Specialist Disability Accommodation – An overview

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Specialist Disability Accommodation (SDA) forms the bricks and motor component of disability housing within the NDIS. The demand for this type has increased rapidly over the past decade and represents vast opportunities for disability accommodation providers throughout the sector.

Specialist Disability Accommodation (SDA)

Specialist Disability Accommodation (SDA) is a range of housing which is designed for the National Disability Insurance Scheme (NDIS) participants who have extremely high care and support needs. These purpose built, specialist facilities allow these NDIS participants to access appropriate and targeted care, allowing these individuals to live more independently and achieve improved health outcomes.

Eligible NDIS participants are provided with funding to cover the capital costs of the dwelling which they move into. The funding is limited to the brick and mortar capital of the dwelling (i.e. rent) as opposed to any services or supports which are carried out in the home. The Australian Government estimates that when the scheme is operating at its full capacity, funding is expected to grow to AU$700 million per year.

The SDA is being rolled out in an individualised, participants led funding model as it brings with it several benefits:

  • Individual participants have autonomy around their choice of where to live, as opposed to a government agency dictating and deciding on application from providers;
  • Funding levels will remain steady and not be based on large sums of money being pumped into the sector through grants or policy decisions; and
  • Individuals having choice means that funding can flow to a wide range of providers who can offer varying products both in scale and innovative solutions, rather than being limited to select established providers who are familiar with the grants processes or established models of accommodation and support – essentially this means there is more competition in this space through an individual/participant driven market.

Opportunity – Lack of supply and exponential growth

At the beginning of the SDA program in 2011, the Productivity Commission estimated that when operating at full capacity there will be 28,000 Australians who will require SDA funding. This translated to around 6% of all NDIS participants.

More recent estimates made after the commencement of the SDA scheme have suggested that 50,700 people are likely to be found eligible for SDA. This is more than double the original estimates and indicates how demand for this type of accommodation will only increase. These figures include:

  • 17,500 people already living in supported disability accommodation;
  • 27,000 people who are not in supported accommodation but have very high care needs; and
  • 6,200 people aged under 64 who are living in residential aged care.

These figures represent a significant opportunity for SDA providers. The Commonwealth Government has decided that a market led and driven approach will be utilised, with estimates that when operating at full capacity the SDA program will attract around AU$5 billion of private sector investments. This market led approach has seen a conscious effort to increase data around SDA demand, increase choices for participants, move young people out of aged care, provide clearer and consistent information to investors and establish a more refined pricing review cycle.

Types of SDAs

There are three broad categories of SDA dwellings. The type of category a dwelling is placed into will impact the amount of funding a participant will be able to claim and therefore impact how much a provider of SDAs will be able to “charge”. If a dwelling is unable to fall into the following categories then it is not able to be enrolled in the program and receive SDA payments.

The three broad categories of SDA dwellings are:

  1. New Build;
  2. Existing Stock; and
  3. Legacy Stock.

These categories are further divided into four types of buildings:

  1. Apartments;
  2. Villas, Duplexes and Townhouses;
  3. Houses; and
  4. Group Homes.

The final categorisation is design category. The SDA price limit that applies for the dwelling depends on which design categories the dwelling is enrolled under. The level of support determines which of the five design categories the dwelling falls into. Since the introduction of the new design standard on 1 July 2021 all SDA providers seeking to enrol new builds must include a SDA design standard certification from a SDA assessor.

The types of design categories are:

  1. Basic;
  2. Improved Liveability;
  3. Fully Accessible;
  4. Robust; and
  5. High Physical Support.

How the payment works

Previously SDA payments were made directly by NDIA to the SDA provider. However, currently the payments are made directly to the NDIS participant which in turn is then provided to the SDA provider. Funding to participants is based on an evaluation and consideration of their goals, preferences, the reasonable and necessary test, SDA eligibility criteria and whether the SDA in question represents value for money.

The payment and pricing arrangements for SDAs is governed by the NDIS Pricing Arrangements for Specialist Disability Accommodation which summarises the limits which SDA providers can charge for services.

The value of the payment received by an SDA provider is dependent on several factors:

  • Whether the dwelling is new or existing;
  • The level of accessibility in the property;
  • The type of dwelling; and
  • The location of the dwelling – this can significantly reduce the payment or significantly increase the payment particularly in high density inner urban suburbs where demand for housing is high.

Conclusion

The SDA program possesses significant potential for changing lives for people living with disability throughout Australia. It is also a huge opportunity for providers who have been incentivised by the Government and the disability sector to build far superior, more liveable spaces for individuals with disability than ever before.

It is this market led approach that should be exciting for providers as it allows for greater flexibility and different and innovative offerings to be brought to the disability housing sector. SDA is an extremely fast growing market with more and more developments needed which is correlating with a growth in demand. The Commonwealth Government has acknowledged that there are certain barriers to convincing developers and providers to engage in providing SDA. However, there appears to be a conscious and sustained effort at advancing the data gathering and market information to give comfort to providers and investors that SDA makes worthwhile business sense, as well as providing essential accommodation for some of the most vulnerable in the community.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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