House with No Steps
Submission on The National Disability Insurance
Scheme Bill 2012
25 January 2013
- Introductory comments House with No Steps (HWNS) welcomes this opportunity to comment on the National Disability Insurance Scheme Bill 2012.
HWNS strongly supports the introduction of a National Disability Insurance Scheme (NDIS) as a key vehicle for Australia’s implementation of the United Nations Convention on the Rights of Persons with Disabilities. In the context of this submission, relevant statements from the Convention include:
Preamble
(e) Recognising that disability is an evolving concept and that disability results from the interaction between persons with impairments and attitudinal and environmental barriers that hinder their full and effective participation in society on an equal basis with others…
(j) Recognising the need to promote and protect the human rights of all persons with disabilities, including those who require more intensive support.
Article 27 – Work and Employment
State Parties recognise the right of people with disabilities to work on an equal basis with others; this includes the right to the opportunity to gain a living by work freely chosen or accepted in a labour market and work environment that is open, inclusive and accessible to persons with disabilities …
(e) Promote employment opportunities and career advancement for persons with disabilities in the labour market as well as assistance in finding, obtaining, maintaining and returning to employment.
HWNS acknowledges and endorses the submission by National Disability Services on behalf of its member organisations, which include HWNS.
HWNS notes that the nature of the feedback process makes it difficult to comment comprehensively on the design of the proposed National Disability Insurance Scheme (NDIS). Feedback on the Bill is being sought by the Senate Inquiry ahead of the availability of the draft NDIS Rules and the NDIS Launch Transition Agency’s operating guidelines. Further, there is a separate, parallel feedback process under the auspices of the Council of Australian Governments regarding the regulatory impact of the NDIS.
- Market model HWNS notes its broad support of the “Option 3” market-based option in the Regulatory Impact Statement. Option 3 appears to provide a sound base for establishing an appropriate balance between maximising consumer choice and managing risk in more complex and higher support settings.
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Plan management by service providers HWNS welcomes the apparent provision in the Bill under Section 70 for registered service providers to also be registered plan managers. HWNS submits that this is a natural and necessary consequence of respecting the human rights of NDIS participants. To restrict a participant’s right to choose a service provider that the participant trusts and has a relationship with, on purely ideological grounds, would artificially limit consumer choice, increase costs and reduce participant outcomes.
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Minimal price regulation HWNS submits that there should not be price regulation in the “market” for disability supports. Mainstream, specialist and other providers should be able to charge more or less than the “benchmark rate” for an hour of support set by the National Disability Insurance Agency (NDIA), with differentiated pricing for different types and levels of support. Participants should be free to choose the mix, quantity and quality of supports that best meet their goals without unnecessary regulation. HWNS notes that some price control or review processes may be required in regional and remote locations where a participant’s choice of providers is limited. However, in most locations restricting consumer choice by fixing or otherwise regulating pricing would result in a lowest common denominator commoditisation of service provision, with a focus on maximising inputs as opposed to optimising outcomes, and would stifle innovation.
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Employment under the NDIS The remaining matters set out in this submission reflect additional and specific concerns relating to employment opportunities for people with a disability, informed by the experience and expertise of HWNS in providing employment supports for people who have significant intellectual disability, cognitive impairment and/or mental health issues.
5.1. General employment-related comments
In addition to identifying the fragmentation of the existing system, the Productivity Commission Inquiry Report on Disability Care and Support (No 54, 31 July 2011) noted the poor ranking of Australia against other OECD countries (24/28) in employment outcomes for people with disabilities. The Report notes the potential economic benefits to Australia of improving performance –
“Were Australia to achieve employment ratios for people with disabilities equivalent to the average OECD benchmark – a highly achievable target given the proposed reforms – employment of people with mild to profound disabilities would rise by 100,000 by 2050” … with resultant increases in GDP.
The Commission notes that it is envisaged that the NDIS would provide “supported employment services and specialist transition to work programs that prepare people for jobs” and “a multi-tiered system based on employment potential and participation” requiring a revamp of existing employment services and Disability Support Pension arrangements.
Given the fundamental importance of work and employment identified by the Productivity Commission and the potential benefits for people with a disability and the broader community of improved employment outcomes, it is important that the design and
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implementation of the NDIS provides the opportunity for innovation and flexibility in the provision of supports.
HWNS submits that many people with significant intellectual or cognitive impairment or mental health issues continue to face major attitudinal and environmental barriers in accessing sustainable employment opportunities, have been poorly serviced and their opportunities restricted by the existing opportunities provided through Disability Employment Service providers (DESs) and Australian Disability Enterprises (ADEs) and that it is therefore vital that the NDIS address the current shortcomings and improve and enhance this position.
HWNS submits that there is a need for greater clarity around the interface between the employment supports provided under the NDIS and those currently (and for the foreseeable future given the recent DEEWR Employment Support Services tender process) provided by Disability Employment Services. Accountability for organisations providing employment supports should reflect the improved outcomes identified in the Productivity Commission Report including higher expectations about working, skill development and behaviour change and support for employers.
In the current system there are impediments to people who wish to transition between supported and open employment and related programs, largely because of the division of responsibility across government jurisdictions and departments and the relationship with the DSP and other entitlements.
HWNS submits that the NDIS should support the emergence of a continuum of employment options, including blended transition models where a person can access a mix of employment and support options (including, for example, supports relating to work skills development and retirement preparation). For example, a person currently working in supported employment five days per week should instead, based on their personal plan, be able to reduce the number of days worked in supported employment whilst undertaking specific job-related skills development and being supported (e.g. by a Disability Employment Service) to seek or commence in an open employment position.
The need for change is further articulated in the Australian Government’s “Inclusive Employment 2012-2022: a vision for sustainable supported employment”. This report sets out the shortcomings of the current system and looks to the NDIS to create significant changes including:
a) A new definition of support employment: “Ongoing support funded by Government, that people with a disability need in order to access and retain employment. The support is related to the nature of their disability” and
b) Removal of barriers between “open” and “supported” employment.
HWNS submits that the NDIS Bill must sufficiently articulate the way that it will positively respond to supporting people with a disability in an employment context.
5.2. Consideration of the NDIS Bill regarding employment
Given this context, HWNS submits that the NDIS Bill should be considered in terms of its capacity to deliver the employment outcomes identified above. The critical question is whether the terms of the Bill in their current form are adequate to achieve these outcomes.
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The most relevant provisions:
Clause 3 – Objects including “support the independence and social and economic participation of people with a disability”
Clause 4 – Principles including 11(b) “support the capacity of people with a disability to undertake activities that enable them to participate in the community and in employment”
Clause 33 – Requires that the “participant’s statement of goals and aspirations” must specify “the environmental and personal context of the participant’s living, including the participant’s …social and economic participation”
Clause 34 – Provides for “reasonable and necessary supports” subject to (f) the support is most appropriately funded through the National Disability Insurance Scheme, and is not more appropriately funded or provided through other general systems of service delivery or support services.” It is conceivable that “other support services” could refer to Disability Employment Services.
Clause 69 – Registration of providers of supports, and
Clause 73 – Rules for registered providers of supports
There is potential for employment–related supports (such as those envisaged by the “Vision” above) to be either overlooked or caught up in more general provisions that create impediments to the provision of a broad cross-section of supports, or perpetuate the current divide between “open” and “supported” employment.
The Productivity Commission also noted the need for a complete overhaul of the DSP system which has particular impact on the employment context for people with disability, for example by withdrawing benefits at a rate that discourages employees with a disability from seeking higher-paid roles or longer working hours.
HWNS submits that, just as there is a separate division considering the needs of children, the Bill, or at least the Rules supporting the Bill, should provide specific guidance and consideration of employment opportunities for people with a disability given the historic context, fundamental change, and potential expansion of opportunities for people with a disability, as well as the fundamental changes to community and business attitudes to the employment of people with disability, particularly those with more significant support needs, in order to realise the full potential of the scheme in creating real quality of life and economic participation outcomes for people with disability.
5.3. Issues relating to supported employment
HWNS submits that the current system of supported employment is failing an increasing proportion of people with intellectual and psychiatric disability and that those failures should be addressed in the NDIS launch sites.
HWNS submits that there is an urgent need to review and refine the funding model for ADEs as part of the transfer of funding responsibility from FaHCSIA to the NDIS Launch Transition Agency. The current funding model is seriously flawed in terms of both equity and adequacy. It is not an appropriate model on which to base individual employment support funding under the NDIS.
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Inadequate funding HWNS notes that the number of funded places in supported employment is capped and that the indexation of funding for employment support has been substantially lower than the rate of cost inflation and less than CPI, resulting in limited opportunities employers in supported employment to innovate, expand and maintain a capacity to compete and be sustainable whilst providing the high levels of training, on the job support and behaviour intervention and support that will enable people with significant disabilities achieve their employment potential. As a result, current case-based funding levels are insufficient to support investment in innovation and productivity enhancement as market competition increases. This is creating viability pressures for many ADEs at a time of economic uncertainty, rising input costs and intense competition.
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Inequitable funding HWNS raises this issue of funding inequity across jurisdictions specifically, as it is an issue that a member-based peak body such as National Disability Services has difficulty raising due to the diverse interests of its members.
The current distribution of funding across ADEs bears more relationship to historical arrangements and geographic location than it does to employee support needs. It creates competitive inequality between employers. HWNS submits that this anomaly must be addressed as ADE funding is transitioned to the NDIS Launch Transition Agency.
ADE funding is paid based on an organisation’s assessment of the support needs of each supported employee, using a prescribed but subjective assessment process. Employer judgments are rarely if ever subject to review. The assessment yields a “DMI” level of 1 (lowest support) to 4 (highest support). An “Employment Maintenance Fee” is then paid, based on the DMI level. The fees currently range from $4,056 per year per DMI Level 1 employee to $13,740 for a DMI Level 4 employee.
HWNS submits that this funding model is fundamentally flawed. It focuses on impairment – and on a third party potentially overstating impairment to maximise funding – rather than on the positive supports that a person requires to achieve their desired employment outcomes. It is a “medical model” approach that has no place in the new NDIS.
The DMI funding model creates strong incentives for organisations to “game” the funding system by maximising their assessment of support needs, leading to higher funding levels. This incentive is particularly strong given low average funding levels, their decline in real terms over the past decade and the increase in average employee support needs as a result of policy settings that limit exit options for ageing supported employees and reduce intake options for younger employees with lesser support needs.
The significant variance in average DMI levels across different states and territories suggests that either this type of “gaming” behaviour has occurred or that historical assessment processes differed in practice across jurisdictions.
Whatever the cause, the outcome is that a small number of large, state-based disability organisations receive far higher average funding per supported employee than other organisations, despite the apparent “level playing field” of the DMI funding model. The variances are statistically significant and not explained by variations in the support needs of supported employees, given the size of the funding variances amongst organisations with similar employee populations.
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This skewing of funding is damaging the viability of ADEs, particularly as organisations with higher funding levels seek to expand into other jurisdictions where they compete against less well-funded organisations, resulting in increasing business viability pressures and closures.
The following two charts highlight the current inequitable ADE funding distribution, using aggregate state-based data (individual organisational examples are more extreme).
The first chart summarises average DMI levels across Australian states and territories in mid-2012. The average DMI ranges from 2.69 in Tasmania to 3.45 in Queensland. This variation cannot be explained by population differences, given the relatively large population of people with a disability in each jurisdiction.
Average 2012 DMI funding level by state
NT
WA
SA
Qld
Vic
NSW
Tas
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0
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The second chart shows the impact that this current funding variation would have on a moderately large ADE with 500 supported employees. These larger organisations are more likely to be involved in competition across multiple jurisdictions. It shows, for example, that a Queensland-based ADE employing 500 people would have a $1.3 million funding advantage over an equivalent Tasmanian ADE and an approximate $1.0 million competitive advantage over an equivalent NSW organisation.
500 employee ADE funding gap, by state
$1,400,000
$1,200,000
$1,000,000
$800,000
$600,000
$400,000
$200,000
$
Tas NSW Vic Qld SA WA NT
Gap $- $312,894 $693,270 $1,282,23 $427,722 $1,052,60 $957,042
Contact details: Andrew Richardson, Chief Executive Officer
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