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The Way Forward – A New Disability Policy Framework For Australia

Executive Summary

In April 2008, the Parliamentary Secretary for Disabilities and Children’s Services, the Hon Bill Shorten MP, established the Disability Investment Group (DIG). The Group’s role was to explore innovative funding ideas from the private sector that will help people with disability and their families access greater support and plan for the future. The Group’s Terms of Reference and Membership are at Appendix A.

The DIG’s focus on the idea of investment rather than on the more traditional notion of welfare has generated some practical ideas for policy direction and development—The Way Forward—that could transform the experience of disability in Australia.

While the DIG was conducting its review, the Australian Government undertook a number of initiatives to bolster the current systems for supporting Australians with disability. The measures include signing the UN Convention on the Rights of Persons with Disabilities, increasing the Disability Support Pension and Carer Payment in the 2009-10 Budget and allocating increased funding under the National Disability Agreement over the next five years.

More recently, the Consultation Report from the National Disability Strategy—SHUT OUT—which was prepared by the National People with Disabilities and Carer Council, was released by the Commonwealth Government. Its conclusions are based on 750 submissions and the feedback from the 2,500 people who attended the public consultations, and highlights that many people with disability feel excluded from an ordinary life.

Its conclusions are consistent with the findings of the DIG that current policy settings of all governments are leaving multiple barriers for too many people with disability and their families, notwithstanding recent increase in government funding. These barriers are less to do with particular impairments and more to do with the lack of guaranteed access to customised plans of timely support and development.

DIG members consulted with a range of individuals and organisations who offered ideas to create incentives for private investment in disability. The strong theme of these discussions was the vital need to introduce certainty and confidence into the lives of people with disability and their families. The ability to plan for a life and a future underpins the aspirations of all Australians.

The DIG’s principal recommendation is that the Commonwealth Government, in consultation with States and Territories, should immediately commission a comprehensive feasibility study on a National Disability Insurance Scheme (NDIS). The DIG believes that further analysis is necessary because, while a NDIS would be transformational, some of the transition and other issues associated with its introduction would be complex.

The scheme would revolutionise support for people with disability. It would be person-centred, have a genuine whole-of-life focus and maximise independence and participation. It could transform a well-meaning but fragmented welfare model into an innovative, social insurance scheme achieving better outcomes through need management and service efficiency.

The feasibility study should examine the longer-term cost implications, noting that within a generation, the costs are likely to stabilise at less than projected costs of the current system.

There is a compelling case to not only achieve long overdue equity for people with disability, but also to provide security in the event of severe or profound disability for all Australians and establish long-term sustainability of the disability support system.

Drawbacks of the current system

Australia has a robust social security system which entitles all citizens to health services and income support based on individual needs and circumstances. However, while Australians with disability are entitled to these universal services, there is no equivalent entitlement to disability care and support services.

The Australian system of formal support is failing many people with disability, their families and carers. There are high levels of unmet need for disability services impacting heavily on people with disability but also on their families and informal carers. Families are usually more than willing to care for family members with disability when they are able to do so. However, without support and assistance families can ‘burn out’ with higher ultimate costs to governments.

While all levels of government have increased funding for disability services in recent years, no government has committed to meeting all the essential needs of people with disability. Governments fund a range of services, but people with disability and their families have no certainty and no guaranteed access to a system of core support. The reliance on informal carers has enabled the effective rationing of resources to those in or on the verge of crisis.

A major drawback of the current disability services system is that the client is not at its centre. While moves to more individualised packages of care are welcome, there is little opportunity for life course planning for individuals, which involves their families, helps them meet their aspirations, and prepares them for key transitions.

The current system is under considerable stress and marginal change or add-on services will only lock in models that will continue to fail to meet the needs of people with disability, their families and carers. Traditional program responses can do little to ease the pressure of rising costs of services to government and they do not provide value for money in improved outcomes for clients.

A more robust governance structure and evidence base is needed to help guide effective and integrated planning and service delivery, and to re-evaluate outcomes. Currently, there is limited and uneven data collection and monitoring capacity.

Emerging pressures

Looking ahead, Australia’s ageing population will increasingly stretch the existing system, given the strong correlation between age and disability. This means that over the next decades there will be a steady increase in the number of people with a severe or profound disability. For the next 70 years, the projected growth rate in the population with severe and profound disability is between two and three times the population growth rate as a whole.

While the number of people with disability continues to grow, the availability of informal care is contracting. Fewer people take on informal caring roles because of a range of factors including increasing workforce participation by women and decreasing core family size. The impact of these trends on the disability services system will be significant. Because non-paid care provides for more support than paid care, a 10 per cent reduction in providing informal care translates into a 40 per cent increase in the need for funded services.1 Already we are seeing that ageing carers find it difficult to continue to care and many now need assistance themselves.

A transformational shift

The DIG has concluded that a transformational shift in policy approach and service delivery is needed. It is now time to rethink and restructure the basis of disability policy in Australia. The group recommends a three pillar policy to support people with disability, similar to the structure for retirement incomes.

The proposed new policy framework focuses on government and private investment to assist people with disability to manage their own lives and maximise their independence and contribution to the community.

The welfare model of disability services needs to be replaced with a new three pillar policy to support people with disability. The three pillars are:

The key to this transformational shift would be the introduction of a National Disability Insurance Scheme which would provide people with severe or profound disability with an individualised and lifetime approach to care and support.

The scheme would replace the current arrangements for funding disability services and would work in a similar way as the no-fault injury insurance schemes that currently operate in some States and Territories. Coordinated services would provide care and support including aids, equipment, transport, respite, accommodation support and a range of community and day programs.

A proposed model of the scheme is summarised on the next page outlined in more detail in Part 3.

With full actuarial accounting of the lifetime costs for each individual, a NDIS would mean more effective and timely investments and interventions. The scheme would also help individuals to maximise their potential and provide opportunities to reduce long-term care and support costs.

The Australia 2020 Summit early in 2008 recommended such a scheme. Three other recent reports have also advocated further investigation of schemes along the lines of a NDIS: the Pension Review Report; the House of Representatives Standing Committee on Family, Community, Housing and Youth Report: Who Cares? – Report on the inquiry into better support for carers; and the National Disability Strategy Consultation Report SHUT OUT: The Experience of People with Disabilities and their Families in Australia.

Such a scheme is not beyond Australia’s capacity to deliver. In fact the DIG believes that ultimately a NDIS would be a net saving on government expenditure through a more effective service system and better employment, health and social outcomes for people with disability.

Increased expenditure would be necessary to address currently unmet need for care and support, estimated at $0.97 billion in the first year and $2.04 billion in the second year. However, because of the more active management and support model, sizeable offsets will be available from Disability Support Pension (DSP), Carer Payment, health, aged care and other social programs.

Additional offsets are also likely, as the introduction of a core NDIS would also enable a range of innovative private investment opportunities to emerge. With a certain and reliable stream of ongoing essential care and support, individuals and families would be encouraged to make additional private provision for the future in areas such as housing, in the same way as compulsory superannuation has encouraged additional private contributions to retirement savings.

As the second and third pillars (income support and measures to enable increased private contributions) are part of the tax transfer system, they should be considered in the context of the current Review into Australia’s Future Tax System.

A NDIS should be complemented by nationally consistent state-based insurance schemes covering motor accident, workers’ compensation, public liability (general injuries) and treatment injury. To ensure a comprehensive and equitable national approach, the Commonwealth, States and Territories should work together to consider how the various insurance schemes that provide lifetime care and support for traumatically injured Australians can become no-fault and nationally consistent with the proposed new scheme.

Other improvements to services and support

Three more DIG recommendations are designed to help improve other aspects of services and support for people with disability, their families and carers. These are:

  1. PricewaterhouseCoopers (PwC) 2008, National Disability Insurance Scheme Final Report, p.1.

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