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A peak industry body fears that National Disability Insurance Scheme (NDIS) service providers are facing increasingly bleak financial outlooks, with not-for-profit organisations appearing to be at greatest risk.
Key points:
- Anglicare Tasmania's decision to exit NDIS services highlights the pressure on not-for-profits in the sector
- NDIS providers' financial viability has been increasingly at risk in recent years
- There are hopes a Commonwealth review of the NDIS will solve structural problems facing providers
On Wednesday, Anglicare Tasmania announced it was withdrawing from NDIS service provision, transferring its support coordination and supported independent living clients to genU by the end of March.
Anglicare cited its concerns over NDIS pricing and infrastructure requirements, and that it had "subsidised" the delivery of these services.
The organisation will also be selling two of its office sites in Hobart and Launceston as part of the restructure.
National Disability Services (NDS) has highlighted the financial viability challenges facing NDIS service providers.
A survey last year found the proportion of providers making a profit fell from 68 per cent to 46 per cent in 2021/22, with not-for-profits worst affected.
NDS chief executive officer Laurie Leigh said financial viability concerns had been foreshadowed for several years, prompting tough decisions by providers.
"If you look at the operating conditions for providers at the moment, they're really not good," she said.
"Providers are having to make very difficult decisions about what services they are able to continue or not into the future.
"Over this next 12 months – the current financial year – we've got some really clear indications from organisations that they're expecting to make increasing amounts of losses.
"I am definitely worried about the sector at the moment."
Planning processes 'lead to fragmented services'
The NDS has continued to raise concerns around a range of structural issues in the NDIS, including increasing costs for insurance, safeguarding compliance, administration and planning, and perceived problems with the disability support worker cost model.
Ms Leigh said the supported independent living model — which Anglicare Tasmania was exiting — also had challenges, including cuts to packages.
"The planning processes are very individualised and lead to a quite fragmented service within a group home setting, or a setting where people are living together," she said.
"A participant might have been assessed as needing 'awake at night' — somebody to be there overnight — but because they're in a three-person house, their package is only supported for a third of that overnight awake cost.
"As long as the other two participants in that house also have a waking night, everything runs smoothly. But if their plan is changed and they no longer need support overnight, then the provider is left having to provide support overnight for the two participants who still need that, with only two-thirds of the funding there."
The Health and Community Services Union raised concerns about the further condensing of services in Tasmania into the hands of fewer, larger providers, or "super organisations".
But the NDS was less concerned by this, believing such organisations had greater capacity to spread out its cost burden more effectively, and be more viable.
Review due by end of October
NDIS Minister Bill Shorten last year announced a review of the scheme, to be co-chaired by Bruce Bonyhady AM and Lisa Paul AO, with a report due by the end of October.