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Sarah Johnson – Scheme Actuary

Lisbon, Portugal

July 2015

European Social Network Conference

National Disability Insurance Scheme - Australia

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An insurance-based approach

Journey to the NDIS

Scheme experience

Agenda

Building a sustainable scheme

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An insurance based approach

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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.

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• 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.

A disability insurance scheme

Scheme funding$$$$$$

$$$

$$$

Participants and familiesConsolidated revenue (taxes)

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• 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

Insurance Principles

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• 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)

Liability

Lifetime Cost of Participant

Pastpayments Expected future payments

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• 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

Monitoring and managing financial sustainability

Participant outcomes and scheme costs

Factors contributing to deviations

Mainstream services

Family and friends

GeographyCommunity

inclusiveness

Participant characteristics (e.g. reference

groups)

Service Providers

Availability of supports

Cost of supports

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An insurance based approach

Journey to the NDIS

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History

2008: Government’s 2020 summit proposes a national disability

scheme

December 2012: Council of Australian Governments

sign an intergovernmental agreement to trial the Scheme

March 2013: NDIS Act 2013

establishing the NDIS and NDIA passed

April 2013: Bilateral

agreements with trial sites signed

Heads of Agreement are now in place for full scheme in NSW, SA, ACT, Tas, Vic and

Qld

2009: The Disability

Investment Group released its findings in

The Way Forward

2010: Productivity

Commission conducts enquiry into long term

disability care

July 2011: Productivity

Commission submits report to government

October 2011: Council of Australian

Governments agree to the need for reform – joint

taskforce develops Scheme design

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

Trial sites are established and expanding

On 1 July 2014, the NDIS trial commenced in:

• Australia Capital Territory

• Barkly region, Northern Territory

• Perth Hills region, Western Australia

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An insurance based approach

Scheme experienceto date1 July 2013 – 31 March 2015

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Profile of participants - Age

0%

10%

20%

30%

40%

50%

60%

00-14 yrs 15-24 yrs 25-34 yrs 35-44 yrs 45-54 yrs 55-64 yrs 65+ yrs

Dis

trib

uti

on

Age group

NSW VIC ACT NT WA Expected %

• 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.

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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.

Female, 40%

Female, 29%

Female, 36%

Female, 41%

Female, 36%

Female, 40%

Female, 35%

Male, 60%Male, 57%

Male, 71%Male, 68%

Male, 64%Male, 63%

Male, 59%Male, 58%

Male, 64%Male, 55%

Male, 60%Male, 48%

Male, 65%Male, 57%

Other, 0.1%

0% 20% 40% 60% 80% 100%

ActualExpected

ActualExpected

ActualExpected

ActualExpected

ActualExpected

ActualExpected

ActualExpected

NS

WS

AT

AS

VIC

AC

TN

TW

A

Distribution

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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.

22%22%

5%5%5%

0% 5% 10% 15% 20% 25%

autism and related disordersintellectual disability

cerebral palsyother neurological disorders

schizophreniadown syndrome

developmental delaydeafness/hearing loss

global developmental delaymultiple sclerosis

acquired brain injuryother physical disorders

other psychiatric disordersother sight loss

strokeother sensory/speech disorders

physicalintellectual disability - mild

Other

Distribution

Pri

mar

y d

isab

ilit

y

NSW

23%22%

7%6%

5%

0% 5% 10% 15% 20% 25%

intellectual disabilityautism and related disorders

developmental delayschizophrenia

other psychiatric disordersdown syndrome

cerebral palsyglobal developmental delay

multiple sclerosisbipolar affective disorder

acquired brain injuryintellectual disability - mild

other neurological disordersstroke

other sight lossphysical

deafness/hearing lossother physical disorders

Other

Distribution

Pri

mar

y d

isab

ilit

y

VIC

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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

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An insurance based approach

Building a sustainable scheme

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• 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

Reference groups - background

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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

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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 - background

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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:

1. Children from birth to school entry

2. Children from school entry to age 14

3. Young people aged 15 to 24

4. Adults aged 25 to 55

5. Older adults aged over 55.

Outcomes framework – life stages

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Adults

The adult frameworks consist of eight participant domains and five family domains.

The participant domains are:

1.Choice and control

2.Daily activities

3.Relationships

4.Home

5.Health and wellbeing

6.Lifelong learning

7.Work

8.Social, community and civic participation

Outcomes framework - adults

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The family/carer domains are:

1. Families have the support they need to care

2. Families know their rights and advocate effectively for their family member with disability

3. Families are able to gain access to desired services, programs, and activities in their community

4. Families have succession plans

5. Families enjoy health and wellbeing

Outcomes framework – families/carers

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• 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

Transition to full scheme

Questions?

 Visit: www.ndis.gov.au

Email: enquiries@ndis.gov.au