MHA-MIFA Letter to MinisterSocialServices re NDIS 9Jun2016

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Mental Health Australia - MHA  Mental Illness Fellowship Australia MIFA

The Hon. Christian Porter MP
Minister for Social Services

PO Box 6022
House of Representatives
Parliament House
Canberra ACT 2600

9 June 2016

Dear Minister,

Statement of the problem

The National Disability Insurance Scheme (NDIS) has been funded in part by moving existing mental health programmes into the scheme.

Evidence is now emerging the assumptions that underpinned these funding decisions were not accurate.

On current projections, this will result in a surplus of funds within the NDIS, and a shortage of programmes and services for those people who will remain outside the NDIS.

Proposed solution

We write to ask you to cease the transition of important mental health programmes into the NDIS.

Ceasing the transition now will preserve important services to vulnerable Australians and their families that are currently being dismantled.

Productivity Commission Estimates

In 2012, the Productivity Commission recommended that people with severe and persistent mental illness and associated complex disabilities should be included in the NDIS. At the time, the Productivity Commission estimated that there would be approximately 57,000 people who would meet this criteria. We have no doubt this was the right decision. Australia has never been able to guarantee the level of disability supports these people and their families need and we want to assist the NDIA to stay on target to reach and support them during the next few years.

It now seems evident, however, that the quantum of funds estimated as required for these psychosocial supports was around $1.8 billion per annum, based on an average package cost of about $32,000. We now know the actual take-up of supports by participants in trial sites has consistently averaged around $21,000 per annum.

If this take-up rate continues as expected, the estimate of $1.8 billion on which bilateral agreements were based will be considerably more than the NDIS requires to support those 57,000 people, in the order of hundreds of millions of dollars.

Australian Government Actuary view

To further compound this miscalculation, a significant proportion of that $1.8 billion has been achieved by ‘transitioning’ existing programmes from all jurisdictions on the erroneous assumption that those programmes mainly supported people who would get an NDIS package as a replacement. As early as 2012, the Australian Government Actuary (AGA) warned about the problems associated with this assumption.

Our discussions with the mental health experts made it clear that if the NDIS were to be restricted to the group with complex needs [the 57,000], there would be considerable demand for the services provided by this sector from the residual 100,000 individuals with severe and persistent mental illness who are able to manage their own access.

The AGA estimates indicate that if too many programmes are rolled into the NDIS, there is a real risk of people missing out on services.

While there is still no consistent picture of how the NDIA will define eligibility, there is widespread agreement in the mental health sector that the majority of current participants in mental health programmes due to transition are not in the target group as defined by the Productivity Commission. The Department of Social Services has previously advised that in Barwon, only 50 per cent of PHAMS clients transitioned into the scheme. Our own estimates suggest that figure could be as low as 25%-30%. This outcome has been anticipated by the sector for several years now.

As Mental Health Australia indicated in a comprehensive analysis more than a year ago, (attached) if these complex questions of policy and funding are not resolved quickly, service access will be reduced for thousands of people with severe mental illness. These people have fallen through the gaps for too long. We now know that the best way to address this is to maintain programmes like PHAMS, PIR, MHR:CS and Day to Day Living outside the NDIS, to provide services to those people who do not meet NDIS eligibility criteria.

Why is this urgent?

Many contracts reflecting this transition have only been released in recent weeks, with some still due for negotiation prior to June 30 2016. This recent development has amplified the stress and disruption for individuals, families, staff and providers affected by transitioning processes spreading across all jurisdictions. This disruption now appears to be completely unnecessary in the foreseeable future. The $1.8 billion already committed appears to be sufficient to achieve the goals of the scheme and maintain most or all of the Commonwealth, State and Territory programmes now threatened. It also allows for serious re-consideration of the current pricing structures, which make modern mental health recovery practices unsustainable in the NDIS.

We ask that you ensure the work being done by the NDIA to support the agreed psychosocial disability target group continues on schedule. But we also ask that current plans to ‘roll in’ programmes which wholly or partly serve target groups ineligible for the NDIS are immediately put on extended hold, while the full implications for individuals and families both inside and outside the scheme are assessed. This is consistent with the recommendations made in the National Mental Health Commission’s report, which recommended:

Do not cash out existing mental health and other associated programmes (e.g. carer and respite programmes) into the NDIS until there is evidence as to eligibility for people with a psychosocial disability, and clarity about ongoing support for those who are eligible for Tier 2 support.

We remain deeply committed to the successful roll out of the NDIS, including support for people who experience psychosocial disability.

We do fear, however, that unless government acts quickly on the emerging evidence we risk dismantling services and programmes that will be essential for the hundreds of thousands of Australians who experience mental illness but will remain outside the NDIS.

We would be pleased to discuss these issues further.


Jennifer Westacott
Mental Health Australia


Mick Reid
Mental Illness Fellowship Australia

Bruce Bonyhady
David Bowen