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Submission to the VPSC Review of Residential Charges in Group Homes for People with a Disability
Review of Residential Charges in Group Homes for People with a Disability.
A submission to the Victorian Public Sector Commission
Authors: Max Jackson & Margaret Ryan
Abstract
This paper highlights that the National Disability Insurance Scheme provides a new context for the provision of disability services and support. The writers submit that this new context must be a prime consideration for this review.
The writers argue that that the scoping of services and fee setting and fee payment is a matter that is best left to the parties to the service contract being entered into. Hence, they recommend the adoption of a transformational ‘market model’ to apply as regarding residential charges in group homes for persons with a disability.
The writers make comment on matters arising out of the terms of reference, and highlights aspects which they submit require the review to be transparent as to the information on which it might base any findings. Particularly, because there is now NDIS funding for disability related supports other than staffing costs, they query the impact of disability related costs on residents.
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BACKGROUND
Contextual perspective
The context for the review is that:
· The Victorian Public Sector Commission – VPSC (formerly the State Services Authority) is conducting an independent review of residential charges in group homes for people with a disability (the review).
· The review is focused on residential charges as defined in the Disability Act 2006 (rent and service components). In addition, the review will consider other fees that may exist in conjunction to residential charges (such as a transport fee).
· The review is looking at residential charges in group homes operated by both the Department of Human Services and community sector organisations.
· The review is not examining support services for people living in group homes (such as staffing arrangements and staffing costs to organisations).
The terms of reference (TOR) for the review are that it is to consider:
§ The adequacy of current residential charging models, revenue streams for community sector organisations and the impact on the viability of disability residential services.
§ Identification of variation in fee models and service expenditure by providers of disability residential services and opportunities to improve equity and fairness.
§ Pricing models including consideration of full cost recovery (excluding support) rather than subsidisation for rent and house-keeping.
§ The impact of other disability related costs on residents; for example, fees for day services and transport.
§ Analysis of Commonwealth allowances residents may receive and their applicability to fee setting.
§ The impact of fee structures on client outcomes and consideration of hardship principles and policy.
§ Models used by other Australian jurisdictions for residential charges.
§ Applicability of current fee structures for transition of residential services to the NDIS and proposed preferred alternative fee structure if indicated.
§ Opportunities to standardise or streamline charging processes and reduce administrative burden for disability service providers, administrators and residents.
§ The role of Government in fee setting for services such as disability residential services.
PART A: THE NEW CONTEXT FOR THE PROVISION OF DISABILITY SERVICES AND SUPPORT - THE NATIONAL DISABILITY INSURANCE SCHEME (NDIS)
The implementation of the National Disability Insurance Scheme (NDIS) means that funding will be available for reasonable and necessary support for all persons with disabilities who meet the Scheme’s eligibility criteria.
This will no doubt have a significant impact on the broader issue of the recurrent funding available to persons who choose to live in a shared or group home with other persons with disabilities. The writers make the assumption that these residents are eligible for funding via the NDIS. A further assumption made by the writers is that, for this review, a group home is where there are two or more persons with a disability sharing the home.
In its recent pricing document “Support Clusters Definitions and Pricing for Victoria” (http://www.ndis.gov.au/sites/default/files/documents/price_list_vic_1july2014.pdf) the National Disability Insurance Agency (NDIA) set out its funding for “Assistance with daily life tasks in a group or shared living arrangement” and noted that “The item prices do not include the cost of rent, board and lodging or other day to day usual living expenses such as food and activities, as these are not funded by NDIS.”
The NDIA prices/funding are quoted on a per person per week basis, and, as the writers understand the NDIS, the dollars “belong” to the person, not to a service provider. The person controls the funding. The writers consider that because of this approach to funding, there is less merit in the call which has come from some in the disability sector for there to a different provider for the “bricks and mortar” to the support provider.
The assumption is made that the funding as published would be for staffing costs, that is, people who are being paid to provide assistance with daily life tasks. While the NDIA has foreshadowed there is a forthcoming discussion paper on housing, indications are that the NDIA has limited capital funding available, and that the capital cost of housing is a State matter.
Nonetheless, based on the writers’ knowledge of there being families and family groups willing to fund and fundraise for the “bricks and mortar”, they make the projection that there will be a significant increase in the amount of “group housing” for persons with disabilities. The barrier which has existed in the past, that is, the lack of recurrent funding for staffing costs, will no longer be an issue. The writers also project that the amount of housing will increase because there will likely be disability agencies looking to expand their existing residential services and also agencies looking to get into the business of residential services. The basis of this assumption is that agencies will see this as a way attract “disability dollars” and to make themselves a leader in the field of disability services.
The writers submit that the existence of the NDIS and the funding for the reasonable and necessary support which will be available to individuals must be a prime consideration for this review. That is, the review has to look forward and take into account the new system for the provision of support to people with disabilities. It cannot be bogged down by how things are now in a system which was described by the Productivity Commission as “underfunded, unfair, fragmented, and inefficient.” http://www.pc.gov.au/__data/assets/pdf_file/0011/111404/disability-support-executive-summary.pdf
In terms of its current considerations, the review should have available to it at least the reality knowledge of what is taking place in both government-managed and non-government group homes in the Barwon area which is part of the trial/launch site for the NDIS, as well as arrangements for the movement to group homes of people living at the proclaimed residential institution, Colanda, in Colac. Also, it should have available to it financial input from accommodation providers in other regions.
Given the significance accommodation and support plays in the lives of not only persons with disabilities but also their families, the writers submit that it is essential that the review ensures total transparency and makes public costing information on which it bases any recommendations. They further submit that it is timely that the disability sector is more broadly open to transparency and accountability.
The writers also submit that account must be taken of NDIS funding for other disability related costs, such as transport, continence aids, and community inclusion activities.
PART B: THE THRESHOLD QUESTION - SHOULD THE GOVERNMENT HAVE A ROLE IN FEE-SETTING FOR DISABILITY RESIDENTIAL SERVICES?
The writers submit that there is a threshold question which must be considered before making any determination on specific issues associated with fees and charges. This threshold question is – Should the government have a role in fee setting for disability residential services?
This question is particularly aligned to two TORs which the review has to consider. These are, The role of Government in fee setting for services such as disability residential services and Pricing models including consideration of full cost recovery (excluding support) rather than subsidisation for rent and house-keeping.
In terms of this question, it is assumed that the fees and costs in question are for non-staffing costs associated with the provision of residential services.
In considering this, the writers have asked, “Why should or would the government have a role in fee setting for disability residential services?”
The main consideration is that the provision of a residential service means there is a contract between the individual and a service provider. There could be more than one contract if the provider of the “bricks and mortar” is not also the provider of support.
A significant matter which arises is whether or not the person seeking or already living in a residential service has the capacity to enter into a binding contract. The writers assume that unless a person has a legally appointed financial administrator or a guardian or is represented by a person holding their power of attorney, then the person with disabilities is able to enter into a contract. Consequently, the legal representative or the person with disabilities is able to access existing consumer and tenancy protections which are available to persons without disabilities.
The writers therefore argue that while the government has a role in consumer protection and tenancy laws which apply to all consumers and all tenants, no additional reasons exist as to why persons living in disability residential services should be separately regulated by way of fee-setting for the residential services. While it may well be there are some who may argue that additional protections ought be established for persons with disabilities, the writers submit that to do so ignores principles that now underpin the provision of services to people with disabilities.
Significant among these principles are the concepts of rights and responsibilities, as well as the concept of treating people with disabilities on an equal basis with others. In other words, it cannot be argued on the one hand that people with disabilities should have equal rights and then on the other hand seek to establish rules that treat them differently.
Given also the fact that the provision of disability services under the NDIS is based on a market model, the writers argue that the scope of services being provided and fee setting and fee payment are matters best left to the parties to the service contract. .
Recommendation
The writers therefore call upon the review to establish an unambiguous position stating that the government will not have a role to play in scoping services and setting fees and charges for group homes for persons with disabilities.
Should, however, the recommendation as noted above not be accepted, then they submit that a detailed explanation must be provided as to why the government should have a role in scoping services and fee setting. Further, precise detail must also be provided as to how this role would be exercised. The writers also submit that such detail must encompass how such a position does not compromise the rights of persons with disabilities.
PART C: OTHER CONSIDERATIONS REGARDING THE TERMS OF REFERENCE
While the writers are of the view that government does not have a role in fee setting in disability residential services, nonetheless they make the following comments as regarding matters raised by the Terms of Reference (TOR) for the review.
Subsidisation and pricing models
There are people living in Department of Human Services (DHS) managed residential services who appear to be subsidised by government, when considering the DHS current policy document - Scale of residential charges for residential services managed by the Department of Human Services - Effective 1 April 2014. (http://www.dhs.vic.gov.au/for-service-providers/disability/accommodation/supported-accommodation/accommodation-charges-department-managed-disability-residences)
Particularly, there are those whose rent only charge is $244.06 per month, which equates to $2,928.72 per year or $56.32 per week. Interestingly, a rent of $56 per week would not attract Commonwealth Rent Assistance. The writers submit that it is reasonable to conclude that a rent of $56 per week is likely to be subsidised, even in a residential location where property rental is relatively low. Certainly, on the basis of a 5-bedroom property, it seems reasonable to conclude that $280 per week is at the low end of the rental scale no matter where the house might be located. By way of illustration, a recent search on the real estate site domain.com for a 5 bedroom house in Victoria with a rent between $50 and $300 per week returned 27 properties for rent, the majority of these having one bathroom.
However, the matter of “subsidy” goes well beyond what a “market” rent might be. It involves identification of what is being subsidised. The writers submit that the review must give proper consideration to the cost elements which are purported to be subsidised – not just “rent” and “house-keeping” as defined in the DHS scale of charges. Subsidies can also apply to among other things vehicles, utilities, furnishing replacement, insurances.
It is pertinent to note that in the May 2007 Regulatory Impact Statement on the Disability Regulations 2007 the Department claimed a range of costs as part of the cost of accommodation support provision which was being subsidised. For the institutions, as well as costs related to direct care staff and management support, it claimed operational expenses included all client related consumables such as food, housekeeping, accommodation supplies, utilities, property rates and outgoings, transport costs, taxi fares and other administrative overheads and supplies etc. The Statement also noted that infrastructure costs included only repairs and maintenance and depreciation charges and that major capital expenditures were not included under recurrent costs.
The writers submit that any considerations associated with subsidising fees, whether government-managed or non-government, must be transparent to the degree that those services which are being subsidised are identified and the degree to which they are being subsidised, is made public.
Given that part of the review’s focus is on equity and fairness, then the writers argue that unless transparency does prevail there is no way of public scrutiny being applied to differentiate between the actual costs and the subsidised costs. The writers do note, however, that on the matter of fairness and equity it would be naïve to assume that such an assessment can be made on the basis of fees charged and fees paid only. Significantly, consideration would also need to be given to the quality of the facility, the location of the facility, as well as prevailing market rents in the area in which the facility is located.