Report reveals new funding options for Activ workshops and other supported employment sites

A team dedicated to keeping embattled supported employment provider Activ Foundation open has identified a new funding model that would cost the Federal Government less than the options available under the current National Disability Insurance Scheme model.

In May, the Activ Foundation announced the shock closure of its large-scale supported employment worksites, which currently employs 755 people in WA. CEO Michael Heath said sites were operating at a loss due to the lack of appropriate NDIS funding.

The financial sustainability of Australian disability enterprises (ADEs) has long been an issue, with a 2017 Productivity Commission report on NDIS costs finding 75 per cent of providers were operating at a loss.

The situation was mainly unchanged after a new NDIS pricing model was introduced in July 2020, with a report saying more than half of providers were unsure if they could operate within the NDIS as it currently existed.

The Activ Action Team’s new report released late last month, Supporting Australian Disability Enterprises, has revealed that implementing a funding model based on an average baseline funding model of $8000 per head per year could save Activ workshops and cost less than current options in the NDIS.

These alternatives include micro-enterprises, community-based activities, or increased support hours at home or in supported independent living.

The current price to support a person via these alternatives can range from $50 to $60 per hour per person, while the maximum additional baseline funding needed for Activ to break even is less than $45/hr for a ratio of one support worker to between 5 and 10 supported employees.

The Activ Action Team has presented three options of how the average baseline funding model could work to support the long-term sustainability of ADEs:

• Annual ‘headcount’ of workers — allocating $8000 per supported employee per year, either through a change to NDIS funding or by bringing funding out of the NDIS domain and providing it based on annual census;

• The number of hours/days worked — funding per hour per person would enable Activ and similar ADEs to break even. An amount could be added to each employee’s ‘Supports in Employment Fundings’ based on their work schedules; and

• Scaled baseline funding — funding based on a worker’s relative productivity level. At an average of $8000 per worker per year, funding could be on a scale of $5000-$11,000 depending on Disability Maintenance Instrument rankings or another agreed measurement of capacity.

Amy Clark, a volunteer from the Activ Action team, said the Federal Government would benefit from maintaining employment opportunities for people with disability under a newer, more sustainable funding model.

“We want to see the Albanese government implement a fit-for-purpose funding model,” Ms Clark said.

“For many individuals with high support needs, working in an ADE is the only genuine employment opportunity they have.”

The Activ Action Team has submitted the report to Federal NDIS Minister Bill Shorten and Federal Social Services Minister Amanda Rishworth, as well as WA Disability Services Minister Don Punch for review.

The Department of Social Services said the Government welcomed the work of the Activ Action Team in preparing the report and advocating for workers and their families.

“There are many views across stakeholders, families and workers on the future of the Australian Disability Enterprise sector. All views need to be heard and considered,” a department spokesperson said.

The department said Ms Rishworth had recently hosted a roundtable with the Activ Action Team and other stakeholders to discuss their research and provided first-hand accounts of the importance of supported employment for their families and the workers.

“Minister Rishworth will be seeking agreement from her State and Territory colleagues on next steps in the coming months,” the spokesperson said.

The Federal and State governments in June announced a combined $11.8 million grant to allow Activ to remain open for 18 months and to assist other WA-based ADEs through the transition period.

Mr Punch said employing people with disability was “a priority of the McGowan government”.

“People with disability deserve to have fulfilling work that aligns with their interests and values,” he said.

“I take my role as an advocate for Western Australians with disability very seriously and will continue to work closely with the Federal Government to help affected Activ employees transition into new roles.”

A National Disability Insurance Agency spokesperson said the agency knew the importance of finding and keeping a job and would continue to support and improve employment outcomes for participants.

“The Agency’s priority is to ensure employees affected by Activ’s decision are supported in their transition into new, suitable placements,” the NDIA spokesperson said.

“The NDIA is encouraged that some Australian disability enterprises operating under this funding model in WA are offering employment opportunities to Activ’s displaced employees.”