5.1
As foreshadowed in the previous chapter, the committee heard evidence that many workforce issues affecting the National Disability Insurance Scheme (NDIS) are driven by price caps and the consumer-directed funding model that underpins the scheme.
5.2
This chapter considers the impact of these factors on the NDIS workforce, and makes some preliminary recommendations to address identified concerns.
5.3
Key issues considered in this chapter include:
price settings under the NDIS, including the Cost Model for disability support workers (Cost Model);
consumer-directed care arrangements;
workforce concerns associated with NDIS funding, including specific concerns about elements of the Cost Model;
proposals to address concerns associated with NDIS funding; and
specific examples of funding and entitlement schemes.
Price setting under the National Disability Insurance Scheme
5.4
One of the most direct policy influences on pay and conditions for the NDIS workforce is the price control framework. Under this framework, the National Disability Insurance Agency (NDIA) sets maximum prices ('price caps') for most of the supports delivered by registered providers. Providers are not required to charge at the maximum price for a given support or service, and participants and providers are free to negotiate lower prices.
5.5
Price caps and other price controls do not apply to unregistered providers. Self-managing participants can use registered or unregistered providers and are not subject to pricing arrangements. However, registered providers must follow the price caps and price controls in delivering supports to participants. Plan managers must adhere to the price limits and controls, including ensuring that their prices do not exceed the caps set by the NDIA when purchasing supports from a registered or unregistered provider.
5.6
According to the NDIA's Pricing Strategy, price controls set by the NDIA are in place to ensure effective market development during the transition to the NDIS. Ultimately, it is intended that pricing will be de-regulated as markets develop and operate more effectively.
5.7
According to its Annual Pricing Review 2020–21, the NDIA is committed to continuous improvement of the methodologies underpinning the NDIS price control framework. The NDIA undertakes an annual review of price settings, in consultation with stakeholders, to determine if prices remain appropriate.
Cost model for disability support workers
5.8
Price limits for core supports are determined using the Cost Model. According to the NDIA:
The Cost Model estimates the cost of delivering a billable hour of support taking into account all of the costs associated with every billable hour, including: base pay; shift loadings; holiday pay; salary on costs; supervision costs; utilisation (non-billable activities); employee allowances; corporate overheads and margin.
5.9
The Cost Model uses the Social, Community, Home Care and Disability Services (SCHADS) Award to set base rates from which billable hourly rates are calculated. Base rates for support workers at four 'levels' are set out in the table below.
Table 5.1: Assumed SCHADS classification and Award rates, 1 July 2020
|
|
|
|
|
DSW 1
|
2.3
|
$29.56
|
|
DSW 2
|
2.4/3.1
|
$30.69
|
|
DSW 3
|
3.2
|
$31.92
|
|
DSW 4
|
4.4
|
$38.34
|
5.10
The table below sets out how the Cost Model translates assumed SCHADS rates to billable hours.
Table 5.2: Billable hourly rates from standard hourly rates, 1 July 2020
|
|
DSW 1
|
DSW 2
|
DSW 3
|
DSW 4
|
|
Standard hourly rate
|
$29.56
|
$30.69
|
$31.92
|
$38.34
|
|
Leave entitlements
|
+ $6.42
|
+ $6.66
|
+ $6.94
|
+ $8.34
|
|
Salary on-costs
|
+ $4.33
|
+ $4.50
|
+ $4.67
|
+ $5.60
|
|
Supervision
|
+ $2.90
|
+ $3.33
|
+ $3.33
|
+ $3.70
|
|
Casual loading
|
+ $0.52
|
+ $0.53
|
+ $0.55
|
+ $0.67
|
|
Utilisation
|
+ $3.80
|
+ $5.65
|
+ $6.65
|
+ $14.16
|
|
Overheads
|
+ $5.70
|
+ $6.16
|
+ $6.49
|
+ $8.50
|
|
Margins
|
+ $1.06
|
+ $1.15
|
+ $1.21
|
+ $1.59
|
|
Billable hourly rate
|
$54.30
|
$58.68
|
$61.76
|
$80.90
|
|
Total increase on
standard hourly rate
|
83.7%
|
91.2%
|
93.5%
|
110.0%
|
5.11
From the Cost Model, price limits for core support item are determined. These are set out in the NDIS Price Guide 2020–21 (Price Guide). Relevantly, the Price Guide includes assumptions about the 'level' of support worker that would be most appropriate to deliver particular supports, shift loading, and loading for supports delivered in particular geographic areas.
Table 5.3: Support pricing adjusted for geographic location
|
|
|
|
|
|
|
Assistance with self-care standard—week day
|
Hour
|
$54.30
|
$76.02
|
$81.45
|
|
Assistance with self-care Level 2—week night
|
Hour
|
$65.77
|
$92.08
|
$98.66
|
|
Assistance with self-care Level 3 – Sunday
|
Hour
|
$111.53
|
$156.14
|
$167.30
|
Consumer-directed care arrangements
5.12
The NDIS is a significant example of a consumer-directed care scheme. Under such schemes, funding for services is allocated to individual care users—in this case, participants—to purchase services and supports that meet their needs and preferences. Market-based mechanisms are then used to achieve choice, control and efficiency through competition.
5.13
Consumer-directed care arrangements are lauded for placing greater control in the hands of clients. Indeed, increasing participant choice and control was one of the key reasons for moving to the NDIS from former state-funded disability arrangements. However, such arrangements may result in poor conditions for the workforce—including increased casualisation, suppressed wages and fragmented working arrangements.
Workforce concerns associated with NDIS funding arrangements
5.14
The committee heard from a number of submitters and witnesses that there are concerns regarding the impact of current price settings on the NDIS workforce. The general consensus is that current prices, implemented in the context of a consumer-directed care scheme, are driving many of the poor conditions outlined in the previous chapter, thereby creating barriers to attracting and retaining an appropriate skilled workforce. As Dr Georgia van Toorn stated:
Many of [the] challenges [facing the NDIS workforce]…stem from the NDIS's market-driven approach combined with its pricing arrangements, which combine to create strong incentives for providers to casualise their workforce and to cut costs associated with things like training, supervision and professional development.
5.15
Maurice Blackburn Lawyers observed that many negative workforce impacts stem from the fact that providers are only able to claim for individual 'units' of care, billed on an hourly basis. Stable work is difficult to secure under such arrangements, and support workers are unable to develop lasting relationships of trust with participants.
5.16
These views were echoed by Dr John Chesterman, Deputy Public Advocate, Office of the Public Advocate (Victoria) (Vic OPA), who expressed concern that the pricing structure may not be suited to the administration of complex services involving restrictive practices and behaviour support:
[T]he pricing structure …is predominantly attributable to contact hours—that is, time spent with a participant—with little to no surplus to account for the additional work that a worker asked to administer a restrictive practice will be required to undertake. That would ideally include specialised training professionally delivered to the [behaviour support plan], time for staff handovers, regular supervision, opportunities for debriefing and time to write reports.
5.17
The committee also heard that current prices and funding arrangements place downward pressure on wages. The United Workers Union (UWU) stated that:
Not only does the NDIS funding and pricing framework institutionalise low pay, it entrenches award conditions as the ceiling rather than the minimum, preventing any capacity for providers to appropriately compensate and attract skilled and experienced workers.
5.18
Purpose at Work (PaW) raised similar concerns, stating that enterprise bargaining under current pricing arrangements is 'unproductive and therefore less likely, since employers have little to bargain with'.
5.19
Mr Danny McCormick, an experienced disability support worker, noted that current prices do not permit employers to offer a higher wage to experienced workers or to incentivise those workers to deliver more complex supports. Anglicare Australia expressed similar views, in the context of supporting participants with psychosocial disability:
When people with psychosocial disability don't get the flexible and intensive psychosocial support they are in need of, this can progress to them needing acute care in hospitals more often. The pricing structure does not foster the flexibility to access higher qualitied workforce for supports for these cohorts such as counsellor level support.
5.20
The committee also heard that training and supervision is often not viable under current funding arrangements. For example, Allied Health Professions Australia (AHPA) noted that:
There is no incentive for providers to invest in training and support of their workforce beyond minimum standards. Those that choose to do so base that decision on a commitment to providing high quality care. However, they find themselves competing with other providers that may not have the same commitment to workforce development.
5.21
In addition, submitters and witnesses indicated that there is little capacity under current prices to facilitate non-client-facing activities such as debriefing and reflection. This is a particular concern for workers supporting participants with psychosocial disability and cognitive impairment:
Psychosocial support workers need time to reflect, to plan, to debrief, to be in a position to provide the quality that's required, and organisations also need the capacity to invest in ongoing quality and to meet those very high standards of financial and human resources support that is expected.
5.22
The inability to conduct non-client-facing activities such as training, handover, case discussion and reflection may be due, at least in part, to assumptions that funds in plans will only be used for direct supports. AHPA stated that:
[P]articipants may not see it as appropriate that their plan funds anything that doesn't directly benefit them. But from the perspective of the broader Scheme and the ongoing development of retention of the workforce, this structure has real risks.
5.23
Mr Ross Joyce, CEO, Australian Federation of Disability Organisations (AFDO), echoed this view, noting that participants have expressed concern that 'management fees' sometimes equal fees for direct supports. Mr Joyce noted that this creates tension between participants and support workers, and may undermine workers' capacity to build meaningful relationships with the people they support.
5.24
The committee heard that current price settings are a greater concern for large providers, which often have higher overheads and administrative costs than smaller providers. For example, Ms Courtney Wolf, NDIS Appeals Advocate and Systems Advocate, Queensland Advocacy Incorporated (QAI), stated:
When someone comes in under a provider, the provider charges, say, the $56 or $58 that it is per hour and pays their worker between $22 and $30 an hour. A contractor or sole trader may charge $40 an hour, but that still comes in underneath the price guide rate.
5.25
Ms Emeline Gaske, National Campaign Coordinator for the Australian Services Union (ASU), asserted that issues associated with current price settings require urgent solutions:
Under the current pricing, it's almost impossible to provide decent jobs because they're not secure jobs, they're not fairly paid and they can't provide the prospect of a career because of the lack of training and qualifications. The pricing also doesn't recognise the level of skill in the work or the time required to…provide…quality disability support.
[T]this is a crisis, it is urgent and everyone in this virtual meeting room has been talking about the solutions to this for a number of years now when we know what the solutions are…I urge this committee and all involved to treat the problem with the urgency that it requires.
The transition to the NDIS
5.26
Submitters and witnesses indicated that many of the concerns outlined above are linked to the transition to the NDIS from the former state-funded disability support model—in addition to inherent challenges in consumer-directed care.
5.27
For example, QAI indicated that while the transition to the NDIS may have led to greater choice and control for participants, providers no longer have access to a guaranteed income. According to QAI, this has increased casualisation and precarious employment within the sector, as providers struggle to remain financially viable under new price and service arrangements.
5.28
Maurice Blackburn Lawyers noted that service providers are facing 'enormous issues' moving from block funding to a fee-for-service model. According to Maurice Blackburn, organisations are having difficulty maintaining funding while the transition occurs and making the model profitable—leading to unwillingness or the inability to make commitments about staff tenure:
[O]rganisations of all sizes…are seriously considering their short and medium term viability, and actively pursuing closure or merger options. These include small community operations, as well as large…organisations which have received multi-million dollar/multi-year contracts in the past. With little in the way of retained savings, they simply cannot see how they can survive the funding shortfalls during the transition period.
Pricing in regional, rural and remote areas
5.29
The committee heard that pricing is a particular challenge in regional, rural and remote areas, due to travel costs and higher overheads associated with remote premises. Providers in these areas may also need to pay a higher wage to attract staff who understand the challenges of rurality and the needs of local communities.
5.30
Services for Rural and Remote Allied Health (SARRAH) noted that the cost of delivering services in rural and remote areas deters the establishment of private allied health services, stating that the significant travel time and cost is not offset by present funding instruments.
5.31
The committee also heard that that there are issues associated with differences in pricing between Modified Monash Model (MMM) areas, and insufficient clarity around where prices change. For example, Ms Jane Timmermanis, General Manager and Principal Solicitor, Sussex Street Community Law Service, noted that prices may change from around $54 per hour in MMM Zone 5 to $90 per hour in MMM Zone 6—despite there being only 20km between the actual locations.
Allied health supports
5.32
While the committee heard less about prices for allied health services than pricing for supports delivered by disability support workers, some submitters indicated that prices are a concern to the allied health sector. The Australian Psychological Society noted that specialist training is not recognised under current pricing. Speech Pathology Australia observed that pathology services can be purchased under a range of funding schemes, stating that funding arrangements under the NDIS must be made administratively 'easier' to secure a sustainable speech pathology workforce.
5.33
AHPA stated that a significant challenge to the retention of allied health practitioners is the limited support in NDIS pricing for supervision or mentoring, noting that while many practitioners operate in relative isolation, they are likely to have complex, varied caseloads. According to AHPA, this is exacerbated by lack of support in current prices for dedicated case discussion.
5.34
Some submitters also noted some apparently arbitrary differences between the price caps for certain allied health services. For example, AHPA stated that while it supports price caps in general, there is a difference in pricing between exercise physiology and other allied health services that is not explained by differences in qualifications or the pricing of services outside the NDIS.
Pricing assumptions in the Cost Model for Disability Support Workers
5.35
In addition to the general concerns about prices and funding arrangements outlined above, some submitters and witnesses raised more specific concerns about the assumptions underlying the Cost Model. Pricing assumptions in the Cost Model were a particular concern for the unions representing disability support workers, which asserted that the model does not reflect the realities of disability support work, and was developed without adequate consultation with people with disability, workers or their representatives.
5.36
The committee also heard that concerns regarding the Cost Model are not new. For example, Carers NSW noted that it had raised concerns about previous versions of the model as part of other inquiry processes.
5.37
Specific concerns about the Cost Model are as follows:
Base pay assumptions are too low, and do not reflect the complexity of disability support work. The model assigns disability support worker (DSW) 'levels' to particular SCHADS classifications to determine base pay rates. From these, a billable hourly rate for NDIS supports is generated. The SCHADS classification 2.3 is assigned to DSW 1, meaning that the base pay rate is $29.56.
Under the SCHADS Award, a level 2 employee is expected to perform personal care services or 'elementary tasks [in] a community service program' defined by established routines and operational guidelines. With the NDIS' focus on choice and control, work expected at the DSW 1 level is often complex and varied. This is particularly the case when supporting participants with complex needs.
Award rates are intended as a 'floor' on wages and conditions. However, the Cost Model uses the Award to impose a 'ceiling' on wages.
The Model limits providers' ability to recruit and pay higher-skilled staff. The Cost Model and Price Guide assume that certain supports are provided by a support worker at a particular level (for example, DSW 1). Providers are unable to charge more for the support if it is delivered by a worker with more skills, training or experience. This limits providers' ability to pay staff according to their credentials, as well as their ability to recruit the highly skilled staff needed to deliver certain kinds of disability support.
The Cost Model makes incorrect assumptions about rates of leave. The model does not include certain leave entitlements (for example, a fifth week of annual leave which may accrue to shift workers). In addition, it leaves little scope for bargaining around additional leave and does not take into account differing leave entitlements across jurisdictions.
The Cost Model makes incorrect assumptions utilisation rates. The model assumes that the vast majority of support workers' time is spent on client-facing activities, and fails to take account of the time spent on induction, training, reflective practice, reporting and compliance.
The cost model makes incorrect assumptions about supervision. The assumed span of control is too high, thereby limiting effective supervision. Moreover, the span of control is not varied to take account of the complexity of providing particular services or supporting certain participant cohorts.
The Cost Model does not clarify the nature of 'overheads', and does not provide for employer-funded training or enterprise bargaining.
The Cost Model does not build in certain allowances. The model does not include first aid allowance, as required under the SCHADS Award. Moreover, the model does not build in vehicle allowances or travel time. This is a concern given that substantial (often unpaid) travel is often required of support workers in regional, rural and remote areas.
Proposals to address concerns associated with NDIS funding
5.38
Submitters and witnesses suggested a range of measures to address issues associated with NDIS price settings and the consumer-directed funding model for the scheme, emphasising that addressing these issues is crucial to the sustainability of the workforce and to ensuring safe, quality supports.
5.39
Carers NSW stated that an independent review of the NDIS price guide should be undertaken—with a view to ensuring prices capture the cost of attracting and retaining skilled workers and of non-client-facing activities including induction, training and supervision.
5.40
The UWU suggested a broader review of the impact of individualised funding on the nature of work in the NDIS, with a view to exploring alternative models if adverse impacts are identified. Representatives of the Health Services Union (HSU) also expressed support for exploring alternative funding models:
[T]here needs to be another look at the one-size-fits-all funding model around individualisation, and we support that for participants. However, in terms of developing the market and a workforce to meet the market's demand, there really needs to be additional—for want of a better term—block funding for cross-sector coordination of workforce development, a workforce development plan and the delivery of training that is absolutely critical if we are to undertake market stewardship correctly.
5.41
Mr Danny McCormick, an experienced disability support worker, indicated that there would be merit in implementing graded price settings according to the skills and experience of the worker, stating that:
[G]radings should mandate the experience and training required for a DSW to provide support and, as such, pay a graded rate of pay. This would allow appropriately skilled and dedicated DSWs to choose to support the most challenging roles and to be appropriately rewarded for their dedication. DSWs will know that there will be greater opportunities for financial and career advancement if they remain employed within the sector and continue to increase their knowledge.
5.42
In relation to regional, rural and remote areas, the Northern Territory Office of the Public Guardian (NT OPG) suggested that the NDIS may wish to consider block funding certain services; pooled funding agreements; and community-controlled services and funding in certain areas. SARRAH suggested that the Commonwealth should consider changes to how services are remunerated—including consideration of supplementary funding, infrastructure grants, loading of fee schedules based on rurality, and incentive payments to ensure equitable access to services in rural and remote areas. It also suggested there may be merit in classifying all participants in rural and remote areas as 'complex needs'—regardless of their condition—to account for additional challenges associated with reduced access to services.
5.43
Some submitters and witnesses stated that there would be merit in transferring responsibility for price controls to the Quality and Safeguards Commission, noting that reconsideration of stewardship arrangements might address some funding issues. Mr Lloyd Williams, National Secretary, HSU, observed that:
The NDIA is about ensuring that plans and the scheme are implemented for participants. We don't think that it's appropriate that they are the price setters and that it may well be better for that to sit with the Quality and Safeguards Commission.
5.44
Some submitters and witnesses recommended the wholesale removal of price caps. For example, Cara asserted that the NDIS would have a higher calibre workforce and improved participant safeguards if there was no price cap, stating that the cap prevents organisations from meeting customer needs through training and increases staff turnover.
5.45
Some submitters suggested that the NDIA should fund certain aspects of disability support outside of the existing funding model. For example, AHPA argued strongly for the Commonwealth to identify ways to ensure the disability funding system can support both student placements and early career development. This should be developed separately from the funding of service delivery under the NDIS, and viewed as an investment in the long-term development of the disability workforce.
5.46
Mental Health Australia (MHA), Community Mental Health Australia (CMHA) and the Mental Illness Fellowship of Australia (MIFA) noted that many providers serving people with psychosocial disability believe that alternative funding models are required for psychosocial supports, to allow for recovery-oriented practice, proper wrap-around case management, and risk and incident management. Alternative funding arrangements might include subscriptions, memberships, bulk buying support 'incidences' in advance, full 'course' fees, and more lenient cancellation policies.
5.47
The committee also heard that addressing issues associated with the funding structure for the scheme should not encourage a return to a block-funding model. Ms Romola Hollywood, Director, Policy and Advocacy, People with Disability Australia, stated that:
[T]he NDIS was needed….[P]eople with disability were segregated from the community and had very little choice and control on who delivered supports, how they [were] delivered and where they [were] delivered. We're still…trying to unpick really quite damaging processes of segregation that have been built up over many years.
…I would hazard and caution against the notion of looking backwards rather than looking forwards. That's why a full workforce strategy covering all of the areas that I mentioned in the opening statement in consultation not just with the workers but with people with disability is really important.
The Cost Model for disability support workers
5.48
Unions representing support workers emphasised that the Cost Model must reflect the 'true' cost of disability support work—including secure jobs; career advancement; training and supervision; and fair pay. They recommended amending the model to:
increase base rates of pay. For example, the model for a DSW 1 worker should assume a SCHADS classification of at least 3.1;
address the issue of applying DSW 2 and 3 pricing to specific supports, noting that workers providing these supports must be permanently classified at a higher level under the SCHADS Award;
account for the higher quantum of leave to which significant numbers of support workers are entitled;
reduce assumed utilisation rates, to capture the variety of necessary non-client facing activities; and
lower the span of control for supervisors, and build in the capacity to vary the span of control according to the complexity of the relevant supports.
Specific funding and entitlement schemes
Portable long service scheme
5.49
The HSU observed that the marketisation of disability support driven by the NDIS is likely to lead to increased structural labour mobility, which may deprive workers of the ability to accumulate long service leave for reasons beyond their control. It stated that a key initiative to improve retention in this context is the introduction of a portable long service leave scheme (PSL).
5.50
According to the HSU, such schemes have a number of benefits, including:
improving worker retention in industries with high levels of labour mobility, thereby increasing the overall supply of skilled workers;
providing the flexibility for workers to take time out of the workforce to improve their skills through formal education and training or to take on caring responsibilities; and
productivity gains as a result of workers being able to take a sustained break from a long period of work.
5.51
The HSU noted that both the ACT and Victoria have PSL schemes in place, and the NDIA has incorporated the relevant legislative changes into its pricing models. It asserted that expanding this entitlement to the entirety of the NDIS workforce would expand benefits currently received in Victoria and the ACT.
5.52
Other submitters supported development and implementation of a PSL. For example, Mr Danny McCormick, an experienced disability support worker, stated that:
If the NDIS is about client choice, the lack of portability of Long Service Leave entitlements is a significant barrier to providing that choice. Portable Long Service Leave is used in other sectors to retain workers, and those schemes are not seen as an unaffordable cost, despite the funding of those sectors coming from a far wider variety of sources.
Disability workforce sustainability, training and development fund
5.53
In response to questions on notice, the HSU observed that the Commonwealth could support provider readiness and workforce outcomes by investing in a Disability Workforce Sustainability, Development and Training Fund (the Fund), modelled after the Aged Care Workforce Supplement.
5.54
According to the HSU, the Fund would be created to enable providers to pursue workforce development, innovation and support structures and access in-service training with a direct and substantial connection to the NDIS. As to how the Fund would operate, the HSU stated that:
Employers would access the Fund based on set criteria for the recurrent project funding over the operational period of an enterprise bargaining agreement (EBA) to implement agreed workforce sustainability and development initiatives contained in a completed and endorsed EBA. The period would be aligned to the life of the agreement (maximum of 4 years).
Access to the Fund would be restricted to applications from employers who have developed the proposed initiatives via an EBA to which the relevant union(s) is a party and involved in the negotiation, development and endorsement of the agreement by the workers themselves.
Committee view
5.55
The committee is concerned that prices may not be set at a level that enables the sector to consistently offer stable employment or competitive wages that reflect the complexity and value of disability support work; or to invest in training, supervision or professional development. Current prices also create particular challenges in regional, rural and remote locations, owing to the higher costs of operating in those locations and a need for incentives to attract suitably qualified staff.
5.56
In its inquiry into market readiness for the provision of services under the NDIS, the committee expressed concern that the then NDIS pricing was inhibiting market development and growth, with some providers indicating that they were discontinuing services to NDIS participants due to the inability to operate 'even remotely profitably'. The committee observed that, at the time, the NDIA had made some changes to price settings following the 2017–18 Independent Pricing Review (IPR). It stated that it was too early to assess whether these changes would have a positive impact on the market, and recommended an evaluation of IPR recommendations be undertaken as part of the following NDIS pricing review.
5.57
The committee also noted that with prices being determined by the NDIA, there is an inherent risk that pricing will be used to offset budget pressures. It recommended that Government allocate resources to the NDIS Quality and Safeguards Commission to establish a strategic unit responsible for monitoring and review of NDIS prices, with the aim of transferring price setting powers to the Commission in July 2020.
5.58
In its response, the Government stated that it did not support transferring responsibility for pricing to the Quality and Safeguards Commission, noting that the NDIA was finalising new terms of reference and membership for its Pricing Reference Group to increase the number of independent experts and to increase the transparency of pricing decisions. It also stated that the NDIA had taken steps to address all 25 of the recommendations in the IPR, with some included in the agency's pricing strategy and review program.
5.59
The committee acknowledges that the NDIA has continued its work to address the impacts of price settings on the market, and routinely updates pricing arrangements in response to market trends, following consultation with industry, community and government stakeholders. However, the committee is concerned that, despite the ongoing work of the NDIA, pricing issues persist within the sector, and appear to have worsened as the NDIS has rolled out.
5.60
The committee has also heard that poor working conditions within the sector may be driven by the consumer-directed funding model that underpins the NDIS. The committee acknowledges that this model aims to increase choice and control for participants, noting that concern as to the disempowerment of people with disability was a key reason for implementing the NDIS.
5.61
However, the committee is concerned that the consumer-directed funding model contains incentives to casual work and reduced job security, lower pay and poor training practices, and is increasingly leading the sector to view highly skilled, relationship-driven work as a series of transactions between worker and client. While this model may, on its face, increase choice and control for people with disability, evidence indicates that it is not a pathway to sound workforce or market development or to safe, quality care. As noted in a recent report by the Australia Institute:
It is hard to imagine how the laudable goals of voice and empowerment can occur within this…cost-focussed, under-resourced, commercialised space….The ongoing churn and turnover among the disability service workforce, and the instability and even financial crisis experienced by many agencies, will surely further delay the development of the much larger labour force that will be required to fulfil the NDIS' vision.
5.62
Also unclear is whether impacts of the consumer-directed funding model on the workforce were given sufficient consideration prior to implementation of the NDIS. The committee notes that the 2011 Productivity Commission report, which recommended the model for the NDIS, stated in relation to consumer-directed funding arrangements that:
There can also be risks for support workers, such as low pay, failure to meet statutory employment standards and abuse. However, there is little consistent evidence of low wages, but reasonably reliable evidence that wellbeing of employees is typically better, or at least no worse.
5.63
The committee appreciates that choice and control for people with disability is paramount to the NDIS, and would not suggest a wholesale return to the former block-funded arrangements for disability support. However, evidence before the committee indicates that there may be merit in exploring alternative funding arrangements—at least for certain elements of the scheme such as training and non-client-facing activities—to support workforce development. Submitters and witnesses have suggested options in this regard, including a dedicated training and development fund.
5.64
In light of these matters, the committee considers that the Government should facilitate a review of the funding model for the NDIS, including current and future price arrangements for supports. The committee appreciates that these matters may be captured by the next review of NDIS costs in 2023. However, there would be value in commencing a review at an earlier date, so that reforms can be identified and implemented as soon as possible.
5.65
The committee considers that the review should be conducted independently of government, and should include extensive consultation with people with disability and representative organisations, workers, unions, peak bodies, government agencies and other key stakeholders. The aim of the review should be to understand the impacts of the funding model on work in the NDIS, on the workforce, and on the quality of care for participants. Where negative impacts are identified, solutions—including alternative funding arrangements—should be explored. In addition, the review should also examine stewardship arrangements for the NDIS, to clarify the agencies that should have responsibility for particular aspects of the scheme.
5.66
The committee recommends that the Australian Government facilitate an independent review of the funding model for the National Disability Insurance Scheme (NDIS), with a particular focus on:
exploring whether it is appropriate for the National Disability Insurance Agency to have responsibility for price settings for NDIS supports;
ensuring that prices reflect the 'true' cost of service delivery, including training, supervision, case management and other non-client-facing work;
addressing impacts of the funding model on the nature of work within the NDIS, including the implications for support workers, allied health professionals and others;
addressing the impacts of the funding model on the quality and safety of supports and services for NDIS participants; and
exploring alternative funding models where negative impacts are identified.
5.67
The committee will further consider issues associated with NDIS price settings and the funding model for the scheme in its final report. If possible, this will include consideration of how the Government proposes to ensure that prices are set at a level which allows the NDIS to support stable working conditions at competitive wages and invest in training and professional development, while maintaining the financial sustainability of the scheme and ensuring participant choice and control.
Cost Model for Disability Support Workers
5.68
In addition to the broader concerns about NDIS funding outlined above, the committee heard there are a number of specific concerns about the Cost Model for support workers that the NDIA uses to set price caps for certain supports and services. The committee heard that the model sets base pay rates too low; limits providers' ability to recruit higher skilled staff; and makes a number of incorrect assumptions about leave, utilisation, supervision and allowances.
5.69
The committee acknowledges that a number of matters raised by submitters and witnesses relate to a previous version of the funding model (which was superseded in July 2020), and that the NDIA has recently made changes to the Cost Model following its 2020–21 price review. However, it appears that several concerns raised in evidence persist in the current Cost Model. Indeed, certain elements of the current model may be cause for greater concern.
5.70
Submitters and witnesses also expressed concern that cost models have been developed without adequate consultation with people with disability, workers or their representatives. In this regard, the committee notes that the final report for the most recent price review states that the NDIA held face-to-face consultations and working groups with a significant number of providers and peak bodies. However, the extent to which people with disability, support workers and unions were consulted remains unclear.
5.71
The committee strongly considers that the NDIA should ensure that the next annual price review takes into account the concerns raised in this report in relation to the Cost Model for disability support workers. Further, it is imperative that the price review be undertaken in full consultation with people with disability, support workers and representative organisations.
5.72
The committee recommends that the National Disability Insurance Agency consider the concerns relating to the cost model for disability support workers raised in this report in the next annual pricing review.
5.73
The committee recommends that the National Disability Insurance Agency ensure all pricing reviews are conducted in full consultation with people with disability, support workers and representative organisations.