4.1
This chapter reflects on the discussion in the committee's interim report on the current conditions facing the NDIS workforce and considers measures in the NDIS National Workforce Plan 2021-2025 and otherwise outlined in the government's response to the committee's interim report.
4.2
The chapter also considers government policy responses to the impact of NDIS price settings on NDIS workforce issues.
4.3
Readers are encouraged to review chapters 4 and 5 of the committee's interim report for detailed discussion of NDIS workforce conditions and NDIS price settings.
Workforce conditions
Discussion in interim report
4.4
In its interim report, the committee expressed concern that current workforce conditions in the NDIS are a significant barrier to growing the workforce to meet demand, and to attracting and retaining workers with the skills and qualifications to deliver safe, quality supports.
4.5
Key issues regarding workforce conditions that were identified in evidence included:
low pay, reduced working hours, and a lack of career advancement;
work intensification and job stress, with increased pressure to 'do more with less' to ensure that participants' needs are met;
increased casualisation, and a rise in insecure work;
the 'uberisation' of the workforce, with increased use of online platforms and direct engagement of workers by clients;
poor training, supervision, and professional support; and
bullying, harassment, and abuse, exacerbated by a lack of reporting mechanisms or avenues for redress.
4.6
The committee also noted that many of these issues appeared to be symptomatic of broader concerns with price settings and the consumer-directed funding model for the NDIS. Key issues considered by the committee in this respect included:
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 other funding and entitlement schemes.
4.7
In consideration of evidence outlining these concerns, the committee observed that prices for NDIS services 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. The committee was also concerned that the current NDIS price settings also created 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.
4.8
While acknowledging ongoing work by the National Disability Insurance Agency (NDIA) to address the impacts of price settings on the market, the committee was concerned that pricing issues within the sector have persisted and appeared to have worsened as the NDIS has rolled out.
4.9
The committee was further concerned that the consumer-directed funding model incentivises casual work, 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. The committee considered that there may be merit in exploring alternative funding arrangements to support workforce development. Submitters and witnesses suggested options in this regard, including a dedicated training and development fund.
4.10
Considering these matters, the committee recommended that the Government facilitate an independent review of the funding model for the NDIS, including current and future price arrangements for supports, to:
understand the impacts of the funding model on work in the NDIS, on the workforce, and on the quality of care for participants;
explore solutions, including alternative funding arrangements, where negative impacts are identified; and
examine stewardship arrangements for the NDIS, to clarify the agencies that should have responsibility for different aspects of the scheme (recommendation 1).
4.11
In addition to broader concerns about NDIS funding, the committee heard specific concerns about the Cost Model for support workers that the NDIA uses to set price caps for certain supports and services, including that the model:
sets base pay rates too low
limits providers' ability to recruit higher skilled staff
makes incorrect assumptions about leave, utilisation, supervision, and allowances; and
was developed without adequate consultation with people with disability, workers, or their representatives.
4.12
The committee recommended that:
the NDIA consider the concerns raised in the interim report in relation to the Cost Model for disability support workers in its next Annual Pricing Review (recommendation 2); and
all pricing reviews be undertaken in full consultation with people with disability, support workers and representative organisations (recommendation 3).
4.13
The committee also emphasised that the upcoming NDIS National Workforce Plan should have a core focus on improving workforce conditions in the NDIS.
Workforce plan
4.14
The NDIS National Workforce Plan (Workforce Plan; the plan) identifies three types of challenges for workforce development in the care and support sector:
Poor perception of the sector and unsupported entry pathways hinder attraction.
Variable and disconnected work conditions with limited training opportunities impact retention and quality.
Red tape and difficulties in adapting service models of providers reduce the time that workers spend supporting participants.
4.15
Initiatives under priority 1 of the plan are directed to changing perceptions of the care and support workforce and attracting workers. Initiatives under priority 2 focus on training and professional development for workers and providing professional support.
4.16
The plan does not include specific measures around other working conditions such as remuneration, insecure work, or working hours.
Government response to interim report
4.17
In its response to the committee's interim report, the government:
supported in principle recommendation 2; and
supported recommendation 3.
4.18
In relation to recommendation 1 (noted), the government emphasised the NDIA's statutory responsibility to have regard to financial sustainability in the context of determining prices of supports. The government also noted that it had previously commissioned an independent pricing review and stated that the recommendations arising from that review had been addressed and implemented by the NDIA. A project is also underway to 'consider approaches to improve the effective operation of the market for NDIS services', which will include 'exploring options for alternative approaches to price regulation, building market confidence, capacity and depth, as well as providing greater flexibility for the market to innovate and deliver greater consumer choice'.
4.19
In relation to recommendations 2 and 3 (supported in principle and supported), the government noted the existing processes for reviewing the Cost Model and NDIS price guide, including consultation undertaken as part of these processes.
4.20
In October 2021, the NDIA released a consultation paper for the 2021-22 Annual Pricing Review. As part of the review, the NDIA has sought feedback on about NDIS price limits and policy for the 2022-23 financial year through submissions and working groups. The terms of reference for the pricing review specify that, among other matters, the review is required to:
Review the pricing arrangements and price limits for core supports, by:
(i)
Examining the ongoing appropriateness of the methodology and parameters used in the NDIS Cost Model for Disability Support Workers, including through analysis of the most recent financial benchmarking data, paying particular regard to the outcomes of the Fair Work Commission’s 4 yearly review of modern awards—Social, Community, Home Care and Disability Services Award 2010 (AM2018/26).
4.21
The consultation paper notes that material changes to the Award (resulting from the review by the Fair Work Commission) that will be considered include:
a 2-hour minimum engagement for part-time employees (previously only for casuals)
allowances for broken shifts; and
payment for travel time between clients.
Submitter and witness views about the Workforce Plan and government response to the interim report
Workforce conditions
4.22
Submitters reiterated that current working conditions continue to negatively impact worker retention and expressed concern that the plan did not include concrete measures to address these concerns.
4.23
While acknowledging initiatives relating to attracting workers to the sector and improvements in training and professional development, submitters maintained that the plan should include further targeted measures to address working conditions for disability support workers and the broader NDIS workforce.
4.24
Some submitters emphasised that measures raising awareness around disability support work or perceptions of the sector miss the mark when wages remain low and conditions are poor, compared to other sectors. For example, Purpose at Work submitted that the measures in the plan to attract workers to the sector would be of little utility if the complex factors impacting retention are not addressed. The Health Services Union reported that, based on payroll data from the Australian Bureau of Statistics (ABS), the expected remuneration for disability support workers set out in the Cost Model, using the Social, Community, Home Care and Disability Services Award 2010 (SCHADS Award) is 84% percent of the median hourly rate for all employees, and even less if the disability worker is engaged under the home care stream of the award (70%), as set out in the below table:
Table 4.1: Comparison of disability support wages under the Social, Community, Home Care and Disability Services Award 2010 (SCHADS Award) and Australian Bureau of Statistics (ABS) median hourly earnings
|
|
|
|
|
|
Hourly rate
|
$30.17
|
$25.18
|
$36.00
|
|
|
|
|
|
|
% of Median Hourly Rate
|
84%
|
70%
|
100%
|
Source: Health Services Union, Submission 46.1, p. 6
4.25
The committee also heard that the plan should include measures to promote secure working arrangements, noting that casualisation and insecure employment impact on retention but remain largely unaddressed in the plan. National Disability Services, for example, submitted that the plan should include initiatives directed to supporting unions, employers and Fair Work Australia to work collaboratively to address industrial relations considerations.
4.26
One union submitter advised caution in relation to the plan's intention to promote opportunities for providers to adopt innovative service models, remarking that innovative models:
may be more cost effective for providers and deliver some benefit to service users but almost always result in a diminution of workforce conditions, including increased casualisation, increased job fragmentation and a decrease in autonomy for workers.
4.27
The committee was informed that broader questions regarding the impact of new employment models and the gig economy still need to be explored. For example, Hireup told the committee that matters such as the nature of different contractual arrangements and the obligations of participants who directly engage support workers (including through platform-based services) remain poorly understood.
NDIS Pricing and Cost model
4.28
As discussed in the interim report, one of the most direct policy influences on pay and conditions for the NDIS workforce is the NDIA price control framework. Under this framework, the NDIA sets price limits, which are the maximum prices that registered providers can charge NDIS participants for specific supports.
4.29
Price limits are described by the NDIA as a regulatory intervention to support the NDIS market while it is still growing and experiencing inefficient supply coupled with growing demand. While price limits do not directly set wages for disability support or other NDIS workers, by determining the upper limit of the prices that may be charged by registered NDIS providers, the committee heard that price limits impact the ability of providers to offer competitive wages and conditions to workers across the workforce.
4.30
Submitters over the course of the inquiry identified low wages and poor working conditions as core challenges to retaining a suitable NDIS workforce. Further, NDIS pricing approaches were identified as a key factor influencing the ability of providers to offer competitive wages that reflect the value and complexity of disability support work and working conditions that ensure that workers are appropriately supported, supervised and trained to provide safe and high quality care.
4.31
In discussing the workforce plan, submitters expressed disappointment that pricing measures in the plan were limited to a general commitment to 'continue to improve NDIS pricing approaches'. The committee heard that NDIS pricing should be given a higher profile in workforce planning and be a 'cornerstone' for other policies. Likewise, submitters were unhappy that the plan did not include measures to address wages in the sector, or even identify appropriate remuneration as a key issue affecting worker retention.
4.32
Speech Pathology Australia (SPA) noted that the Department of Social Services (DSS) provided a sector briefing in June 2021, during which it was explained that the plan does not include measures affecting remuneration for workers because this is set through industrial agreements that are reviewed through existing processes. DSS elaborated on this during one of the committee's public hearings:
Responsibility for setting award wages and conditions sits, as you'd be aware, with the independent industrial relations tribunal, the Fair Work Commission, not the Australian government. Of course, people can make applications to vary modern awards. Employers and employees can do that, as can organisations covered by the award and employee representative organisations.
4.33
DSS also maintained that employers are free to set pay rates above award wages and that NDIS price settings do not 'dictate the specific pay rates that are set by individual employers through their own business models'.
4.34
However, SPA considered that the government's position with respect to wage setting for NDIS workers ignores the current approach to setting price limits for NDIA services, and the role of the NDIA in setting these prices. Unions, such as the United Workers Union also reiterated criticisms discussed in the interim report that award wages and conditions, which are minimum standards, are being used in the Cost Model to set 'ceilings' whereby providers may be unable to change prices that allow them to offer competitive wages above the minimum award rate when they wish to attract and retain more highly trained, skilled and experienced workers.
4.35
Submitters also took the opportunity to reiterate specific concerns with respect to NDIS pricing and the Cost Model that had not been considered in the Workforce Plan including that:
the price guide assumes most supports will be offered at the rate of a level 1 disability support worker, which may reduce incentives for providers to engage more experienced or better trained support workers to provide these supports
some supports, particularly around mental health, may be misclassified under the cost model
funding for some allied health services is lower than that received under other schemes
pricing should better accommodate costs associated with travel; and
assumptions about the ratio of workers per supervisor (also referred to as 'span of control') lead to less support, coaching and fewer development opportunities for workers.
Royal Commission into Aged Care Quality and Safety
4.36
The approach taken by the Royal Commission into Aged Care Quality and Safety (Aged Care Royal Commission) in relation to concerns about low wages and poor working conditions in the aged care sector may be instructive for considering options to address working conditions for care and support workers in the NDIS.
4.37
The Aged Care Royal Commission considered working conditions and wages for aged care workers in its final report and made recommendations to support better working conditions and other improvements for the workforce in order to improve the quality of care in the aged care sector. These recommendations are discussed in Chapter 2.
4.38
Among a range of observations about the aged care workforce, the Commissioners concluded that aged care workers were poorly paid for their work. The Commissioners made two recommendations to facilitate collaboration between the Australian Government, aged care providers and unions to improve pay for aged care workers (relevantly, recommendations 84 and 85). As described in Volume 1 of the final report of the Commission:
First, we recommend that the Australian Government, providers and unions should collaborate on a work value case and equal remuneration application to the Fair Work Commission.
…Second, wage increases should be an explicit policy objective of aged care funding. As part of the new aged care funding system we propose, we are recommending the establishment of a Pricing Authority to set prices for high quality and safe aged care. We consider that an important part of that work will be to price aged care at a level that enables workers to be remunerated to reflect what similar workers are paid in similar sectors, such as health and disability. In setting prices for aged care, the Pricing Authority should take into account the need to attract sufficient staff with the appropriate skills to the sector, noting that relative remuneration levels are an important driver of employment choice.
4.39
In recommending collaboration on an application to the Fair Work Commission (FWC), the Commissioners emphasised that varying modern awards through FWC processes can be difficult. The FWC must be convinced that a variation is necessary and not merely desirable, and Awards are intended to operate as a safety net for workers and are therefore set at a low base.
4.40
However, the Commissioners also noted that that the chances of an application to the FWC being successful are significantly increased where the FWC 'is presented with an agreed position involving unions, employers and the principal funder, the Australian Government'.
4.41
The government responded to the Aged Care Royal Commission Final Report in May 2021. The government noted recommendation 84 in relation to supporting an application to the FWC, and, similar to its position in relation to wage setting for disability support workers, maintained that this is a function of the FWC, emphasising the importance of this body operating as an independent body for setting award wages. The government accepted recommendation 85, in relation to ensuring that wage increases should be an explicit policy objective of aged care funding. The government stated that it intends this to be achieved through the establishment of an independent pricing authority for aged care, which will 'consider the delivery of high quality care as a central pillar of its work'.
4.42
At the time of drafting this report, the FWC was considering applications to vary the awards relating to aged care work, including to vary minimum wage rates in the Social, Community, Home Care and Disability Services Industry Award 2010 for workers who provide home care to older Australians.
Committee view
Workforce conditions
4.43
In its interim report, the committee stated its expectation that the forthcoming national workforce plan should have a core focus on improving working conditions in the NDIS workforce. The committee is therefore disappointed to see that working conditions remained largely unaddressed in the plan outside of training measures.
4.44
The Workforce Plan notes that the flexibility offered through casual and even platform-based work is preferred by some workers, while others seek more stability in their working arrangements. Likewise, some NDIS participants may value the stability and increased safeguards that come from being supported by a more permanent workforce. Meanwhile, some people with disability will prefer the convenience of app-based platforms to find support-workers and opportunities to access cheaper supports. The committee notes the value and desirability of innovation in the NDIS, including through leveraging technology to take advantage of models of working that promote choice and control for people with disability to choose how and from whom they receive support.
4.45
It is, however, clear that the broader impacts on the NDIS workforce of contract-based work, casualisation and platform-based work are not well understood, and that more information is required to understand some of these impacts, including how these factors impact on retaining workers in the sector, the types of obligations that arise between participants and workers, and the complexities of different contractual arrangements between workers, platforms and participants.
4.46
Noting that there are still questions to be answered about these matters, the committee considers that, as a starting point, more information is needed about the prevalence of platform-based, and platform-like, arrangements in the sector, particularly with respect to the range of providers and individual workers who would be affected by any measures that may be directed at larger platform-based providers. Consequently, the committee considers that the government should ensure that data collected about the NDIS workforce, and the disability workforce more broadly, includes data about new employment models, including platform-based services.
4.47
The committee recommends that the Australian Government facilitate the collection of data to support better understanding about new working models being employed in the National Disability Insurance Scheme, including online and platform-based services.
NDIS Pricing
4.48
While the committee acknowledges that initiative 11 of the plan makes a broad commitment to improve pricing approaches, at the time of drafting this report, the government has not offered concrete strategies or solutions to the pressing issue of how the NDIS funding model and pricing of supports impacts on wages and conditions for the NDIS workforce.
4.49
The committee therefore remains concerned that the current NDIS price guide and the Cost Model for disability support workers may not currently reflect the value and complexity of disability support work, and do not support growing and maintaining a suitably skilled, qualified and experienced NDIS workforce. The committee is further concerned that these issues also affect mental health related supports and therapeutic supports in the price guide.
4.50
The committee notes that the regular Annual Pricing Review is underway at the time of drafting this report. A range of information about consultation processes undertaken as part of the review have been released, and the committee is pleased to see that the NDIA is consulting with a range of providers and participant representative groups. However, in its interim report for this inquiry, the committee also emphasised the importance of ensuring that the voices of workers are included in consultation processes in these areas. From the material currently provided, the committee cannot see that the government has included any specific plans to consult with workers in the current pricing review.
4.51
The committee recommends that the Australian Government ensure that workers in the National Disability Insurance Scheme and their representatives, as well as other stakeholders, are consulted in all regular pricing review processes and processes to review the Cost Model for Disability Support Workers.
Wages for the care and support sector
4.52
Alignment between the disability and aged care workforces is a key focus of the Workforce Plan, and broader planning for the care and support workforce in Australia. It's also clear that the aged care and disability support workforces face many of the same challenges. Both sectors include workers whose wages are set under the Social, Community, Home Care and Disability Services Industry Award 2010, and workers across these sectors are classified under the same occupational codes.
4.53
Encouraging individual workers and providers to register as NDIS providers is also important in this space, and the committee has more to say about registration in Chapter 8.
4.54
While noting that there are also significant differences in the types of work undertaken in each of these sectors, its notable that the Aged Care Royal Commission also considered workers in that sector to receive insufficient pay for the work that they do, similar to the arguments raised in this inquiry about disability support work. There may therefore be merit in the FWC reviewing an application in relation to wages for disability support workers similar to applications currently being considered regarding aged care workers, to ensure that wages in the sector reflect the value of the work.
4.55
The committee therefore encourages the government to reconsider its position with respect to supporting applications to the FWC for evaluation of wages in the care and support sector.