ADHC funding variations for NDIS transition
During transition to the National Disability Insurance Scheme (NDIS), Ageing, Disability and Home Care (ADHC) will be making variations to service providers’ funding for specialist disability services.
As people transition to the NDIS and receive funding according to their plan, ADHC’s funding to service providers will reduce. Variations to funding are made under Clauses 3(b) and 10.1 of the Funding Agreement for Disability Service Providers.
What does this mean for service providers?
Providers need to understand how payments from ADHC will reduce during the transition period in order to manage their businesses. The most immediate impact for providers will be on cash flows.
Once people have transitioned to the NDIS, service providers will need to manage incoming payments from the NDIA against the reducing payments from ADHC.
Planned Payments Schedule
All providers should have received a Planned Payments Schedule showing the amount of funding ADHC is currently committed to paying during the 2016/17 financial year.
For year 1 providers the Schedule shows how much funding is being reduced as a result of the funding variations made by ADHC. A more detailed explanation about payments is printed on the reverse side of the Schedule.
Providers should use the Descriptions of Services (DofS) and cohorts list, included with the Schedule, to understand how the cohorts have been defined and how services have been grouped into transition years.
Changes to the Planned Payments Schedule
Changes to the Planned Payment Schedule (and by extension the funding variations) will not be made unless they relate to the following:
• Services being listed in the incorrect cohort.
• Services being listed in the incorrect transition year or crossing over transition years.
Providers must advise ADHC on the contact details below by 10 June 2016 if the above changes are required to update the Planned Payment Schedule.
Calculating payment reductions
NSW has reached an agreement with the National Disability Insurance Agency (NDIA) on the number of people who will transition to the NDIS, how and when this will happen. This has then informed how ADHC will vary funding paid to service providers.
People have been grouped into three cohorts defined by the services they receive. Each cohort is expected to transition to the NDIS at different rates. The rate in which people are expected to transition determines the funding variation rate.
The following information shows how this has been determined.
MDS Service Type: 1.01, 1.02, 1.04, 1.03, 1.05 to 1.08
Examples of services: Accommodation and Community High: Large residential centres, group home and small residential centres, hostels, attendant care, in-home support and alternative family placement.
Rate of transition for people and funding variation rate: 100% of people transition by 31 July 2016 . The cohort is paid in full (100%) for the month of July and then no further payments are made.
 If a significant number of people have not transitioned in July 2016, ADHC will make an assessment on whether a repayment in August will be made so providers can continue to support people who have not yet transitioned.
MDS Service Type: 3.01 to 3.03, 2.01 to 2.07
Examples of services: Community Access and Support: Learning & life skills, recreation/holiday programs, other community access, therapy, early intervention, behaviour intervention, case management.
Rate of transition for people and funding variation rate: 75% of people are planned to transition between July and December 2016. An accumulating 12.5% monthly reduction to payments will be made to achieve a 75% variation over six months. (75% ÷ 6 months = 12.5%).
25% of people are planned to transition between January and June 2017. An accumulating 4.2% monthly reduction to payments will be made to achieve a 25% variation over six months. (25% ÷ 6 months = 4.2%).
MDS Service Type: 4.01 to 4.05, 10.01 to 10.26
Examples of services: Respite and Community Care Support Program: Centre-based respite, flexible respite, domestic assistance, personal care, meals service, home modifications, transport, case management (excludes assessment)
Rate of transition for people and funding variation rate: 25% of people are planned to transition between July and December 2016. An accumulating 4.2% monthly reduction to payments will be made to achieve a 25% variation over six months.
75% of people are planned to transition between January and June 2017. An accumulating 12.5% monthly reduction to payments will be made to achieve a 75% variation over six months.
Individually funded services
Payments for individually funded service users are not included in a cohort in the Planned Payment Schedule. They are shown in the Schedule in a separate line called “Individual”.
Funding variations for individually funded services have not yet been made. Monthly payment reductions can only be applied to block funded services not to individualised funding.
Funding variation will be made only when a person transitions and their NDIS support plan is activated by the NDIA. ADHC will terminate funding using that date.
Non output services
Funding variations will not be made to non output services. Funding will continue to be paid in full until 30 June 2018. Non output services are defined by the following service models:
• 2.07.01 Support Networks
• 6.01.01 Individual Advocacy
• 6.03.01 Combined Information/Advocacy
• 6.02.01 Information/Referral
• 6.05.02 Print Disability/Alternative formats
• 7.02.01 Training and Development
• 7.04.02 Other Support Services
• 10.20.01-10.20.09 Community Care Support Program non-output services.
Continuity of support
People who had been receiving state funded specialist disability support, but are not eligible for the NDIS, will receive continuity of support so that they will not be disadvantaged. Transition arrangements for these groups are in the process of being finalised.
People who are over 65 will receive supports administered by the Commonwealth.
People who are under 65 will receive supports from the NDIA through Information, Linkages and Capacity Building. All people under 65 who qualify for continuity of support will be transitioning in cohort 3.
At this stage, the standard funding variation process has been applied to all clients based on their funding cohort. This may be reviewed once the continuity of support arrangements have been finalised.
Funding variations for year 2
Year 2 services do not have any funding variations in 2016/17. Payments will be made in full and, for providers that only have service users in year 2, payments will still be made quarterly in advance.
Advice about year 2 funding variations will be sent to service providers in 2017.
July 2016 payment
For July 2016, ADHC will make a payment in full to all providers. Funding variations will then apply on a monthly basis from August 2016 (for year 1 services) until all funding is varied.
Providers will be able to make a claim to the NDIA for payment for each person that has transitioned in July. ADHC will not seek to recover a portion of the July block funded payment for people now funded by the NDIA. Providers can use this portion of ADHC funding paid in July to manage general cash flow changes during the transition.
Managing planned versus actual transition rates
ADHC will be monitoring closely the actual rate of people transitioning into the NDIS against expected transition numbers. ADHC can adjust funding variations where there is a significantly slower or faster transition rate of people to the NDIS. This analysis and any potential adjustments will be made on a monthly basis.
For example, if there is a significant number of people have not transitioned as planned in October, then an adjustment will be made to the provider’s November funding variation (the payment reduction will be less). This means that funding variation will be slowed in November to account for the slowed rate of people transitioning in October.
For more information
For further information on NDIS transition funding variation, please go to www.ndis.nsw.gov.au, email firstname.lastname@example.org or call 1300 136 067. Service providers should also talk to their contract manager to understand how their services will transition.