in response to the Provider Consultation.

Research and Analysis

For the purpose of the APR, a range of research, statistical analysis and pricing benchmarking has been undertaken to ensure the recommendations are comprehensive. A measure of market concentration that looks at the entry and exit of businesses was analysed which examines the level of business inactivity for DSW, therapy and support coordination.

Due to limitations in the existing financial data sources, this year’s APR seeks to improve on previous methodology by using a range of other data sources for the general financial health of NDIS providers:

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4.2.1 The Ability Roundtable Financial and Workforce Benchmarking Survey data of 55 NDIS providers of DSW supports combining for $6 billion revenue in FY22-23 ($4 billion NDIS revenue) across 65,000 participants.

4.2.2 Results from StewartBrown with a sample of 51 providers with a combined total revenue of $2.5 billion for the 2022-23 financial year, delivering services to over 26,500 NDIS participants.

4.2.3 Mandatory Financial data made available by the Australian Charities and Not-for-profits Commission (ACNC). A representative sample of 100 organisations were selected from those having made a NDIS payment claim in at least 6 months over the last 4 fiscal years.

4.3 Analysis of private billing rates across NDIS therapy supports was undertaken to compare the NDIS prices with the private sector, including regression analyses to test the significance of pricing differences. Other Government Funding Schemes therapy pricing levels was also gathered in analysis.

Draft APR recommendations – Proposed Price Increases

5.1 Below are the draft recommendations by topic that recommend price increases.

5.2 Disability Support Worker Related Supports

• The NDIA, subject to any specific recommendation arising from the current Annual Pricing Review, should increase the price limits for supports that are determined by the NDIS DSW Cost Model from 1 July 2024 to reflect any changes in the minimum wages specified in the Social, Community, Home Care and Disability Services Industry Award 2010 (SCHADS Award) following the Fair Work Commission’s Annual Wage Review and any increase in the Superannuation Guarantee Charge, less 1% relating to removal of the temporary loading.

5.3 Therapy Supports

• The NDIA should increase the price limits for supports delivered by a Psychologist on 1 July 2024 in line with the weighted movement over the previous 12 months in the Australian Bureau of Statistics (ABS) Wage Price Index (Australia, total hourly rates of pay excluding bonuses) and the ABS Consumer Price Index (All Groups, weighted average of eight capital cities) over the 12 months to the March Quarter immediately preceding the indexation date (with an 80/20 weighting).
• The NDIA should not make any further structural adjustments to the pricing arrangements for therapy supports at this time and should not index the price limits for all other therapy-related supports on 1 July 2024.

5.4 Support Coordination

• The NDIA should index the price limits for Level 1: Support Connection services and Psychosocial Recovery Coaches services in line with the indexation of supports determined by the DSW Cost Model in recommendation 1 on 1 July 2024.
• In alignment with strategic outcomes from the NDIS Review and recognising the current period of significant reform, it is recommended that the NDIA maintain existing price limits for Level 2: Coordination of Supports and Level 3: Specialist Support Coordination.

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Short Notice Cancellation Policy

• Maintain the current 7-day short notice cancellation policy for DSW related supports.
• Adjust the 7-day short-notice cancellation policy for non-DSW related supports to two clear business days.

Other Support

• Increase the price limits for nursing and other supports, not covered by DSW related supports, on 1 July each year in line with the weighted movement over the previous 12 months in the ABS Wage Price Index (Australia, total hourly rates of pay excluding bonuses) and the ABS Consumer Price Index (All Groups, weighted average of eight capital cities) over the 12 months to the March Quarter immediately preceding the indexation date (with an 80/20 weighting). This does not include Plan Management.

Draft APR recommendations – Development of a transitional approach for large SIL providers who are at risk

The NDIA should explore options to provide immediate assistance to providers of Disability Services who are experiencing significant financial distress. The purpose of this transitional pricing arrangement is to ensure these providers remain viable pending implementation of the NDIS Review recommendations that are agreed by Government including the development of a new pricing and payment framework. The quantum of additional support available would be significantly less than the cost extending the current temporary loading of 1% for a further year which would be approximately $350 million.

Draft APR recommendations – Development of options for setting prices for 2025-26

There are a number of issues with the current price models, many of which were discussed in the NDIS Review including:

a) The DSW efficient price was a strategy to incentivise operators to become more efficient. It is appropriate to consider whether this strategy is still appropriate.

b) The NDIA lacks sufficient information to make informed decisions as to the impact of the prices it sets.

c) The current price model arguably preferences extremely small businesses with low overheads. Large organisations may benefit from the prices if they are able to achieve economies of scale. However, many medium and large organisations consistently report that the efficient price which does not reflect their actual costs of overheads noting increases in insurance and regulation compliance costs. While the data that the NDIA uses does not support these claims, there is need for further work with better data to set price limits.

d) The model is complex and difficult to understand noting that there is not cost model currently for therapy, support coordination and plan management related supports.

e) The pricing does not reflect quality or outcomes.

f) There is currently little or no incentive for providers to register apart from in relation to markets where registration is compulsory. Given the NDIS Review recommendations regarding provider and workforce regulation, there is a risk that providers will not maintain their registration status.

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7.2. The NDIA remains responsible for the 2024-25 APR irrespective of any move of the pricing function to the Independent Health and Aged Care Pricing Authority (IHACPA).

7.3. The NDIA should work with the sector, providers, and other stakeholders to consider options for setting prices for Disability Supports, including but not limited to development of a new DSW Cost Model. This should include exploration of methods to obtain objective information to inform potential approaches.

Risks

8.1. There is a reputational risk to the Agency for not having adequate financial data for providers. The true costs of service delivery incurred by providers and their financial bottom lines continue to be largely unobserved, which hinders the Agency’s ability to make informed pricing decisions.

8.2. It is noted that a group of provider representative organisations including National Disability Services, Alliance 20, Ability First Australia, Disability Intermediaries Australia, and Allied Health Professions Australia have requested in their Joint Statement: Pricing for a sustainable quality-driven sector an immediate increase of 10% in disability support, therapy, and intermediary prices. There is a risk that provider representative organisations may withdraw from the market if they do not regard the revised price limits as sufficient.

8.3. There has been a campaign from peak bodies calling for a special transition arrangement to assist with the transformation of intermediaries. There is a risk that stakeholders could react strongly to the lack of financial assistance.

Participant Impact

9.1. The APR process and setting NDIS pricing arrangements and price limits is crucial to ensuring a sustainable provider market to deliver supports to NDIS participants.

Sustainability Impacts

10.1. The cost of provision of immediate assistance to providers of Disability Services who are experiencing significant financial distress will depend on various factors including how many providers are assisted, the period of assistance and the level of assistance. It is noted that:

10.1.1. The cost of extending the current temporary loading of 1% for a further year would be approximately $350 million in 2024-25.

10.1.2. The value of the one-off payment made to Disability Support providers for the 2021-22 financial year was approximately $500 million.

10.1.3. A plausible option is to make a smaller level of funding available but targeted at providers who are in greatest distress and whose failure would have the most significant impact on participants (in particular SIL providers).

10.1.4. The option is available to extend this additional assistance to providers of Support Coordination and Therapy services, in addition to Disability Support Providers.

10.2. The recommendation relating to psychology results in additional expenditure of $21 million in 2024-25 and $94 million over the forward estimates. Other recommendations have relatively minor impacts on Scheme expenditure.

10.3. The impact on Scheme expenditure of the draft recommendations in this Paper (without the transitional pricing strategy for providers of last resort) is $11 million in 2024-25 and

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ndis

$59 million over the forward estimates. This estimate assumes that the Fair Work Commission National Minimum Wage (NMW) decision will be 3.75%.

10.4 Estimated Scheme expenditure is highly sensitive to the Fair Work Commission NMW decision.

10.4.1 A decision of 4.5% would add approximately $250 million for 2024-25 and $1,150 million over the forward estimates to the figures above.

10.4.2 A decision of 5.0% would add approximately $430 million for 2024-25 and $1,900 million over the forward estimates to the figures above.

10.5 It is noted that a group of provider representative organisations including National Disability Services, Alliance 20, Ability First Australia, Disability Intermediaries Australia, and Allied Health Professions Australia have requested in their Joint Statement: Pricing for a sustainable quality driven sector an immediate increase of 10% in disability support, therapy, and intermediary prices. Applying such an increase would result in an increase in approximately $3 billion in 2024-25 and $13 billion over the forward estimates.

10.6 The Temporary Transformation Payment (TTP) allowance has been phased out as planned from 1 July 2024. This is the current assumption within the Annual Financial Sustainability Report (AFSR), therefore there is no financial impact.

10.7 The indexation for Capital supports is done through a separate benchmarking process.

Responsibility and next steps

11.1 Following Board approval, the Agency will develop communication materials to support the release of the final recommendations in June 2024. The final recommendations will be published in the 2023-24 APR Report in June 2024 for a 1 July 2024 implementation. Plan indexation will take place in early July 2024 to ensure relevant balances in participants’ plans are increased appropriately.

Attachments

• Attachment A: Draft 2023-24 Annual Pricing Review Report

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Agenda Item 7.2 Attachment A

2023-24 Annual Pricing Review Report

June 2024

ndis.gov.au

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Acknowledgement

The National Disability Insurance Agency (NDIA) acknowledges the Aboriginal and Torres Strait Islander people of this nation and the Traditional Custodians of the lands across which our Agency conducts our business. We pay our respects to the custodians of the land on which we work as well as their ancestors and Elders, past, present and emerging.

The NDIA is committed to honouring Aboriginal and Torres Strait Islander Peoples’ unique cultural and spiritual relationships to the land, waters, and seas and their rich contribution to society.

Copyright and use of the material in this document

Copyright in the material in this document, with the exception of third-party material, is owned and protected by the National Disability Insurance Agency

The material in this document, with the exception of logos, trademarks, third party material and other content as specified is licensed under Creative Commons Attribution Non-Commercial No Derivatives (CC BY NC ND) licence, version 4.0 International. You may share, copy and redistribute the document in any format. You must acknowledge the National Disability Insurance Agency as the owner of all intellectual property rights in the reproduced material by using ‘© National Disability Insurance Agency 2023’ and you must not use the material for commercial purposes.

Reproduction of any material contained in this document is subject to the CC BY NC ND licence conditions available on the Creative Commons Australia site, as is the full legal code for this material.

The National Disability Insurance Agency expects that you will only use the information in this document to benefit people with disability.

Terms that we use

Acronym	Meaning
ABS	Australian Bureau of Statistics
APR	Annual Pricing Review
CPI	Consumer Price Index
DRC	The Royal Commission into Violence, Abuse, Neglect and Exploitation of People with Disability
DSW	Disability Support Worker
FWC	Fair Work Commission
NDIA or Agency	National Disability Insurance Agency
NDIS or Scheme	National Disability Insurance Scheme

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Acronym	Meaning
NDIS Commission	National Disability Insurance Scheme Quality and Safeguards Commission
SCHADS Award	Social, Community, Home Care and Disability Services Industry Award 2010
SIL	Supported Independent Living
WPI	Wage Price Index

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Table of Contents

• 2023-24 Annual Pricing Review Report
  • Executive summary
    • Page 5
  • Introduction
    • Page 16
  • Domestic economic conditions and the care economy
    • Page 21
  • Disability Support Worker related supports
    • Page 39
  • Therapy Supports
    • Page 65
  • Support Coordination
    • Page 96
  • Short Notice Cancellation Policy
    • Page 113
  • Feedback from the Participant Consultation Paper
    • Page 131
  • Appendix A - Feedback from the Provider Consultation Paper
    • Page 142

Executive summary

The National Disability Insurance Agency (NDIA) monitors and reviews National Disability Insurance Scheme (NDIS) price control framework and other market settings to determine whether they are appropriate and reflect the current market conditions.

Annual Pricing Reviews (APRs) are an important part of the monitoring and review process. This requires the NDIA to examine, through engagement with participants, providers and community and government stakeholders, and targeted research, whether the NDIS’ existing price control framework (pricing arrangements and price limits) continues to be appropriate or should be modified.

As part of the 2022-23 APR, extensive consultations with participants, providers and other stakeholders were completed, including:

• Publishing a Consultation Paper and completing analysis of the 912 submissions received.
• Consultations with other government insurance and funding schemes.
• Consultations with the Pricing Arrangements Reference Group.
• Consultations with the Pricing Interdepartmental Committee.
• Consultations with the Department of Veterans’ Affairs and the Chief Allied Health Officer.

A summary of submissions to the Consultation Paper can be found in Appendix A and throughout the report.

NDIS Review

On 7 December 2023, the Minister for the NDIS released the independent NDIS Review. The report maps out 26 recommendations with 139 actions to help restore trust, ensure the Scheme’s sustainability, and deliver a better NDIS experience for participants. Together with the Government, the NDIA will take the time to carefully considered all recommendations and ensure that reforms to be done in a measured and considered way.

The Royal Commission into Violence, Abuse, Neglect and Exploitation of People with Disability

The Royal Commission into Violence, Abuse, Neglect and Exploitation of People with Disability (DRC) was established in April 2019 in response to community concern about widespread reports of violence against, and the neglect, abuse and exploitation of people with disability. The final report was tabled on 29 September 2023. The report consists of 12 volumes outlining 222 recommendations.

ndis.gov.au	[2023-24 Annual Pricing Review](2023-24 Annual Pricing Review)
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recommendations on how to improve laws, policies, structures, and practices to create a more inclusive and just society. A Government taskforce has been established to consider the recommendations, with the NDIA represented within this group.

1.2 Disability Support Worker related supports

The provider market has demonstrated significant growth and flexibility to meet increasing demand. In the six months to December 2023, 44% (283,406) of active NDIS participants accessed Disability Support Worker (DSW) related supports, a 12% increase from the same period in 2022. This period also saw a 21% increase in the number of active providers, totalling 122,857. Financially, payments for DSW-related supports during this timeframe amounted to $13 billion, accounting for 64% of the total $20.4 billion in payments made to providers, which reflects a 27% growth in DSW-related support payments year-over-year.

This significant growth within the market is underscored by the performance between different provider categories: registered providers experienced a slight decline in their numbers but an increase in payment amounts, while unregistered providers saw a substantial increase in both numbers and payment amounts. This highlights a growing market that continues to meet the increasing demand.

The NDIA uses the DSW Cost Model to set price limits for DSW-related supports. This model is designed to reflect the costs of a reasonably efficient provider would likely incur per billable hour of support. It includes base salary and shift loadings aligned with the Social, Community, Home Care and Disability Services Industry Award 2010 (SCHADS Award), direct on-costs such as superannuation and leave entitlements, operational overheads like supervision and training, and corporate overheads which account for essential Human Resources and Information Technology.

The SCHADS Award sets the minimum standards for DSWs, stipulating wage levels and conditions that are foundational in establishing NDIS price limits for DSW-related supports in conjunction with broader market trends and regulatory requirements. The multiplicative nature of the model means that when the NDIA passes on increases to minimum wages, as set by the Fair Work Commission through the SCHADS Award, it flows through to the final output of the model. This implies that wage changes and other cost components flow through the model, partially reflecting challenges of doing business in the current economic environment even in the absence of direct adjustment to the overhead and margin parameters.

Feedback received from the sector and peak bodies highlights challenges in alignment to evolving economic conditions and provider realities. Stakeholder feedback has suggested a potential underestimation of corporate and operational overheads, such as insurance and compliance costs given the model is currently based on previous benchmarking survey results. The feedback received through the ndis.gov.au 2023-24 Annual Pricing Review

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APR consultation and ministerial correspondence has raised concerns that the current price limits may not fully accommodate the delivery of more specialised and complex supports for some NDIS participants, which may restrict providers’ ability to recover adequate costs.

The NDIA is actively enhancing the DSW Cost Model by integrating more robust and diverse data sources. This includes partnerships with industry stakeholders on benchmarking surveys and leveraging mandatory financial reports submitted to the Australian Charities and Not-for-profits Commission (ACNC). On balance, these new data offer insights of providers’ financial performances from different perspectives, which ultimately enriches the decision-making process. This is important so that the varied and evolving conditions of the NDIS provider market are considered. The NDIA should work with the sector, providers, and other stakeholders to consider options for setting prices for Disability Supports, including but not limited to exploration of a new pricing approach. This should include exploration of methods to obtain objective information to inform potential approaches.

Analyses in this report highlights that there is considerable variability in financial performance among organisations and the persistent tightness in the care and support workforce. In the absence of representative data of the NDIS provider population, the NDIA does not have sufficient evidence to support a structural change to the DSW Cost Model currently. Therefore, it is considered appropriate to pass on minimum Award wages and national employment standard changes to superannuation at this time, which include an increase in employer superannuation contributions from 11% to 11.5%, effective from 1 July 2024.

Recommendation 1:

The NDIA, subject to any specific recommendation arising from the current Annual Pricing Review, should increase the price limits for supports that are determined by the NDIS Disability Support Worker Cost Model from 1 July 2024 to reflect any changes in the minimum wages specified in the Social, Community, Home Care and Disability Services Industry Award 2010 (SCHADS Award) following the Fair Work Commission’s Annual Wage Review and any increase in the Superannuation Guarantee Charge.

Provider Financial Reporting

The NDIA believes that as a market steward, it is imperative to be able to monitor and track the financial performance of providers within the sector to ensure that they remain financially viable. Feedback throughout the APR consultation and through ministerial correspondence has indicated a need for increased collaboration with the DSW-related support provider market to ensure that price limits set by the DSW Cost Model reflect the efficient cost of support delivery.

In the near term, the NDIA should aim to address the present gap in representative financial information over the next financial year through collaboration with the

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Recommendation 2

The NDIA should work with appropriate support providers and provider representative organisations to consider options for setting price limits for Disability Supports, including, but not limited to, development of a new pricing approach. This should include exploration of methods to obtain objective financial information from service providers to inform potential approaches.

1.2.2 Transitional Financial Assistance for Registered DSW-related Support Providers

There is consideration by the NDIA for more immediate financial assistance options for providers of DSW-related supports. This is supported by data from the APR consultation, ministerial correspondence, the Ability Roundtable and StewartBrown benchmarking surveys, which reveal substantial financial variability across the sector.

Analyses discussed in this chapter show that smaller organisations rely heavily on NDIS revenue, and larger entities report significant financial strain. This variability underscores the precarious financial positions of providers, suggesting a potential need for more immediate financial support to help sustain essential services critical to the well-being of NDIS participants.

Moreover, the complexity of assessing the financial health of charitable and not-for-profit NDIS providers, who serve across a range of sectors, complicates the financial picture. The sample analysed suggest many organisations may be investing in growth through acquisitions and capital expenditure funded by loans, adding to their financial burdens.

With the currently available information, it is proposed for a tailored intervention to assist alleviate some financial pressures of providers. This would enable providers to maintain continuity and stability in their services without compromising their financial health, thereby ensuring a resilient and effective support system for NDIS participants until the Agency can better address more systemic pricing concerns raised by the sector.

Recommendation 3

The NDIA should explore options to provide immediate financial assistance to registered NDIS providers who deliver Disability Support Worker related

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supports. This initiative aims to alleviate immediate financial pressures for organisations that are experiencing significant financial distress. Working closely with the sector, the NDIA should define clear eligibility criteria, ensuring that support is targeted and effective for the intended cohort.

1.2.3 Temporary Loading

The temporary loading of 2% was introduced on 1 July 2022 to the DSW Cost Model as a short-term measure to assist providers in managing the increased costs associated with COVID-19 and changes stemming from the SCHADS Award changes. The loading was reduced on 1 July 2023 to 1% to continue to support transitional costs.

In light of recommendation three’s more targeted approach to provide financial assistance for providers experiencing financial distress, the NDIA considers that it is appropriate to cease the loading effective 1 July 2024.

Recommendation 4

The NDIA should cease the temporary loading applied to the NDIS Disability Support Worker Cost Model from 1 July 2024.

1.2.4 Other labour related supports

The NDIA recognises there are supports that are not within the scope of the 2023-24 APR, nor tied to the DSW Cost Model and are neither price limited nor benchmarked. Notably, nursing supports fall into this category, alongside other core and capacity-building supports like personal domestic cleaning and house or yard maintenance.

Given the recent aged care reforms, which include up to a 25% wage increase for aged care workers and potential future adjustments to the Nursing Award, it is crucial that these supports remain in line with their applicable markets. Failing to adjust the

1 This does not include Plan Management supports.

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Recommendation 5

The NDIA, subject to any specific recommendation arising from the current Annual Pricing Review and any future reviews, should increase the price limits for nursing and other supports, not covered by Disability Support Worker-related supports or Capital supports, on 1 July 2024 in line with the weighted movement over the previous twelve months in the ABS Wage Price Index (Australia, total hourly rates of pay excluding bonuses) and the ABS Consumer Price Index (All Groups, weighted average of eight capital cities) over the 12 months to the March Quarter immediately preceding the indexation date (with an 80/20 weighting). This recommendation does not include Plan Management.

Therapy supports

The Australian therapy market encompasses a wide array of services provided by allied health professionals, who are typically university-educated with specialised expertise in preventing, diagnosing, and treating various conditions and illnesses. While the NDIS forms an important part of this landscape, allied health services extend beyond NDIS funding. These services are also accessed through various other arrangements, including Medicare subsidies, private health insurance, where it is common for out-of-pocket payments to be made by the consumer, other government schemes, and the Department of Veterans Affairs (DVA).

The NDIS therapy market continues to expand significantly. In the six months to December 2023, 59% (379,296) of the total 646,449 active participants received therapy supports through their plans. During this period, the number of providers delivering therapy supports grew to 52,736, reflecting a 14% increase from the same period in 2022. Notably, payments made to unregistered providers increased by 60%, although registered providers still received the majority of payments - 65% or $1.3 billion of total payments. This demonstrates growth in both the provider base and financial volume within the therapy sector.

The NDIS therapy market operates in a manner that closely aligns with the characteristics of a deregulated, or private market, more so than other NDIS sub-markets. These price limits are closely linked to the dynamics of the private market, ensuring that NDIS pricing remains competitive and reflective of current service costs. Accordingly, other government schemes and the private billing market serve as suitable comparators to assess the appropriateness of the NDIS price limits.

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The 2023-24 APR analysis of other schemes showed that while some have increased their pricing or funding levels, NDIS price limits remain consistent with the majority of therapies provided across these schemes. It is important to note, however, there is significant variation in therapy pricing and funding levels among different schemes.

The analysis of private billing rates for NDIS-related weekday in-room therapy services in the 2023-24 period offers detailed insights into the therapy market. The dataset, consisting of 1,791 observations, was compiled by the NDIA from provider websites across Australia. This sample size is derived from previous annual pricing reviews, ensuring continuity and comparability over time.

The sample reveals a wide distribution of therapy types, with physiotherapists, psychologists, clinical psychologists, and dietitians the most common observation. This diversity highlights the varied therapeutic needs catered to by the NDIS, reflecting the scheme’s comprehensive coverage. Such insights are vital for the NDIA as it aims to ensure that the NDIS price limits are competitive and equitable, aligning closely with market rates to adequately support providers while ensuring affordability for participants.

Overall, the private billing rates analysis provides a crucial benchmarking tool for the NDIA, helping to align NDIS pricing structures with the market and ensuring the sustainability of therapy services under the scheme. These analyses indicate that NDIS price limits generally match or exceed the rates for most therapies nationwide. However, regression analysis highlights statistically significant variances among therapies, which could correspond to differences among therapy professionals such as in qualifications, skills, and experience.

1.3.1 Psychology

Review of the current price limits for Psychologists against private billing rates and other comparable government schemes indicates that the current limits generally sit below the prevailing market rates.

Analysis reveals that the mean billing rate for psychologists exceeds the NDIS price limits in both state groupings, with a mean rate of $228.6 and $260.3 for Psychologists and Clinical Psychologists, respectively. Similarly, median billing rates for these professionals surpass NDIS limits, standing at $228.0 and $255.0. Moreover, the 75th percentile billing rates indicate that a significant portion of appointments exceeds NDIS price limits, highlighting a clear difference between market rates and NDIS price limits. This suggests that it is appropriate for the NDIS to increase price limits to better align with prevailing market rates and ensure fair compensation for psychology services.

Recommendation 6

The NDIA should increase the price limits for supports delivered by a Psychologist on 1 July 2024 in line with the weighted movement over the

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• previous twelve months in the ABS Wage Price Index (Australia, total hourly rates of pay excluding bonuses) and the ABS Consumer Price Index (All Groups, weighted average of eight capital cities) over the 12 months to the March Quarter immediately preceding the indexation date (with an 80/20 weighting). Specifically, this should be for support line items: ‘Assessment Recommendation Therapy or Training – Psychologist (15_054_0128_1_3),
• ‘Early Childhood Supports – Psychologist (15_001_0118_1_3)’, and
• ‘Specialist Behaviour Intervention Support (11_022_0110_7_3)’.

1.3.2 Other Therapists

Review of the alignment of the NDIS price limits for other therapists against the private billing rates and other comparable schemes suggests a general compatibility between the NDIS price limits and prevailing market rates. In general, for most therapists, mean and median billing rates closely mirror the NDIS hourly price limits, which are set at $193.99 in most regions, suggesting that the current NDIS price limits adequately reflect market norms. Even when considering some therapies which means, medians and 75th percentile billing rates exceed NDIS price limits, the frequency of such instances does not indicate a systemic pricing concern that hinders participants from accessing these services relative to other clientele.

Recommendation 7

The NDIA should not make any further structural adjustments to the pricing arrangements for therapy supports at this time and should not index the price limits for all other therapy-related supports on 1 July 2024.

1.4 Support coordination

Support coordinators play a pivotal role in the NDIS by helping participants understand, navigate, and effectively use their NDIS plans to achieve their personal goals. These professionals tailor services to individual needs within the framework of participants’ plan budgets. Support coordination is categorised into three levels based on complexity and participant needs, with corresponding price limits set to ensure a balanced pricing model.

The support coordination market is experiencing significant growth, reflected in the number of providers and the volume of payments. From the first half of 2022 to the same period in 2023, there was an 18% increase in payments amounting to $531 million, demonstrating a growth in demand for support coordination. The market is characterised by a mix of registered and unregistered providers, underscoring a market that is decreasing in concentration.

Providers report a range of challenges, including the financial implications of compliance and registration, which influence their operational costs and pricing strategies. On the participant side, there is a spectrum of satisfaction levels with support coordination services. Positive feedback often highlights the crucial support

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in navigating NDIS processes, while criticisms tend to focus on issues like the high turnover of coordinators and inconsistency in service quality.

Feedback through the APR captured the complexities of the support coordination sector, reflecting both its critical role in enabling participant outcomes and the operational challenges faced by providers. The dynamic growth of the market, coupled with the feedback from stakeholders, suggests ongoing adjustments and evaluations are necessary to align the services with the evolving needs of participants and the operational realities of providers.

It is considered reasonable that Level 1 support coordination supports currently determined by the DSW Cost Model, continue to be done so, including any applicable changes that occur for DSW supports.

Recommendation 8:

The NDIA should index the price limits for Level 1: Support Connection services and Psychosocial Recovery Coaches services in line with the indexation of supports determined by the Disability Support Worker Cost Model in recommendation 1 on 1 July 2024.

Analyses in the chapter highlights that whilst the market for support coordination continues to evolve, there is no evidence to suggest that supply is not meeting demand. In light of significant upcoming reforms recommended by the NDIS Review, which aim to enhance service integration and improve participant outcomes, there is a strong rationale to mitigate potential market disruptions during this transformative period. Any changes to pricing at this point of time would be up for further changes until the reforms in the intermediary sector settle. On balance, it is not recommended to change the price limits of Level 2 and Level 3 support coordinators to ease undue disruption.

Recommendation 9:

In alignment with strategic outcomes from the NDIS Review and recognizing the current period of significant reform, it is recommended that the NDIA maintain existing price limits for Level 2: Coordination of Supports and Level 3: Specialist Support Coordination.

1.5 NDIS short notice cancellation policy

The NDIS short-notice cancellation policy is designed to protect service providers from financial losses when participants cancel appointments within a 7-day window. Providers can claim up to 100% of the agreed fee if a participant cancels late or fails to show, provided certain conditions are met. These include having a pre-existing agreement with the participant, adherence to the NDIS Pricing Arrangements and Price Limits, and the inability of the provider to find alternative billable work for the

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This policy aligns with the SCHADS Award, which supports fair labour practices and helps manage financial risks for providers.

There is a need to consider a balance in the short-notice cancellation policy for the market. One that allows providers sufficient ability to recover costs with incentives to work with the participants they are supporting to minimize the number of short notice cancellations that occur. Meanwhile, participants are given reasonable time to provide notice for cancellations considering unforeseen circumstances to minimize using NDIS funding to pay for supports they do not receive. This includes unexpected illness, urgent appointments, or changes in personal circumstances.

In the three years from 2020-21 to 2022-23, the costs linked to short notice cancellations nearly doubled, increasing from about $60 million to just under $120 million. This rise highlights the need for effective management of such cancellations. Additionally, therapeutic and early childhood supports, which account for 37% of all claims, are identified as the categories most affected by cancellations.

Feedback on the cancellation policy from providers and participants indicates varying experiences. Providers note a diverse range of cancellation policies within the NDIS market, which can lead to confusion among participants, some of whom only understand the financial implications after being charged for a cancelled service. The diversity in policies reflects varying levels of understanding and implementation across providers. Participants have expressed concerns about the sudden need to cancel due to unpredictable circumstances such as illness or emergencies, leading to calls for more flexible cancellation practices that consider the unpredictable nature of participants’ lives.

Providers delivering DSW-related supports may incur such costs when unable to redeploy employees to other work or set up a make-up shift for the employee. This is as these workers are generally under the SCHADS Award, which has a legislative requirement regarding client cancellations. This requirement is unique for employees engaged under the SCHADS Award in the care sector.

On balance, these observations underscore the operational and financial challenges presented by the NDIS short-notice cancellation policy. The policy aims to balance provider and participant interests, but the required costs and varied experiences suggest a need for continuous evaluation and adaptation to ensure it achieves its goals effectively and fairly.

Recommendation 10:

The NDIA should retain the existing 7-day short notice cancellation policy for applicable supports determined by or derived from the Disability Support Worker Cost Model from 1 July 2024. Providers of Disability Support Worker supports must continue to make reasonable effort to find alternative billable work for the staff involved.

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For non-DSW related supports (non-SCHADS related), such as therapy services, lack a standardised legislative or Award requirement for client cancellations. Through consultation and research conducted, there is a case that the maximum of 7-day policy may not be necessary for non-DSW supports. There appears to be a greater usage of a 2-day cancellation policy in the sector, particularly among therapy providers, which supports a potential for a shorter cancellation policy.

On balance, the NDIA believes there to be mechanisms and methods already being utilised by the sector to assist participants limiting cancellations which could make the reduction in notice period feasible.

Recommendation 11

The NDIA should adjust the 7-day short-notice cancellation policy for non- Disability Support Worker-related supports to two clear business days from 1 July 2024.

Introduction

Context

The National Disability Insurance Scheme (NDIS) was established in 2013 to support people with disability to pursue their goals, to help them to realise their full potential, to assist them to participate in and contribute to society, and to empower them to exercise choice and control over their lives and futures. The NDIS provides funding to eligible individuals (“participants”) so that they can purchase, in the open market, the disability related goods and services (“supports”) that they need.

The National Disability Insurance Agency (NDIA) monitors and reviews its price control framework and other market settings to determine whether they are still appropriate and reflect the current market conditions.

NDIS Review

On 7 December 2023, the Minister for the NDIS released the independent NDIS Review. The report maps out 26 recommendations with 139 actions to help restore trust, ensure the Scheme’s sustainability, and deliver a better NDIS experience for participants.

The Review’s recommendations included legislative reform to return the Scheme to its original intent and improve the experience of participants. This included legislation to improve eligibility and access as well as an early intervention pathway for children. Changes will be guided by good legislation and good plans for implementation — developed in partnership with people with disability and the disability community.

Together with government, the NDIA will take the time to carefully considered all recommendations of the NDIS Review including the development of legislation, NDIS process reform — all the way through to implementation.

The Royal Commission into Violence, Abuse, Neglect and Exploitation of People with Disability

The Royal Commission into Violence, Abuse, Neglect and Exploitation of People with Disability (DRC) was established in April 2019 in response to community concern about widespread reports of violence against, and the neglect, abuse and exploitation of people with disability.

The final report was tabled on 29 September 2023. The report consists of 12 volumes outlining 222 recommendations. It contains recommendations on how to improve laws, policies, structures, and practices to create a more inclusive and just society. A Government taskforce has been established to consider the recommendations, with the NDIA represented within this group.

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Annual Pricing Review decision making framework

The NDIA conducts regular, thorough assessments of its pricing framework and market dynamics through the Annual Pricing Review (APR), which integrates insights from the evolving Australian economic landscape, labour market statistics, and sector-specific conditions. This process is reinforced by stakeholder consultations and analyses of impacts from legislative changes, and market movements, ensuring data-driven and relevant pricing strategies for NDIS-related supports.

Figure 1: APR Conceptual Framework

Extensive consultation with internal and external stakeholders	Consideration and analysis of current economic conditions
Peer review through engagement with PARG and Pricing IDC	Research into scheme statistics
Research Into comparable sectors or benchmarking where relevant	Research into business dynamism

Terms of Reference for the Annual Pricing Review

The APR acknowledges the comprehensive insights from the Independent NDIS Review and the Royal Commission into Violence, Abuse, Neglect and Exploitation of People with Disability (DRC). While these reviews offer extensive recommendations for systemic reform, this APR focusses specifically on non-structural adjustments to the current price settings. It aims to implement immediate, impactful improvements with the existing framework of pricing established in the NDIS Pricing Strategy 2019, ensuring ongoing supply of support and continuity of access to services for NDIS participants, while broader structural reforms are considered for future implementation by the Australian Government.

The APR will examine, through engagement with participants, providers and community and government stakeholders and targeted research, whether the Scheme’s existing price control framework (pricing arrangements and price limits) continue to be appropriate or if modification is required.

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The APR will have an increased focus on participants, with a dedicated consultation paper to gather participants’ perspectives. This participant engagement will ensure that the APR is inclusive of the voices of both providers and participants.

In particular, the APR will review the pricing arrangement and price limits:

• a) that apply to supports delivered by disability support worker (DSW) by updating the NDIS Cost Model for Disability Support Workers;
• b) for therapy supports to ensure participants receive value for money, while providers strive to improve quality of service and increase efficiency, with a particular emphasis on pricing benchmarks;
• c) for support coordination to promote service quality and value for money, with a focus on participants’ experiences when utilising support coordinators to oversee their supports;
• d) in relation to the NDIS Cancellation policy, which changed from two days to seven days in line with the Social, Community, Home Care and Disability Services (SCHADS) Award. The analysis will examine the impact on participants’ choice and control.

2.4 Consultation overview

The 2023-24 APR consultation, commencing on 25th January 2024 and concluding on 10 March 2024 for providers and 17 March 2024 for participants. This year’s consultation featured the publication of two key documents: a Provider Consultation Paper and a Participant Consultation Paper. These papers invited a wide range of stakeholders, including providers, participants, community members, and government entities, to contribute their perspectives and expertise. The robust response, especially from participants via the Form.io survey, underscores the community’s active participation and the effectiveness of using varied submission formats to accommodate diverse needs. A total of 912 submissions were recorded, a significant increase from the previous APR’s 304 submissions.

Submissions were categorised as follows:

• Providers: Contributed 353 submissions, offering insights and feedback from a service delivery perspective.
• Participants: Contributed 559 submissions, broken down as:
  • 546 submissions received through the Form.io platform
  • 11 submissions were made through traditional paper forms
  • 2 submissions were presented in an easy read format.

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A summary of submissions to the Consultation Paper can be found in Appendix A and throughout the report.

2.4.1 Consultations with other government insurance and funding schemes

The NDIA collaborated with 16 Commonwealth and State Schemes to obtain their therapy pricing. Responses from 13 schemes were received. Schemes that assisted with information were:

• Catastrophic Injuries Support (CIS) Scheme,
• ComCare,
• Department of Veterans’ Affairs (DVA),
• Home and Community Care Program for Younger People (HACC-PYP),
• Lifetime Support Scheme (LSS),
• Motor Accidents Insurance Board (MAIB),
• Medicare Benefit Scheme (MBS),
• National Injury Insurance Scheme Queensland (NIISQ),
• Return To Work SA (RTWSA),
• State Insurance Regulatory Authority (SIRA),
• Victorian Transport Accident Commission (TAC),
• WorkSafe VIC, and
• WorkCover WA.

2.5 Pricing Arrangement Reference Group

The work of the APR was overseen by the NDIA’s Pricing Arrangement Reference Group, which provides advice, through the Chief Executive Officer of the NDIA, to the NDIA Board on price control arrangements for the NDIS. This is to ensure price regulation activities and decisions are coordinated to support the best possible outcomes for NDIS participants during the transition to a competitive marketplace.

The current members of the Pricing Arrangement Reference Group are:

• Flavio Menezes is a leading economist in market design, auction theory, competition, regulation, and incentives. He is a Professor of Economics and the Director of the Australian Centre of Business and Economics at the University of Queensland. He is also the Chair of the Queensland Competition Authority. As a highly regarded expert, he is sought after for his economic counsel by various private and public organisations.

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• Matthew Clarke works as an Associate Director at Marsden Jacob specializing in price regulation, cost recovery and funding. He has a proven track record of conducting complex pricing reviews for state, territory, and federal government agencies across sectors.

• Felicity McNeil PSM has a track record of managing complex healthcare budgets including such as the Pharmaceutical Benefits Scheme (PBS) and other subsidy national programs, both within the Health and Finance portfolios., which she has since channelled into her volunteer work helping patient and clinical groups to participate in government processes.

• Deborah Cope brings over 35 years of experience in analysing, reforming, and implementing social, economic, and environmental policies across all levels of government. She was a member of the New South Wales (NSW) Independent Pricing and Regulatory Tribunal (IPART), and the Principal of PIRAC Economics.

• Jim Cox, PSM is Deputy Chair of the Australian Energy Regulator. He contributes advice from his experience in price regulation, economics, and social policy issues.

2.6 Pricing Interdepartmental Committee

The Pricing Interdepartmental Committee was established in November 2022 to discuss strategic matters related to pricing in the NDIS and its wider implications within the current economic environment. This forum allows the NDIA to proactively work with key Australian Public Service stakeholders with broader Government considerations to NDIS pricing-related matters.

The committee consists of representatives from Department of Social Services, Department of Finance, NDIS Quality and Safeguards Commission (NDIS Commission) and the Commonwealth Treasury.

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Domestic economic conditions and the care economy

Pricing regulation in the current economic environment

Australian economic conditions can impact the efficiency and sustainability of the market for disability goods and services and therefore influence whether the NDIS price control framework continues to be appropriate or if modification is required.

The NDIS is part of the care and support economy² and the broader Healthcare and Social Assistance (HCSA) sector³. Economic trends in these sectors could potentially affect the efficiency and sustainability of the disability market. The NDIS both impacts, and is impacted by, the care and support economy and the HCSA sector, particularly the care and support economy as the NDIS comprises a greater proportion of this sector relative to the HCSA sector. However, given the diversity of the care and support economy and the HCSA sector, it is important to exercise caution when drawing comparisons between trends in the HCSA sector and the specific trends within the NDIS workforce.

Data on economic conditions suggest strong demand for health and disability services, a tight labour market for health and disability related workers, as well as higher costs given high general inflation and wage inflation.

Businesses in the care and support economy are reporting strong confidence in the outlook for their industry. Despite the slowing in Australian economic growth, the HCSA sector is resilient due to the ‘non-discretionary’ nature of the services provided

² This comprises the paid provision of disability support services, early childhood education and care, veterans’ care, and aged care. Department of the Prime Minister and Cabinet. (2023). Draft National Strategy for the Care and Support Economy._https://www_pmc.gov_au/resources/draft-national- strateqy-care-and-support-economy/summary

³ The Health Care and Social Assistance sector includes organisations mainly engaged in providing human health care and social assistance such as hospitals, General Practitioners and specialists, allied health, diagnostics, aged and other residential care, child care and disability care.

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(generally necessities) and continued demand from population growth and an ageing population. The HCSA is also heavily reliant on funding from the public sector and the NDIS is a major and fast-growing item of government expenditure.

High inflationary environment can increase cost pressures on providers delivering supports to NDIS participants such that these providers may then be under pressure to raise prices for their services. The HCSA sector had significant inflation and wage growth in the year to December 2023, above the all-industries’ growth rates, suggesting strong upward pressure on input costs and wages. One of the reasons for wage inflation in the sector has been increases in Award wages, such as a 15% increase in minimum wages for direct care employees working in aged care.

Jobs and Skills Australia considers many NDIS-related occupations to be in “shortage”. This includes aged and disabled carers, personal care and special care workers, physiotherapists, speech professionals and audiologists, occupational therapists, and psychologists. Some of these occupations have vacancy numbers that are high compared with their total occupational employment levels (i.e., speech professionals and audiologists, occupational therapists, and physiotherapists).

3.2 NDIS supports

Disability Support Workers (DSWs) are an essential part of the NDIS, bridging the gap between healthcare services and daily living assistance for individuals with disabilities. DSWs provide personalised support that enhances the independence of NDIS participants.

Therapy supports, including early childhood interventions, are also an essential part of the NDIS by playing an important role in assisting participants to achieve their personal goals. These supports are delivered by a diverse range of professionals, such as Occupational Therapists (OT), Speech Pathologists (SP), Physiotherapists, Psychologists, and many others.

3.3 Economic outlook

Economic growth, as measured by real Gross Domestic Product (GDP), has been slowing from above average rates, given lower household consumption from high

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inflation and increased interest rates*. The Commonwealth Treasury projects real GDP growth to be 1.75% for 2023-24 before rising in the following year®. See Figure 2 for historical and forecast GDP growth outlook.

Figure 2: Australian Real GDP Growth from 2000 to Forecasted 2024

Per Cent
Actual
5
4
3
2
1
0
-1

Businesses in the care and support economy are reporting strong business confidence in the outlook for their industry®. According to the Roy Morgan Business

4 Commonwealth Treasury. (2023). Mid-Year Economic and Fiscal Outlook 2023-24. hp://budget.gov.au/content/m yefo/download/myefo2023per centE2per cent80per cent9324 pdf

5 ibid ® Roy Morgan. (2024). Roy Morgan Business Confidence increased rapidly in February, up

8. 3pts to 101.5 — the first positive result above 100 for over a year. hp://roymorgan-cms-prod_s3.ap- southeast-2.amazonaws.com/wp-content/uploads/2024/03/15052621/9493-Roy-Morgan-Business- Confidence-February-2024 pdf

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Confidence survey in February 2024, general business confidence is still below the average tracked since December 2010, but the community services industry had the third highest confidence rating out of the ten industries analysed⁷. The HCSA sector is resilient to slowdowns in Australian economic activity due to the ‘non-discretionary’ nature of the services provided (generally necessities) and continued demand from population growth and an ageing population. The HCSA is also heavily reliant on funding from the public sector.

3.4 Inflation

High inflation has had widespread impacts across the economy over the past three years. High inflationary environment can increase cost pressures on providers delivering supports to NDIS participants, such as energy, logistics, increased interest rates and property costs. These providers may then be under pressure to raise prices for their services.

Moreover, headline inflation, as measured by the Consumer Price Index (CPI) (changes in the price of a fixed basket of goods and services that are representative of items bought by households), was 4.1% in the year to December 2023, above the Reserve Bank of Australia (RBA) target of 2% to 3%⁸. The RBA predicts inflation to fall to 3.3% by June 2024 and to be within the target range by December 2025, given easing supply constraints and a slowing of domestic activity from high interest rates⁹.

---

⁷ ibid

⁸ Australian Bureau of Statistics. (2024). Consumer Price Index, Australia December Quarter 2023: 6401.0 Consumer Price Index, Australia, TABLES 1 and 2. CPI: All Groups, Index Numbers and Percentage Changes and TABLE 7. CPI: Group, Sub-group and Expenditure Class, Weighted Average of Eight Capital Cities, Original. https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/latest-release

⁹ Reserve Bank of Australia. (2024). Statement on Monetary Policy – February 2024. https://www.rba.gov.au/publications/smp/2024/feb/; Commonwealth Treasury. (2023). Mid-Year Economic and Fiscal Outlook 2023–24. https://budget.gov.au/content/myefo/download/myefo2023percentE2percent80percent9324.pdf

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Inflation in the health industry (‘Health CPI’®) has run above the economy wide (all-industries) rate for most of the past decade, suggesting relatively strong cost pressures in the HCSA sector’’. Between December 2021 and June 2023, all industries CPI outpaced Health CPI given significant inflationary pressures across the economy, but Health CPI has returned to being higher than the all-industries CPI (see Figure 3) ’2.

Figure 3: All Industries CPI and Health Specific CP! Growth from 2016 to 2023

Per Cent
Jun-2016
Jun-2017
Jun-2018
Jun-2019
Jun-2020
Jun-2021
Jun-2022
Jun-2023

Source: ABS Consumer Price Index

10 The health industry includes the health care and social assistance sector.

11Australian Bureau of Statistics. (2024). Consumer Price Index, Australia December Quarter 2023: 6401.0 Consumer Price Index, Australia, TABLES 1 and 2. CPI: All Groups, Index Numbers and Percentage Changes and TABLE 7. CPI: Group, Sub-group and Expenditure Class, Weighted Average of Eight Capital Cities, Original. https://www.abs.gov.au/statistics/economy/price-indexes- and-inflation/consumer-price-index-australia/latest-release

ibid

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Labour market conditions

The labour market has been strong relative to historical averages. The seasonally adjusted unemployment rate in February 2024 was 3.7%, lower than the ten-year historical average of 5.3%13. About 380,000 additional people became employed over the year to February 2024 (2.7% year-on-year growth)14. The labour market is still forecast to remain strong relative to historical averages over the coming years as economic conditions relax. The unemployment rate is expected to rise to 4.25% in the June quarter 2024 and then is forecasted to peak at 4.5% in the June quarter 202515.

The HCSA sector is the largest employing sector in the economy and employment in the sector is growing quickly. The sector had 2.23 million workers in February 2024, equating to 15.6% of total Australian employment16. The sector has grown at a higher average rate over the past ten years compared to all other sectors (see

---

13 Australian Bureau of Statistics. (2024). Labour Force, Australia February 2024: Unemployment rate, Australia, August 1966 to February 2024, seasonally adjusted. hhttps://www.abs.gov.au/statistics/labour/employment-and-unemployment/labour-force-australia/latest-release

14 Australian Bureau of Statistics. (2024). Labour Force, Australia December 2023: 6202.0 Labour Force, Australia Table 1. Labour force status by Sex, Australia - Seasonally adjusted. hhttps://www.abs.gov.au/statistics/labour/employment-and-unemployment/labour-force-australia/latest-release

15 Commonwealth Treasury. (2023). Mid-Year Economic and Fiscal Outlook 2023–24. h<https://budget.gov.au/content/myefo/download/myefo2023per centE2per cent80per cent9324.pdf>

16 Australian Bureau of Statistics. (2024). Labour Force, Australia, Detailed February 2024, seasonally adjusted. hhttps://www.abs.gov.au/statistics/labour/employment-and-unemployment/labour-force-australia-detailed/latest-release#about-this-release

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Figure 4)17. In the year to February 2024, the number of new entrants was 112,940 persons (about 5% of the total HCSA workforce)18.

Figure 4: Employment Growth in All Industries and HCSA Sector from 2015 to 2024

Per Cent
Feb-2015
HSCA sector

Source: ABS Labour Force, Australia, Detailed

It is estimated that total DSW employment is currently about 300,000 persons. As published in the NDIS Review in December 2023, there were an estimated 280,000 DSWs as of 2021-22, representing about 14% of total HCSA employment.

There are about 170,000 therapists in Australia19. The most recent data from the Australian Health Practitioners Registration Agency (AHPRA), shows an increase in registered therapists from 2018 to 2022, with Psychologists, Physiotherapists, Occupational Therapists, and Podiatrists collectively growing by 27% (see Figure 5).

17 ibid

18 ibid

19 Australian Government. (2023). Employment Projections. https://labourmarketinsights.gov.au/our-research/employment-projections/