COMMUNITY MENTAL HEALTH AUSTRALIA SUBMISSSION

Joint Standing Committee on the Current Implementation and Forecasting for the NDIS

Enhancing Psychosocial Support outside the NDIS

Background:

Productivity Commission Report into Mental Health: In its recent Inquiry into Mental Health1 the Productivity Commission’s Recommendation 17 was for an enhanced Psychosocial Support Program for people living with significant psychosocial support issues as a consequence of mental illness and who (a) not currently in the NDIS and (b) are not currently receiving support from other programs (e.g. current State/Territory and PHN managed programs). The Productivity Commission estimates this is 154,000 people.

NDIS Sustainability Report: The recently released NDIA (National Disability Insurance Agency) Financial Report2 has provided forward projections based on existing tends on the likely increase in the number of future NDIS participants (including those with a psychosocial disability) and of anticipated annual packages and average annual expenditure per participant up to the year 2030.

There were 466,619 active participants in the Scheme as at 30 June 2021. This is estimated to increase to 670,400 participants by 30 June 2025 and 859,300 participants by 30 June 2030. The two drivers in the growth in the number of participants are:

the rate of new entrants into the Scheme, which has not slowed
the rate at which participants exit the scheme, which has been lower than expected.

These projections are significantly higher than the number of participants estimated by the Productivity Commission in 2017. In 2029-30 the number of participants is estimated to be 47% higher than estimated in the 2017 Productivity Commission Study report3.

For people with a psychosocial disability the Productivity Commissions projection was that the numbers would plateau out at 64,000 (at which point it was anticipated that new entrants would roughly equal those exiting the scheme). While slow to start (for a variety of reasons)4 psychosocial disability has over the past few years increased significantly. As of June 30, 2021 (last figures available) there are approximately 50,475 participants with primary psychosocial disability in the scheme. The revised projections are that there will be 65,835 participants with a primary psychosocial disability in the Scheme by 30 June 2024, and 88,180 by 30 June 2030.

1 Final PC Report – Inquiry Into Mental Health, 2002 2 NDIA Annual Sustainability Report 2021 3 Even these projections do not take into account the growing pressure to maintain NDIS participation for 64+ 4 See: Commonwealth Mental Health Programs Monitoring Project Tracking transitions of people from PIR, PHaMs and D2DL into the NDIS (Community Mental Health Australia, 2019)

That is, by 2030 the greater than anticipated numbers (as forecast in the original Productivity Commission projections and current Commonwealth budget forward estimates) of participants with primary psychosocial disability in the NDIS will be 24,180.

For all NDIS participants combining the information on the projected number and projected average payment per participant, results in total participant costs of $29.2 billion in 2021- 22, $41.4 billion in 2024-25, and $59.3 billion in 2029-30 (on an accrual basis).

These projected participant costs are higher than the most recent 2021-22 Portfolio Budget Statements and the 2021 Intergenerational Report projection which is based on the 2021-22 PBS in the short-term.

Participant costs - accrual basis ($m)	2021-22	2022-23	2023-24	2024-25	2029-30
2017 Productivity Commission report	25,158	26,740	28,351	30,555	40,915
less operating costs	-1,450	-1,503	-1,511	-2,054	-2,784
2017 Productivity Commission participant costs	23,708	25,238	26,839	28,500	38,130
Baseline projected participant costs (accrual basis)	29,223	33,886	37,973	41,373	59,284
Difference	5,515	8,649	11,133	12,872	21,154

The current average NDIS psychosocial disability support package is $77,000 and the average anticipated length of participation in the scheme is 42 years (i.e. anticipated per participant lifetime package of $3,234,000 + CPI etc)5. For purposes of calculation on a 10- year period this would be $770,000. If this is multiplied by the above projection of an additional 24,180 participants (above current budget forecasts, this 10 year figure is $18,618,600,000 (or approx. an additional $1.86B per annum) in current dollars.

Proposal

A well-designed6 and suitably resourced national Psychosocial Program would serve two main purposes:

It would meet the significant unmet needs of that group of highly disadvantaged people described in detail in the Productivity Commission Report, with all their associated benefits to family and carers, local communities and society at large.
It would provide a viable and suitable alternative to the NDIS7 for a number of people in a scheme that was constructed from the ground to seek recovery outcomes and which is sufficiently resourced to make these a reality8.

5 The NDIS is by definition a program for people living with permanent lifelong disability. This is its strength, but also as has been discussed in several forums, there is particularly for people living with mental illness an inbuilt perverse incentive in that in order guarantee ongoing support (and not have that support be reduced of be exited from the scheme) the implicit “looping effect” (see Looping effects and the expanding concept of mental disorder- Haslam, 2016) create a barrier to significant recovery as could and should occur for many following a period of well-resourced psychosocial rehabilitation. 6 This would require the application of best practice in co-design involving all stakeholders as well as being a scheme that must be constructed from the ground up to be locally flexible and to enable full local ownership. 7 It might be thought that an alternative way to slow the upward tend of NDIS participation might be to put in place more stringent initial eligibility assessment progresses. There are several reasons, not the least of which are significant human rights breeches, why this tactic would be very unlikely to occur and if so would be extremely unpopular and politically very costly. 8 The learnings now available from the development of the NDIS Psychosocial Recovery Framework, the record of the previous Commonwealth Programs such as Partners in Recovery and the Personal Helpers and Mentors programs and the evaluation of the current Psychosocial Support Program being run through Primary Health

For the purpose of illustration and comparison only three further proposals are explored here that relate to the possible costs, oversight and goals of the proposed program.

COST: A financial model of a Psychosocial Program of sufficient scale is set out in Appendix

This model makes the following assumptions:
The number of entrants to the new PSP scheme assumes a graduated entry as the scheme proceeds (Row 3). The total 10-year number being 150,000 participants.
While there may be no strict categories of division in the program between high, medium and low support clients, these levels are provided in order to account for the large range in varying levels of support that different people may need
While some people may shift from a lower to a higher level of support each year9 it is assumed that the majority will gradually shift from higher to lower and the number provided for shifting already takes into account the movement both ways.
An hourly cost scenario is explored here but it assumes that this program will be primarily be a Grant Based program (based on numbers to be assisted x level of need) not a price per hour transactional program

NOTE this in the attached model the total cost over a 10-year period providing supports to 150,000 people is $8,194,418,768 (average $819M per annum). Compare this to the above cited total 10-year cost of an additional 24,180 NDIS participants (above existing forecasts) of $18,618,600,000. This would (A) be a 10-year saving of $10,424,181,232 and (B) assist an additional 125,820 people.

OVERSIGHT: It is proposed the new psychosocial support program is managed by the Department of Social Services10. This provides two key advantages:

DSS also manages the NDIS allowing for closer inter-program coordination
The focus of DSS is more on the “Social Determinants”

OUCOMES FOCUS: The new program should be designed with the proposed outcomes as the key design principle. It is proposed a central outcome for this program be increased participation in the meaningful activity with a major focus upon increased participation in the labour market.

Very Importantly this does not mean employment outcomes being the goal of this program (though of course this may occur), employment outcomes are the goals of alternative programs like the Disability Employment Services. Increased participation means just that individual capacity has been developed such that if the person then wished to engage in employment they would be more ready and able to do so.

Networks and the learning from the review of the Disability Employment Program provide excellent information upon which a more outcome effective program could be built. 9 While this model does allow for the existing of people from this program it is presumed that most people will eventually shift to a lower level of support that allows the program to maintain at least some degree of permanent contact with people with have an episodic disability. 10 To stress again it will be essential that any such program is built from the ground up to be locally adaptable and to ensure local ownership with lived experience central to the programs design, management & delivery.

Having this focus would have three key advantages:

Many other recovery outcomes in terms of individual capacity building are given greater meaning in how they align with that goal
The program itself sets the expectation of this aspiration being taken seriously
Increasing the participation rate of people with disabilities in the labout market has been and is a key goal from the human rights perspective and in terms of Australia’s economic wellbeing of the c

New entrants

starting at

High Support

Medium Support

Low Support] Exit low (i.e. scherne) during year

N.B Change cells in Purple

High Year

2025 2026 CMHA Community Mental Health Australia Proportions Medium Low Exit high for medium during year Exit whole scheme From high during year Number at end of year Exit medium for low during year Exit scheme from medium during year Number at end of year Number at end of year

150,000

Total Exit Average h Average hours of support per week eure 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 support per year High 520 4,732,000 6,151,600 7,760,480 7,060,144 5,667,043 4,066,113 3,585,834 3,441,750 3,398,525 3,385,558 Medium 104 416,000 1,362,400 928,720 694.616 520,385 364,115 317,235 303,170 298,951 297,685 Low 26) 52.000 93,600 139,880 163,904 170,123 162,099 165,679 150.543 146.434 143,148 Total [CPI per year = | 3%| Cost per $ 130 | $ 134 | $ 138 | $ 142 | $ 146 | $ bil $ 5 | $ 160 | $ 165 | $ 10

33,800 | $ 29,188 | $ 32,672 | ¢ 33,211 | $ 32,854 | ¢ 31797 | ¢ 32,067 | ¢ 32,975 | ¢ 34,104 | ¢ 35,303 $ 54,629.46 Front line worker Face to Face 3,380.00

Front Line worker Admin, Prep, Arranging contacts, Supervsion, Training, Travel etc.. All associated HA costs (Leave, Training etc] Management & Admin All other Infrastructure Total Hourly Cost Total Cost

2024 2025 2026 2027 2028 2029 2030 2031 2032 2033

150,000 | e1a441e76al