• Table of Contents
• Disability Investment Group
• Executive Summary
• National Disability Insurance Scheme (NDIS) – A Possible Model
• Principal Recommendation
• Summary of Other Recommendations
• Section I
• Part 1: Experience of Disability in Australia
• Part 2: Need for Change
• Section II
• Part 3: Establishing a New National Disability Insurance Scheme
• Part 4: Ensuring Income Support is Adequate
• Part 5: Improving savings and taxation incentives for privately - funded services
• Section III
• Part 6: Providing More Housing for People with Disability
• Part 7: Offering Better Employment Opportunities
• Part 8: Building Research and Best Practice
• Appendices
• Appendix A
• Appendix B
• Appendix C
• Appendix D
• Appendix E
• Appendix F
• Appendix G
• Appendix H
• Appendix I
• Appendix J

The Way Forward – A New Disability Policy Framework For Australia

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Appendix H: Letter from Chairman, Disability Investment Group to the Department of Families, Housing, Community Services and Indigenous Affairs in response to the National Rental Affordability Scheme - Technical discussion paper, 29 May 2008

29 May, 2008

 

Section Manager
National Rental Affordability Scheme
Department of Families, Housing, Community Services and Indigenous Affairs
PO Box 7576
Canberra Business Centre ACT 2610

 

Dear Sir/Madam

I refer to the National Rental Affordability Scheme - technical discussion paper, which seeks comments from interested parties by 31 May 2008.

I am writing on behalf of the Disability Investment Group (DIG) which was established by the Parliamentary Secretary for Disabilities and Children’s Services, the Hon Bill Shorten MP, on 23 April, 2008.

The Group’s Terms of Reference include a requirement to “explore government assistance to encourage family and private investment in the provision of housing … for people with disability”.

In addressing its Terms of Reference, the DIG is seeking to leverage other Government policy initiatives as much as possible, so that they meet the needs of people with disabilities.

DIG therefore welcomes the announcement of the National Rental Affordability Scheme with its intention to expand institutional investment in new affordable rental housing, including people with disabilities.

Access to secure, suitable housing in not just a basic human need, but is central to a person’s participation in the community, whether through social connection and engagement, employment or personal well-being.

People with disabilities are around three times more likely to occupy public housing than are people without a disability. According to the Australian Institute of Health and Welfare the proportion of public housing occupied by people with disabilities in Victoria had risen from just over 20 per cent in 2001-02 to almost 40 per cent in 2005-06. There is little to suggest that this pattern would be significantly different in other jurisdictions.

It is a therefore a matter of some concern then, that over the same period, the supply of public housing has decreased across Australia and so the DIG strongly welcomes the proposal to establish a NRAS.

However it also strongly believes that the proposed Scheme needs to be modified in three critical areas to ensure that people with disabilities are not excluded from those that will be supported by NRAS.

1. Level and Structure of Incentives

DIG believes that with the proposed level of NRAS subsidy it will be only marginally viable for private sector investors to participate in the Scheme.

Given the additional costs experienced both in the establishment of disability accessible or adaptable accommodation and the higher ongoing costs of managing tenancies involving people with disability or mental illness, DIG is concerned that applying the standard level of incentive to housing for people with disability or mental illness will not attract any additional investment into appropriate housing for these clients.

Therefore, DIG expects that NRAS as currently designed would have the, presumably unintended, consequence of depriving disabled people from sharing in the benefits available under the Scheme. Consistent with the Government's social policy objective of improving the housing and other circumstances of people with disabilities it is important that the Scheme be modified to reflect the higher costs of housing people with disabilities.

If this does not occur NRAS will in effect discriminate against people with disabilities because investors and providers of housing will make the "rational" economic decision not to invest in housing for those with disabilities because their economic return will be lower.

DIG therefore recommends that the Scheme should be amended by increasing the payment made in relation to housing for people with disabilities to recognise the higher costs of providing and servicing their housing.

The additional subsidy could be structured in different ways and in the short time since the Technical Discussion Paper was issued DIG has not been able to undertake this analysis. One approach would be to set an additional level of subsidy in return for a guaranteed minimum number of people with disabilities to be housed on a project by project basis.

In order to ascertain the required subsidy, DIG also recommends that some detailed modelling be undertaken on both the level and structure of the subsidy and DIG would like to work closely with you on the development of further financial models, to ensure that housing for people with disabilities moves from the margin to the mainstream.

DIG would also draw attention to the broader cost to government of failure to provide sufficient suitable and affordable accommodation to people with disability or mental illness. It is widely acknowledged that once people with disability or mental illness become disengaged from secure housing, their risks of requiring higher intensity levels of government assistance (including acute health interventions and imprisonment) increase significantly.

Therefore, while the recommendation from DIG to increase the NRAS subsidy for people with a disability will add to the costs of the Scheme, it will certainly reduce government outlays in other areas.

2. Adaptable and Accessible Housing Standards

DIG notes the target of 50,000 affordable rental dwellings by 2012 and short timetable for expressions of interest and lodgement of tenders.

There is therefore likely to be a trade-off in the short run between meeting the volume targets and adaptability/accessibility standards given that much of the new housing stock being built today is not properly accessible.

Given the ageing of the population, people acquiring disabilities as they age and the social and economic benefits of people ageing in place, it is vital that the new housing stock that is built through NRAS is accessible.

DIG therefore recommends that NRAS should set clear adaptability/accessibility standards and only projects that meet these standards should receive a subsidy through NRAS, especially in the later years of the Scheme.

3. Income Threshold for Eligibility/Effective Tax Rates

DIG notes that the will be modelled on eligibility for Commonwealth Rent Assistance (CRA) or eligibility for the low income Health Care Card (HCC).

Currently, the Australian Government is considering a range of policy options to encourage greater workforce participation by people with disability and mental illness, because the participation rate for this group is much lower than the national average and the unemployment rate is much higher.

DIG has also been asked to consider barriers to the employment of people with disability as one of its Terms of Reference.

DIG would recommend some further consideration of the eligibility provisions for tenancy under the Scheme, with particular reference to people with disability and mental illness who have been successful in obtaining and retaining employment. Otherwise this group will face even higher effective marginal tax rates if they enter the workforce and so NRAS may unintentionally act as a further barrier to the employment of people with disabilities.

Summary of recommendations

DIG makes the following recommendations in response to the technical discussion paper:

1. DIG recommends that the Scheme should be amended by increasing the payment made in relation to housing for people with disabilities to recognise the higher costs of providing and servicing their housing.
2. In order to ascertain the required subsidy, DIG recommends that some detailed modelling be undertaken on both the level and structure of the subsidy and DIG would like to work closely with you on the development of further financial models, to ensure that housing for people with disabilities moves from the margin to the mainstream.
3. DIG recommends that NRAS should set clear adaptability/accessibility standards and only projects that meet these standards should receive a subsidy through NRAS, especially in the later years of the Scheme.
4. DIG recommends some further consideration of the eligibility provisions for tenancy under the Scheme, with particular reference to people with disability and mental illness who have been successful in obtaining and retaining employment. Otherwise this group will face even higher effective marginal tax rates if they enter the workforce and so NRAS may unintentionally act as a further barrier to the employment of people with disabilities.

Conclusion

DIG welcomes the opportunity to provide comments on the technical discussion paper on the National Rental Affordability Scheme and would welcome further engagement with FaHCSIA in the further development of the Scheme, as it applies to people with disabilities, including mental illness.

Yours sincerely,

Ian Silk

Chairman

Disability Investment Group

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