The document provides an overview of a consultation meeting to discuss the Specialist Disability Accommodation Pricing and Payments Framework. The agenda includes providing background on the framework, discussing eligible participants, housing providers and models, financing and pricing approaches, and a workshop for stakeholders to provide feedback. Key points covered are the principles of choice, inclusion and innovation, transitioning existing housing stock, benchmark pricing formulas, and next steps in developing and implementing the framework.

1. 1Footer4/27/2016
Open consultations
January 2016
Specialist Disability
Accommodation Pricing and
Payments Framework

2. Purpose of today
1. Provide an overview of the Specialist Disability Accommodation
Framework
2. Answer questions to clarify the purpose and intent of the
Framework
3. Provide an opportunity for all stakeholders to provide input
4. To discuss ‘top of mind’ concerns and considerations
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3. Today’s agenda
1. Background and context
2. Participants
3. Housing providers and choice
4. Financing and mechanics
Morning tea at 11:20- 11:45 (25 minutes)
5. Workshop on the Framework
– Discuss the Framework and provide your feedback
Close at 1 pm
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4. 1. BACKGROUND AND
CONTEXT
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5. Authorising environment
• Convention on the Rights of Persons with Disabilities 2006
• National Disability Strategy 2010 – 2020
• National Disability Insurance Scheme Act (2013)
– National Disability Insurance Scheme Rules (2013)
– Specialist Disability Accommodation Pricing and Payments Framework
– Responsibility for the implementation of the Framework
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6. Purpose/ objectives of the SDA Pricing and Payment
Framework
• To set out an initial pricing and payments framework for the funding
of the land and built elements of SDA
• Ensure there’s scope for growth, replacement, change and
innovation in supply
• Not intended to cover:
– broader aspect of policy in respect of SDA
– support arrangements delivered in SDA
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7. SDA Pricing and Payment Framework project scope
• The SDA Pricing and Payment Framework project will:
– Consult widely and seek feedback on the Framework
– Establish a pricing model and initial benchmark costs for SDA
– Test the implementability of the model with stakeholders
• Outside the scope of this project:
– Pricing for support services other than housing (acknowledging
impact of integrated service models)
– Accommodation other than SDA (e.g. social or market provision)
– Home modifications to existing properties (covered through other
NDIS funding)
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8. Principles informing SDA pricing
• Inclusion: To assist participants to have the same housing opportunities, choices
and responsibilities as the broader community through stimulating market supply
• Rights, choice and control: To allow participants their choice of providers of
housing and of support services, and the way in which they will be provided
• Efficiency in outcomes: Best whole-of-life outcomes with efficient whole-of-package
costs, to support the most people possible
• Continuity: Provide an orderly and managed transition from historic accommodation
options and service models to approaches that support independence and social and
economic participation
• Innovation: To encourage innovation and investment in new Specialist Disability
Accommodation
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9. 9
Innovation

10. 1. Participants
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11. For whom in what circumstances
• Participants currently residing in SDA
• Group homes, large residential centres, cluster or village
accommodation
• Those in innovative accommodation models intended for people with a
need for SDA
• Those not residing in SDA - participants residing in residential aged
care (where primary need is disability related), or in inappropriate
settings (e.g. living with elderly parents who are at risk of not being
able to cope).
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12. Priorities for SDA pricing
• Participants currently residing in SDA
– Who wish to stay there
– Who wish to explore other options to change their
accommodation
• Young people residing in aged care
• Over time; participants who are not currently residing in SDA but for
whom SDA would be considered ‘reasonable and necessary’
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13. For whom in what circumstances 2
• SDA does not apply to all housing for people with disability, or for all
people with disability
• The Agency will determine the participants for whom specialist
disability accommodation is reasonable and necessary with
reference to two groups;
– Participants requiring a specialist built form.
– Participants whose support needs can only be met cost
effectively by SDA.
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14. Participants requiring a specialist built form
• Where the impact of their disability, and functional impairment
requires accommodation with:
– Specific design features or;
– Amenity which is not readily supplied through mainstream
housing market
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15. Participants whose support needs can only
be met cost effectively by SDA
• High level of complexity or cost in support required
• Need to minimise risk
• Capacity and capability of informal supports
• Capacity and capability of the participant
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16. 2. Housing providers and choice
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17. Existing supply of SDA
• Existing stock of SDA is essential to ensuring supply, this includes:
– Group homes
– Large residential facilities (phasing out)
– Smaller innovative models
• Key priority is to transition existing stock into the NDIS to allow
continuity
• Also to ensure scope for replacement, change and innovation over time
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18. Housing Forms
• Large residential facility (low choice, low independence, low inclusion)
• Large group homes (6+) (low choice, low independence, onsite support,
meets continuity needs where utilised, higher tenancy management/
vacancy costs )
• Group homes (4-6) (can be associated with - limited choice, limited
independence, lower social inclusion, lower building and shared support
service costs, high continuity/ supply, higher tenancy management/
vacancy costs)
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19. Housing Forms continued
• Independent living (high choice, high independence, cost can be
prohibitive if high support needs, requires innovation in service
models)
• Villa/ cluster/ town house (higher choice, higher independence, low-
high social inclusion, shared costs, low current supply)
• ‘Salt and pepper’ accommodation (high independence, shared
support costs through on site or mobile support services, high
integration, low current supply)
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21. Market based approach
• The intent is to stimulate a supply market which is responsive to the
needs and choices of people with disability, to encourage
– Innovation (increased independence, choice, inclusion)
– Increased supply
• This is facilitated by pricing which enables participants to stimulate
the market through purchasing power and choice, and which is
efficient enough to provide to as many people as possible
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22. Challenges
• Substantial capital investments create returns over the long term
(not responsive to short-run changes)
• The market may not quickly respond, and may require market
incentives
• Benchmark pricing requires simplifying assumptions, cannot be
bespoke for all circumstances
• Need to reduce regulatory and administrative burden but ensure
adequate quality and safeguards
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23. Challenges continued
• In a number of locations there are serious shortages of
affordable accommodation which may impact
disproportionately on NDIS participants
• The NDIS will not replace the existing effort in the social
and community housing sectors which have primary
responsibility for addressing the housing needs of those
on low incomes.
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24. 24
Estimates (Productivity
Commission and NDIA
Actuary)

25. 3. Financing and pricing
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26. Benchmark price formula
as described by the Framework
Dwelling price
= Consumption costs
Asset value / life (depreciation)
+ Opportunity costs of capital
Asset value x Cost of debt and equity
+ Costs of ownership
Operating costs
- Land price inflation
Benefit from change in land value
- Participant contributions
Typically 25% of DSP, plus CRA
Key Elements
Loss in value of the building over time
Return to investors and interest payments
Money spent to maintain, insure, manage
Increases in land value over time
Reasonable rent contributions from income
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27. Benchmark price =
Dwelling price / Anticipated number of dwelling residents
Note: Vacancy risk is a critical issue to be addressed in the pricing model. Currently,
the Framework specifies only that:
30. The Agency will determine how occupancy rates will be factored into the
benchmark prices.
Benchmark price formula
as described by the Framework continued
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28. Factors
The benchmark prices will have factors or weights including for:
• Geographical location
• Number of bedrooms
• Whether the dwelling is furnished or unfurnished
• Specific building/dwelling features
• Price inflation
• Other factors the Agency determines to be necessary
• Remoteness
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29. Frequently asked questions
• “Cashing out”, co-contributions and shared
equity
• Tenancy rights
• How will vacancies be managed
• Frequency and timeframe of payments
• Treatment of land
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30. WORKSHOP SESSION
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31. Workshop format
To help group people with potentially similar interests and issues, we
ask you to now to please move to one of the three designated tables:
• Participants/families/carers
• Service providers
• Housing Associations/ Financiers/investors/government and others
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32. Workshop process
Now, in your groups, please identify which elements of the Pricing and
Payment Framework:
1. you support
2. you have concerns about, and any proposed solutions
3. transitional issues
Comments should relate specifically to elements of the Framework.
We suggest that you limit these to no more than 5 key issues each, but
more will be accepted.
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33. Workshop process continued
• You may either provide a response as a group or as a private
individual on the response sheets provided in front of you.
• Submissions can also be provided later. Written feedback can be
provided up until the end of February. All comments will be
considered.
• Responses underpinned by evidence and demonstrated examples
would be preferred.
• Where appropriate, the NDIA will provide a formal response. All
responses will be published on our website.
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34. Some of our thoughts about issues and
challenges
• Legacy issues: How do we address legacy issues while encouraging
innovative new accommodation options?
• Universality of prices: How do we develop benchmark prices, but still
differentiate on the basis of condition and features of individual properties?
• Outcomes and efficiency: How do we encourage innovation and better
outcomes for participants, taking into account whole-of-life cost efficiency?
• Choice: Can we cater for participants that would prefer to develop non-standard
options? Should participants be able to “cash out”?
• Separating service providers: How do we enable the separation of
accommodation providers from service providers and ensure the security and
rights of tenants?
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35. More issues and challenges
• Needs other than specialist built form: Will the pricing framework be able to
account for people with acute need but without a clear requirement for specialist
built form?
• Financier requirements: What terms and conditions are required to attract
financing and ongoing investment?
• Windfall gains: How and when should we protect against windfall gains, and
what conditions should be attached to SDA funding?
• Equity arrangements: Should we structure prices to apply equally to rental,
ownership or shared equity arrangements?
• Group homes: Should funding continue to support the development of new
group homes, or are they a transitionary ‘step down’?
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36. What to expect and what’s next
JULY 1 2016
– Reasonable benchmark pricing (focus on pricing to ensure continuity
through transition)
• Not excluding innovative models
– Explicitly expand and apply pricing to new and innovative models
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37. Reminder of the key elements of the Framework
• Participants
– Eligibility (existing residents, “reasonable and necessary” requirements for new residents)
– Funding is portable and attached to participants
– Support for individual choice, control and certainty
• Housing providers and choice
– Housing and support to be separated
– Benchmark prices to be based on an efficient, representative provider
– Support for innovative arrangements
• Financing and pricing
– Benchmark pricing formula
– Additive/multiplicative factors (location, bedrooms, furnishing, specific features)
– Treatment of state owned land
• Other considerations
– Registration of approved dwellings
– Quality and safeguards
– Provision for alternative payment arrangements
– Transition of non-NDIA residents to SDA
– Timing of reviews 37

38. Next steps
When What
Now - 22 Jan Targeted consultations on Framework
Late Jan – Feb Public consultations on Framework
(today)
Mid Feb Innovative housing showcase
31 March Benchmark prices developed
– Targeted consultation on points of clarification
– Options testing
May Publish benchmark prices
1 July NDIS full scheme commences
Where/who
States/Territories, peak bodies,
researchers
In each State and Territory
Open invitation sessions for
anyone expressing interest
NSW
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39. Thank You
If you would like more information, please see our website:
www.ndis.gov.au
If you would like to provide more information, please email your feedback to us
before 29 February 2016 at:
sdahousing@ndis.gov.au
If have any further questions, please contact:
• Minni Saxena, Director Housing, Market and Providers Division, NDIA,
padmini.saxena@ndis.gov.au
• Phil Pickering, Senior Associate, Marsden Jacob Associates,
ppickering@marsdenjacob.com.au
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