In-Kind Funding Threat 

In-kind funding is potentially the biggest threat to choice and control in NDIS housing and much of the detail about why is in the just published Specialist Disability Accommodation Rule. The Rule is the final source of truth about housing in the NDIS.

The Rule is great news on almost all fronts. Unfortunately, it is also possible that the Rule provides the legal basis for States to deny participants choice, forcing them to live in outdated poor quality housing.

In short, participants will be required to select an ‘in-kind’ housing option before they choose any other provider. In practice, almost all in-kind housing will be SDA properties owned by state governments.

Most concerning is that it is hard to see how this benefits people with disability. Instead, choice is being restricted to increase State Government revenue from SDA.

In practice, this means State Governments get first dibs on any tenancy. Participants will be forced to accept an ‘in-kind’ offer before they can select any other housing option.

This is clearly is not what was intended by the NDIS Act’s principles on choice and control.

https://www.ndis.gov.au/medias/documents/hb8/h8c/8799502172190/Factsheet-In-Kind-FAQs-FINAL.pdf

 

What is in-kind?

Under the NDIS Rules, each State Government can continue to fund services (either its own services or contracts with providers) and simply tell the NDIA that participants have to use these services before the NDIA pays cash to another provider.

In-kind arrangements were mostly intended to be a transitional step. Giving States more time to sort out the transition to the NDIS. It allowed for existing funding to continue to flow and avoid service distributions for participants. And it protects against market failure by smoothing the transition for providers who were being paid above-NDIS rates in the State Government contract.

Housing is different. There are not existing funding contracts anywhere near SDA. Most providers see SDA as a new additional revenue stream. DSC has not spoken to any provider who thinks they will be worse off under SDA.

So why use in-kind? It is not to protect existing above-NDIS rate payments by States because SDA will be greater than any existing revenue stream.

Instead, SDA creates a new revenue stream and States appear to be seeking an advantageous market position in this new competitive market, to the detriment of both participants and SDA providers.

 

What impact does this has on SDA providers?

Removing choice of SDA provider, creates a quasi-monopoly for in-kind providers. They force a participant to select their dwelling if they have a vacancy.

SDA providers who have taken business risks to try and create new housing in the NDIS will be placed in a back-seat position to a vacancy in any in-kind dwelling. Essentially, this guarantees the SDA revenues for all in-kind providers.

Any ‘in-kind’ SDA dwellings are giving a preferable market position.

But in practice, we know that there is huge unmet demand for housing. Vacancies in in-kind dwellings should be quickly filled – because, hey, participants don’t get a choice about taking the vacancy. It’s the only option they will get to look at.

Providers are very unlikely to be affected by this.

 

What impact does this have on participants?

Participants will bear the brunt of this policy.

Participants will be forced into ageing housing stock listed as ‘in-kind’ by a state government. These participants will be not be able to choose a new, technology-enabled, disability appropriate dwelling when there is an in-kind vacancy available.

The participants most at risk under this policy are those who are already living in an ‘in-kind’ SDA place. This group might be told by the NDIA that they simply cannot leave the dwelling.

Preventing people leaving their ‘in-kind’ dwelling would be the ultimate restriction on choice and control. This would prevent the mobility that the NDIS has based itself on.

It is extremely difficult to reconcile all this with the Convention. Article 19 of the Convention specifically states that “Persons with disabilities have the opportunity to choose their place of residence and where and with whom they live on an equal basis with others and are not obliged to live in a particular living arrangement”

The in-kind arrangements (and powers under s5.9 of the SDA Rule which allow the NDIA CEO to specify the SDA dwelling that will be funded for the participant) appear to directly undermine this right.  

 

What next?

The SDA Rule puts in place the legislative authority for these restrictions on choice and control. But they are only used if State Government ask the NDIA to use these powers.

The next step is to wait to hear what instructions the State Governments give the NDIA to list properties as ‘in-kind’.

This will be the test of whether participant choice and control is undermined in the NDIS. And the opportunity for States Government listing their properties as ‘in-kind’ to explain what benefits participants get from this quasi-monopoly and uneven market playing field created by in-kind SDA properties.