Specialist Disability Accommodation Pricing Review 2022-23: Key OutcomesJun 20, 2023
Exciting news! Last Friday The National Disability Insurance Agency (NDIA) published results of the Specialist Disability Accommodation (SDA) Pricing Review, as part of the broader NDIS Annual Price Review. This article will delve into some of the details of the SDA pricing outcomes and their implications.
Process of the SDA Pricing Review:
In compliance with the SDA Pricing and Payments Framework, the NDIA initiated a comprehensive review of SDA prices, including the underlying assumptions used to determine them. The primary objective was to assess whether the existing pricing structure attracts sufficient investment to meet the projected demand for SDA and accommodate all eligible individuals. To conduct the review, the NDIA engaged Ernst and Young, along with other technical specialists, to provide independent research and analysis. The review considered 46 sector submissions and consulted over 100 organisations and individuals, providing comprehensive analysis and recommendations.
Let's dive into some of the exciting highlights.
Recognition of SDA's Value:
It seems like the government has finally caught on to the fact that high-quality SDA is a game-changer. The report emphasises that SDA is not just another expense but a crucial support that contributes to the long-term sustainability of the Scheme. By reducing lifetime support costs, SDA plays a vital role in making the Scheme more sustainable. It's not just about the dollars; SDA also helps tackle hospital bed blockage and enables younger people with disabilities to move out of residential aged care. This recognition of SDA as an investment in the Scheme's sustainability is a major step forward.
Hold on to your hats because there's some good news on the pricing front (if you're an SDA provider!) The review has resulted in significant price increases across most SDA categories. We're talking about some specific examples doubling compared to previous pricing. Improved liveability (IL) and Robust design category dwellings, as well as 2 and 3 resident houses across all design categories, have seen some substantial price hikes. Existing and legacy stock pricing has gone up by 7% while the average increase for all new builds is around 18.5% in nominal terms or 11.5% in real terms. If you want all the nitty-gritty details, check out Exhibit 28 on page 44 of the report. And if you're into spreadsheets, there are detailed new build price tables in Appendix A too!
Changes in SDA Pricing Determination:
Let's be honest, one slight downside is that figuring out the right SDA price for each dwelling has just become a bit trickier. Starting from July 1, 2023, SDA prices will take into account the Goods and Services Tax (GST) position of each dwelling's delivery. The idea is that if the owner of the dwelling claimed GST input tax credits for the GST paid on the purchase price or construction costs, well, that will affect the pricing. The NDIA have acknowledged they've made this part more complicated, it will be one area to watch as the changes are implemented, given the NDIA have historically found administering their funding systems and changes difficult.
Other Changes and Positive Developments:
The review report highlights several other noteworthy changes, including:
- Critically important improved coverage of fire sprinkler costs, with a recommendation to consider a mandate (this is one we are 150% behind).
- Support for the idea of SDA self-provision, we are hoping to see changes that make self providing far less onerous and expensive compared to the current situation.
- Increased pricing for 4-5 bedroom group homes, along with a not so subtle warning that these are no longer considered contemporary housing for people with disabilities and should be phased out in time
- Encouragement for the NDIA to consider sustainable development practices in the SDA context, including the installation of solar panels and batteries in new SDA dwellings. This one gets a big vote from us, with the ability to substantially reduce the daily cost of power for participants living in SDA something very worth investing in
- Innovation: Provision of additional funding for bespoke SDA projects that do not fit within the existing price matrix or design standard.
It's all very fresh but I think it is fair to say that the outcomes of the SDA Pricing Review have on the whole met (or exceeded) the expectations of many stakeholders, establishing a solid foundation for a sustainable and appealing SDA market. The increased prices reflect the value and importance of quality SDA, benefiting NDIS participants (and the NDIA) in the long run.