National Disability Insurance Scheme - Australia European Social Network Conference Sarah Johnson – Scheme Actuary Lisbon, Portugal July 2015

An insurance-based approach Agenda An insurance-based approach Journey to the NDIS Scheme experience Building a sustainable scheme

An insurance based approach

Strategic goals People with disability are in control and have choices, based on the UN Convention on the Rights of Persons with Disabilities. The National Disability Insurance Scheme is financially sustainable and is governed using insurance principles. The community has ownership, confidence and pride in the National Disability Insurance Scheme and the National Disability Insurance Agency.

A disability insurance scheme The NDIS is based on the principles of insurance The risk of disability affects all Australians. The NDIS is a way of pooling these risks. Australians pay a premium (collectively) that is enough to cover the annual costs of the care and support needs of participants and the costs of running the scheme.

Insurance Principles The aggregate annual funding requirement will be estimated by the Scheme Actuary The NDIS will focus on lifetime value for scheme participants The NDIS will invest in research and innovation The NDIS will support the development of community capability and social capital

Expected future payments Liability Lifetime Cost of Participant Past payments Expected future payments Once a participant is in the scheme, the NDIS is liable for their lifetime cost Factors influencing lifetime liability: packages of support and changes to these packages, inflation (including wage rates), life expectancy NDIS “average” participant: $35,000 average annual package and $1.2 million liability (lifetime liability 35 times the annual cost on average)

Monitoring and managing financial sustainability Collect data on the number of participants, the characteristics of these participants , the outcomes for these participants, and the cost of supports provided to participants Identify drivers of good and bad outcomes – benefits to participants, their families and the community

Journey to the NDIS An insurance based approach

History Heads of Agreement are now in place for full scheme in NSW, SA, ACT, Tas, Vic and Qld 2008: Government’s 2020 summit proposes a national disability scheme 2010: Productivity Commission conducts enquiry into long term disability care October 2011: Council of Australian Governments agree to the need for reform – joint taskforce develops Scheme design March 2013: NDIS Act 2013 establishing the NDIS and NDIA passed 2009: The Disability Investment Group released its findings in The Way Forward July 2011: Productivity Commission submits report to government December 2012: Council of Australian Governments sign an intergovernmental agreement to trial the Scheme April 2013: Bilateral agreements with trial sites signed

Trial sites are established and expanding Since 1 July 2013, the NDIS trial has been operating in: South Australia (0-14 years) Tasmania (15-24 years) Hunter region, New South Wales Barwon region, Victoria On 1 July 2014, the NDIS trial commenced in: Australia Capital Territory Barkly region, Northern Territory Perth Hills region, Western Australia The Scheme now has 7 trial sites across Australia. They are in the Hunter (NSW), Barwon (VIC), South Australia (for children under six years of age) and in Tasmania (for young people, aged 15 to 24 years). As of 1 July 2014, we expanded the NDIS trial sites to include the ACT, Barkly in the NT and Perth Hills, in WA. In addition, we are expanding our footprint with an office in Colac in the Barwon region, and an office in Newcastle in 2015. In Queensland, important preparatory work by the NDIA and the Queensland Government is forging ahead under a Memorandum of Understanding. Queensland will transition in July 2016.

An insurance based approach Scheme experience to date 1 July 2013 – 31 March 2015

Profile of participants - Age 30-35% are children aged 0-14 years The age distribution in the Australian Capital Territory and Western Australian trial sites reflects the phasing schedules of the trial sites.

Profile of participants - Gender The proportion of males and females is consistent with the actuarial model for the New South Wales, South Australian, Tasmanian and Victorian trial sites. The new trial sites have relatively more males than females due to the specific age groups currently in these trial sites.

Profile of participants – primary disability Autism and related disorders and intellectual disability (including Down syndrome) are the largest primary disability groups in the New South Wales and Victorian trial sites.

Implementation issues Transition from existing disability system to the NDIS Legacy of existing systems evident in trial site experience to date Move from block funding to invoicing Support provided in kind

An insurance based approach Building a sustainable scheme

Reference groups - background 419,500 people across Australia, at a total cost of $14.7 billion (2013/14 figures) Split into cohorts based on age, health condition, and level of functional support need Reference packages: provide an expected annual funding level for participants with similar support needs and characteristics a link between resource allocation to individual participants and the overall funding envelope a crucial role in scheme monitoring

Modelling of reference groups Intellectual Disability $3 billion Low Severity $2 billion Medium severity … High Severity 0-14 year olds $1 billion 14-24 year olds $0.5 billion Stroke $0.5 billion Low severity $0.2 bn Total Funding Envelope $14.7 billion

Outcomes framework - background Legislation support social and economic participation of people with disability choice and control maximise independence facilitate greater community inclusion Other documents: Strategic plan UN Convention on the Rights of People with a Disability National Disability Strategy

Outcomes framework – life stages Different goals may be relevant at different life stages. To allow for this changing focus, unique sets of questions have been developed for each age group: Children from birth to school entry Children from school entry to age 14 Young people aged 15 to 24 Adults aged 25 to 55 Older adults aged over 55.

Outcomes framework - adults The adult frameworks consist of eight participant domains and five family domains. The participant domains are: Choice and control Daily activities Relationships Home Health and wellbeing Lifelong learning Work Social, community and civic participation

Outcomes framework – families/carers The family/carer domains are: Families have the support they need to care Families know their rights and advocate effectively for their family member with disability Families are able to gain access to desired services, programs, and activities in their community Families have succession plans Families enjoy health and wellbeing

Transition to full scheme Ongoing bilateral negotiations between states/territories and the Commonwealth government Agreements likely in place in August 2015 Around 30,000 participants at the end of the trial, ramping up to 460,000 at full scheme Focus on enduring data collections and reducing the need for frontline staff to collect data that may be available from other sources Building a national footprint

Questions? Visit: www.ndis.gov.au Email: enquiries@ndis.gov.au