NDIA Accountability Project

Shortage of SDA data and its impact on New Build development

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ALLIANCE ACN | 629 769615

Level 1, 48-52 Cronulla St Cronulla NSW 2230

Friday 29 October 2021

Joint Standing Committee on the National Disability Insurance Scheme PO Box 6100

Parliament House

Canberra ACT 2600

to whorn it may concern,

| write on behalf of the Specialist Disability Accommodation Alliance (the Alliance), the national peak body for the good practice New Build Specialist Disability Accommodation (SDA) market. The Alliance wishes to thank the Joint Standing Committee (JSC) for the opportunity to make an interim submission in response to the inquiry into current scheme implementation and forecasting for the National Disability Insurance Scheme (NDIS).

In writing this letter, the Alliance hopes to bring the issues canvassed below to the attention of the JSC, with a view to providing a more fulsome submission for the 28 February 2022 deadline. If the JSC would like further information on any of the matters raised in this letter between now and then, we welcome opportunities to discuss.

Issues

1. Lack of data on SDA demand

Relevant Inquiry Terms of Reference relating to this issue:

e:: Financial and actuarial modelling and forecasting of the scheme, including: i.: the role of insurance-based principles in scheme modelling, and ii.: assumptions, measures, and methodologies used to forecast and make projections about the scheme, participants, and long-term financial modelling;

f.: The measures intended to ensure the financial sustainability of the NDIS (e.g. governance, oversight and administrative measures), including: iii.: the way data, modelling, and forecasting is presented in public documents about the NDIS, (e.g. NDIS Quarterly Reports and Reports by the Scheme Actuary), and iv.: measures to ensure transparency of data and information about the NDIS.

New Build SDA is not being developed and tenanted at the rates originally envisioned by both the Productivity Commission and the NDIA. This is partly due to a shortage of SDA demand data, meaning investors and developers cannot respond effectively to the SDA needs of NDIS participants, which has resulted in market hesitancy\

In 2011, the Productivity Commission estimated that once the Scheme reached full roll out, 6 per cent of NDIS participants would be eligible to receive funding to live in SDA. This equated to around 28,000 participants and was estimated to cost the Scheme $700 million. The NDIS has become available across all Australian States and Territories and completed rolling out on 1 July 2020 (except for Western Australia). However, the most recent NDIS SDA Quarterly Report indicated that as at 30 June

info@sdaalliance.org.au

www.sdaalliance.org.au

Phone | 1300 409 932 ACN | 629 769 615 Level 1, 48-52 Cronulla St Cronulla NSW 2230

In 2021, only 16,033 NDIS participants were living in SDA (just over half of projected eligible participants).1

In 2016, the NDIA assumed the number of New Builds would increase ‘rapidly in the early years of the scheme to meet transitional demand from large residential centres and aged care facilities, in addition to new housing that will be constructed to cater for unmet demand and people moving out of existing housing stock’.2 The modelling used by the NDIA predicted that the rate of construction of New Build SDA dwellings would increase to just over 900 homes a year by FY 2018/19. On this assumption, the NDIA expected construction of over 2,700 properties by 2021. However, the most recent NDIS SDA Quarterly Report indicated that as at 30 June 2021, there were only 1,185 New Build SDA dwellings to date.3

This clearly indicates that New Build SDA is being developed and tenanted at a much slower rate than predicted by the Productivity Commission and the NDIA. This is in a large part due to a shortage of data on SDA demand.

The NDIA has taken a number of important steps to improve the availability of SDA data required by industry. This has assisted industry to some extent, however, the following further data points are still required:

  • NDIS participants in receipt of SIL, but not in receipt of SDA funding - While the 2020-21 Annual Financial Sustainability Report Summary – Interim Update stated that around 35 per cent of NDIS participants in receipt of Supported Independent Living funding do not yet have SDA in their NDIS Plans,4 no information or data was provided to the SDA industry on the location or SDA needs of those participants.
  • NDIS participants living in Legacy SDA stock, Existing Basic Stock or Existing SDA Stock that does not meet their disability related needs – With all Australian States and Territories now part of the NDIS, the NDIA has stated that the latest SDA Quarterly Report includes the vast majority of Legacy SDA stock and Existing Basic Stock.5 The next step is to provide the SDA industry with data and information on the NDIS participants residing in these settings and to ensure they understand their home and living options.
  • NDIS participants living in Residential Aged Care (RAC) aged under 65 years who have an NDIS goal to leave RAC and/or are likely eligible for SDA funding - Government is in danger of not meeting the YPIRAC Targets due to a mismatch between the currently available and pipeline SDA Stock versus the housing needs and approved funding of YPIRAC. In order to ensure the market is able to respond in time with the right accommodation in the right locations, the market must be provided with data on the SDA Design Category and preferred location of YPIRAC (in a way that ensures individual participant privacy).

1 National Disability Insurance Agency (NDIA) 2021, SDA 2020-21 Q4 Report, page 11, hhttps://data.ndis.gov.au/media/2827/download?attachment. 2 National Disability Insurance Agency (NDIA) 2016, SDA Position Paper on Draft Pricing and Payments, page 18, https://www.ndis.gov.au/media/1037/download. 3 National Disability Insurance Agency (NDIA) 2021, SDA 2020-21 Q4 Report, page 5, hhttps://data.ndis.gov.au/media/2827/download?attachment. 4 National Disability Insurance Agency (NDIA) 2021, ‘Annual Financial Sustainability Report Summary – Interim update’, page 64 hhtps://www.ndis.gov.au/media/3388/download?attachment. 5 National Disability Insurance Agency (NDIA) 2021, SDA 2020-21 Q4 Report, page 6, hhttps://data.ndis.gov.au/media/2827/download?attachment.

ALLIANCE ACN | 629 769615

Level 1, 48-52 Cronulla St Cronulla NSW 2230

Through providing the data needed by the SDA industry and improving NDIA forecasting of SDA need into the future, the NDIA can better support industry to align with the insurance-based models that will provide eligible participants with timely access to appropriate SDA which will enable the achievement of positive participant outcomes and value for money over time.

Recommendation 1: Work with industry and participant representatives to co-design a ‘Demand Activation Program’ in order to understand, develop and publicly share data on the future housing needs of those participants already residing in SDA, of those in receipt of SIL funding only and those living in Residential Aged Care.

  1. Poor quality NDIA Home and Living decision making

Relevant Inquiry Terms of Reference relating to this issue:

c. The reasons for variations in plan funding between NDIS participants with similar needs, including: ii. whether inconsistent decision-making by the NDIA is leading to inequitable variances in plan funding, and il. measures that could address any inequitable variation in plan funding.

As stated above, New Build SDA is not being developed and tenanted at the rates originally envisioned by both the Productivity Commission and the NDIA. This is partly due to poor-quality NDIA Home and Living decision making regarding participant funding/SDA eligibility since September 2020, which has resulted in significant market hesitancy.

Since September 2020, around Australia SDA Providers, Support Coordinators, Allied Health Professionals (AHPs), Participants and their families have consistently reported poor quality SDA eligibility and broader home and living funding decisions. The commencement of these reports appears to align with movement of accountability for SDA decisions to the Operations arm of the NDIA (Participant Experience Division). Poor quality decisions are defined by industry as decisions which have poor alignment between funded outcomes and evidence provided by AHPs and others. The most common poor quality decision types reported are:

e participants funded for a lower SDA Design Category than recommended and evidenced by AHPs reports (e.g. Fully Accessible funding instead of High Physical Support funding, Improved Liveability funding instead of Robust funding);

e participants determined ineligible for SDA despite strong AHPs evidence aligning with SDA eligibility criteria within the SDA Rules (e.g. participants being found ineligible for SDA altogether instead of being found eligible for Improved Liveability SDA);

e participants for whom it is reasonable and necessary to live in a sole occupancy dwelling that are being approved only for funding that will enable them to live in a 3 SDA eligible participant share house.

Almost all of these decisions are in stark contrast to decisions made for participants in strikingly similar circumstances and with similar needs prior to September 2020. This inconsistent decision-making by the NDIA over different time periods has led to strongly inequitable variations in plan funding across time periods for participants with very similar needs and circumstances.

ALLIANCE ACN | 629 769615

Level 1, 48-52 Cronulla St Cronulla NSW 2230

Recommendation 2: In order to address this inequity, there are a number of steps we have recommended the NDIA should take initially, including:

e Tracking the full journey, from lodgment of initial participant SDA eligibility evidence, right through to written notification of SDA outcome (not just time taken for Panel decision);

e Automatically providing standardised receipts and notifications, including standardised written communication of SDA eligibility outcome (including eligibility, funding amount, Design Category, Build Type, Location, reasons for decision);

e Working with the SDA Reference Group to improve the eligibility testing process;

e Providing a flow chart (SDA Eligibility Testing Roadmap) showing process, demonstrating the pathway to SDA from different living situations (e.g. the pathway to SDA from an existing State/Territory run group home, residential aged care, hospital settings etc).

e Providing publicly available greater guidance on SDA eligibility (e.g. SDA application form or improved guidelines, Easy Read explanation of SDA eligibility for participants, including case studies of some participants who have been found to be SDA eligible).

e Via SDA Reference Group, providing information to market on SDA eligibility criteria interpretation and application changes since Sept 2020.

  1. YPIRAC targets potentially endangered

Relevant Inquiry Terms of Reference relating to this issue:

a. The impact of boundaries of NDIS and non-NDIS service provision on the demand for NDIS funding, including: i. the availability of support outside the NDIS for people with disability (e.g. community-based or “Tier 2’ supports), and ii. the future of the Information, Linkages and Capacity Building grants program;

b. The interfaces of NDIS service provision with other non-NDIS services provided by the States, Territories and the Commonwealth, particularly aged care, health, education and justice services;

f. The measures intended to ensure the financial sustainability of the NDIS (e.g. governance, oversight and administrative measures), including:

iii. the way data, modelling, and forecasting is presented in public documents about the NDIS, (e.g. NDIS Quarterly Reports and Reports by the Scheme Actuary), and iv. | measures to ensure transparency of data and information about the NDIS.

On 25 November 2019 the Australian Government announced its commitment to reducing the number of young people (under 65 years) living in residential aged care. Responding to the Royal Commission into Aged Care Quality and Safety interim report, the Government committed to three targets:

  1. no people under the age of 65 entering residential aged care by 2022;

  2. no people under the age of 45 living in residential aged care by 2022; and

  3. no people under the age of 65 living in residential aged care by 2025.

In March 2021, the Australian Institute of Health and Welfare (AIHW) released a factsheet headlining

ALLIANCE ACN | 629 769615

Level 1, 48-52 Cronulla St Cronulla NSW 2230

a 20 per cent decrease in the number of people under 65 years living in residential aged care, including statements that ‘the number of people living in permanent residential aged care in Australia has been steadily decreasing’. However, it has become apparent that this impressive statistic and optimistic claim is largely due to people dying or aging out of the tracked cohort.

Of the 968 people who exited residential aged care between 1 April 2020 and 31 March 2021, 68 per cent (655 people) died.

Further, the small print of the statistical data indicates that people who ‘age-out of the cohort by turning 65’ are no longer included in the data once they reach 65 years. Given 58 per cent (2,380 people) of the tracked cohort are currently aged between 60–64, it is relevant to point out that the ongoing reduction in younger people living in residential aged care is, to a certain extent, being achieved not by rehoming people but by large numbers dropping off the tracked cohort list due to turning 65.

As can be seen, the major reasons the Government currently appears on track to meet the 2025 YPIRAC target is due to people dying or aging out of the statistics.

There are a number of barriers that need to be addressed in order to improve the progress towards the YPIRAC Targets, including:

  • The SDA industry and other mainstream housing systems currently do not have access to the data required to enable housing to be identified and/or developed specifically to meet the needs of individuals in this cohort;

  • The NDIA does not have an effective interim housing pathway to enable YPIRAC and those in hospital at risk of RAC admission with interim/transitional accommodation while a permanent housing solution is being developed;

  • State and Territory Governments are not providing YPIRAC who are either not found eligible for the NDIS, or found eligible for the NDIS but ineligible for SDA, with enough support to exit RAC and access more appropriate housing solutions;

  • NDIS participants living in RAC who are eligible for SDA are not receiving information and support in the required manner to build confidence to leave RAC and find suitable SDA;

  • NDIS participants living in RAC who are not proven eligible for SDA are not receiving enough NDIS support to effectively explore and identify alternate housing options;

  • Both NDIS participants and non–NDIS participants who have been hospitalised for long periods of time are not being given enough information and support to exit into appropriate housing settings:

  • Not enough support is being allocated to Aged Care facilities to approach YPIRAC and explore the alternative options that may be available.

Recommendation 3: In order to more effectively progress towards the YPIRAC Targets outlined above, we recommend:

e Publicly releasing data currently held by the NDIA on NDIS Participants currently residing in RAC with a goal to leave RAC down to SA4/SA3 level (with suppression of very low numbers, as per current standard YPIRAC SRG reporting protocol to protect participant privacy);

e Encouraging State and Territory Governments to support YPIRAC who are ineligible for

SPECIALIST

info@sdaalliance.org.au

DISABILITY

www.sdaalliance.org.au ACCOMMODATION Phone | 1300 409 932 ALLIANCE ACN | 629 769615

Level 1, 48-52 Cronulla St Cronulla NSW 2230

the NDIS, or eligible for the NDIS and ineligible for SDA, to access appropriate housing solutions;

e Encouraging the NDIA to more proactively identify NDIS participants living in RAC and provide support to pre-test SDA eligibility. Where eligible, the NDIA should support these participants pursue SDA. Where proven ineligible, the NDIA should support these participants identify home and living goals, with the aim of moving these participants into more appropriate housing solutions;

e Work with the SDA industry to further develop an effective interim housing pathway to enable YPIRAC and those in hospital at risk of RAC admission with interim/transitional accommodation while a permanent housing solution is being developed;

e Work with the YPIRAC SRG to stem the flow of younger people in hospital to RAC by tightening the ACAT guidelines and providing greater support to these young people while in hospital;

e Supporting Aged Care facilities to assist NDIS participants make contact with the NDIA to explore alternative housing solutions.

4. Sustainability claims

Relevant Inquiry Terms of Reference relating to this issue:

c. The reasons for variations in plan funding between NDIS participants with similar needs, including: i. whether inconsistent decision-making by the NDIA is leading to inequitable variations in plan funding, and ii. measures that could address any inequitable variation in plan funding.

e. Financial and actuarial modelling and forecasting of the scheme, including: iii. the role of insurance-based principles in scheme modelling, and iv. assumptions, measures, and methodologies used to forecast and make projections about the scheme, participants, and long-term financial modelling;

f. The measures intended to ensure the financial sustainability of the NDIS (e.g. governance, oversight and administrative measures), including: iii. the way data, modelling, and forecasting is presented in public documents about the NDIS, (e.g. NDIS Quarterly Reports and Reports by the Scheme Actuary), and iv. measures to ensure transparency of data and information about the NDIS;

g. The ongoing measures to reform the scheme including: ii. planning policy for personalised budgets and plan flexibility.

Sustainability of the NDIS became a key issue following Scheme costs exceeding the estimated PBS projections in the 2019-20. The ‘Annual Financial Sustainability Report Summary — Interim update’ indicated that Scheme costs in 2020-21 will also exceed the 2020-21 PBS estimates.

Growing concern regarding spiralling costs has impacted NDIA decision making, described in detail

National Disability Insurance Agency (NDIA) 2021, ‘Annual Financial Sustainability Report Summary - Interim update’, page 18 <hitps://www.ndis.gov.au/media/3388/download ?attachment>.

ALLIANCE ACN | 629 769615

Level 1, 48-52 Cronulla St Cronulla NSW 2230

above, and has caused the NDIA to point to the ‘sustainability of the Scheme’ as the basis for rejecting reasonable and necessary requests for sole occupancy SDA. While we acknowledge one of the reasons causing disparity in plan funding is due to socio-economic reasons, we argue that poor-quality Home and Living decision-making post September 2020 has also contributed. Some decision makers in the NDIA continue to make claims that sole occupancy SDA is too expensive for the Scheme and will blow out whole of package costs, rejecting most, if not all, applications made for sole occupancy SDA. This is in stark contrast to NDIA Home and Living decisions made pre-September 2020 that recognised the reasonable and necessary circumstances where sole occupancy SDA was appropriate for some NDIS participants. The sustainability claims being relied on by the NDIA to justify the rejection of sole occupancy requests have not been accompanied with data to evidence this claim. The limited data the NDIA has provided, along with anecdotal evidence, suggests that there are some limited circumstances where sole occupancy represents value for money when modelled correctly.

The SDA Alliance is currently working with the NDIA to explore and identify the range of circumstances where it is appropriate for an NDIS participant to live in a sole occupancy dwelling with shared supports. Such an arrangement can reduce the need for person-to-person supports due to New Build SDA inclusions, features and locations providing for increased independent self-care, and through some sharing of care can improve the efficiency of delivering person-to-person supports.

While we understand that living alone is not suitable for, or even the preference of, every NDIS participant, the NDIA must recognise that there are circumstances when sole occupancy with some shared care can be equally, or even more, sustainable than shared living arrangements and not point to sustainability claims as a reason for rejecting sole occupancy SDA applications.

The SDA industry strongly rebuts recent NDIA claims that because SDA is currently underspent, there is a danger that a future rise in SDA eligible participants will impact the sustainability of the NDIS. Cost effective models that incorporate both funding for best practice SDA and innovative care arrangements can deliver efficient and effective supports for NDIS participants. In contrast to the NDIA’s claims, this provides an opportunity to deliver up to 28,000 participants with extreme functional impairment and/or very high support needs with more cost-efficient housing and care. Many of these participants are amongst the highest cost to the Scheme currently, and so delivery of good practice SDA and better care solutions has the potential to greatly support long term Scheme sustainability. Further, delivering a co-designed policy for personalised budgets and enabling plan flexibility could greatly assist NDIS participants to implement these innovative arrangements.

Recommendation 4: In order to continue to provide NDIS participants with a greater range of innovate service options that suit needs and circumstances, while maintaining Scheme sustainability, we recommend: e For the NDIA to work collaboratively with the SDA RG to progress towards operationalisation of the cost modelling and findings to date. e Forthe NDIAto work collaboratively with the SDA RG to progress toward further value for money cost modelling exercises in the following scenarios: *« Using separate SIL and concierge providers in sole occupancy clustered SDA (Model 1B); c Those with a need for 1:1 24/7 as well as 2 x staff for brief periods (Model 1C): e When informal supports reach a quantum to enable VFM sole occupancy (Model 2);

Appendix G

e¢ co-residents under ILO or loved ones (Model 3A and Model 3B);

« When SDA is better long-term VFM than home modifications and/or just Assistive Technology (Model 4);

« When the inclusion of Assistive Technology in a particular SDA model decreases care costs sufficiently to achieve VFM in higher cost SDA (Model 5).

-e For the NDIA to work collaboratively with the SDA RG to co-design NDIA and sector approach to encouraging SDA innovation, including what issues are the priority to solve for via innovation (i.e. SIL cost reduction) and what cohorts are to be addressed (i.e. ATSI, Robust Plus).

-e For the NDIA to work collaboratively with key stakeholders, including SDA industry representatives, to co-design the new approach to functional assessments, plan flexibility and personalised budgets as they apply to the cohort of participants with extreme functional impairment and/or very high support needs.

The SDA Alliance would welcome further engagement, collaboration and discussion about the issues and recommendations identified above. As such, we look forward to hearing from you.

Yours sincerely,

Melanie Southwell Chief Executive Officer