27 August

The New Zealand Disability Support Network is calling on Disability Issues Minister Louise Upston to explain the contradictions between her 'open letter' that assures disabled people they will experience no changes as a result of the Government's disability funding freeze and guidelines issued to providers on how to cut costs and deny disabled people access to support.

The Minister's 'open letter' was released to select members of the disability community last Friday, the day after Needs Assessment Service Coordination agencies received new guidelines entitled "Freeze on residential care funding and management of NASC indicative budgets and EGL site fixed budgets". 

Letter from the New Zealand Disability Support Network to Minister for Disability Issues Louise Upston

Dear Minister,

Last Friday, you released an open letter in response to the concerns of disabled people, their whanau and carers, and disability support providers about the cuts you recently announced to disability support. Your letter says the funding freeze is an effort to “stabilise the disability support system” and people won’t be affected. In fact, the funding freeze, which amounts to a real-terms cut of around 5% after inflation, has destabilised the system. Providers have already been issued guidelines to reduce costs and deny disabled people the support they need.

Let’s be clear: there is no “over-spending” in disability care; there is underfunding. Just 0.6% of GDP is spent on disability support. The bulk of funding goes to frontline staff - disability support workers are paid low wages for hard work helping disabled people live better lives. There is already not enough funding to support everyone who needs it, and those who get support often don’t get enough. Disability support providers would like to do more for more disabled people and pay their staff more than the minimum wage – but they can barely keep their heads above water on current funding.

In your letter, Minister, you point to geographic disparities in support available to disabled people. This is a real issue. But nothing in the funding freeze that has been announced fixes that – if anything, it locks disparity funding in place.

Minister, the claims in your open letter that disabled people won’t be affected do not match the real consequences of your decisions on disabled people. Providers are now under orders from the government through NASC agencies to turn away disabled people who need help to avoid increasing the number of people getting support. This is a complete false economy. The costs don’t disappear – they are just shifted. On to the disabled people themselves, their whanau, and the health system.

We know that the cuts are only set to worsen in the second round of your review – Budget 2024 contains an $86m funding cut between 2024/25 and 2025/26. Minister, you cannot tell us that cost cutting is necessary because of the fiscal situation. When it comes to tax cuts for landlords or excise cuts for tobacco companies, the Government is able to fund billions. The Government’s choice not to adequately fund disability support is exactly that – a choice – one the Government can change.

Contradictions between the Minister’s open letter and official letter to disability support providers

Minister, we want to draw your attention to the contradictions between statements in your open letter and the document Operational Policy and Guidelines 2024/25: Freeze on residential care funding and management of NASC indicative budgets and EGL site fixed budgets, 22 August 2024 – released to us one day before your letter. The difference in the content of your reassurances and these official directions is stark, which is causing widespread worry and concern in the disability community. Your letter states no changes have occurred yet, but people at the frontline are already being directed to change how they handle the needs of disabled people. This needs to be urgently clarified.

Minister, you state the government is:

"maintaining current levels of funding for residential facility-based care for the 2024/25 year"

However, in the Guidelines, providers have been told is this an effective freeze on providing residential care to new people:

“In practice, this is likely to mean no net increase in costs for most individuals and residential care services, and no net increase in the number of people in residential care.”

You state:

"I want to reassure you that there will be no immediate change to the services and support you receive. You will continue to get the funding, equipment, care and other disability support you are eligible for”

However, but in the Guidelines, providers have been told that the funding freeze means they should bring forward funding reviews to look to cut support:

"If action is needed to bring spending within the indicative or fixed budget, NASCs and EGL sites can:

• further reduce allocation of support (consistent with requirements).

• Bring forward annual reviews of allocations by implementing an early review process

....If a NASC or EGL site is tracking above its indicative or fixed budget, it can bring annual reviews forward in order to reduce spending."

You claim there is no freeze on admissions into residential care:

"I want to reiterate there will be no immediate changes for individual disabled people currently receiving support and no admissions freeze into residential facility-based care. New people can still enter residential care through the normal assessment process."

Yet, in the Guidelines, your officials are advising providers that they cannot increase the number of people getting residential care. Instead, they must institute a ‘one-in, one-out’ process and should look to cut costs, despite new clients usually have greater, more complex needs:

The hold on growth in residential care extends to:

a. Residential care, such as group homes and live-alone arrangements, funded under the Community Residential Care Specification;

b. High and Complex (forensic) care – provided both in the community and through secure hospital-based care, under contract between the Ministry and RIDSAS (Regional Intellectual Disability Supported Accommodation Service) providers and Health New Zealand Te Whatu ora;

c. Rest home care - paid on invoice through contracts between the Ministry and providers;

d. Hospital level care – usually provided through aged care providers who hold a contract with the Ministry; and

e. Residential rehabilitation – where a person resides in a facility that also provides rehabilitation services.

"Whilst a number of people do leave residential care in any given year, and the number of people supported overall has remained relatively static, those entering residential care have generally had greater complexity of needs – and larger packages – than those exiting."

..."to stay within the expenditure hold we aim to limit the cost of new entries within forecast reductions in cost due to exits."

Further, unfunded changes being made by Kainga Ora, moving from tenancy agreements to lease agreements, will increase costs significantly for providers to the point that some providers will choose to exit unviable services. A sector already stretched for capacity will be under further pressure and people deserving of this level of support unable to access it.

Minister, both you and officials have referred to the annual growth of the system. Around 3,500 new entrants to disability support arrive each year, many with more complex needs. With provider funding frozen, are disability support providers expected to support these new entrants without additional funding? And if this means spreading the existing dollar further, does that not indicate a further cut for providers to face and less support for disabled New Zealanders to expect?

Genuine engagement needed

Minister, in your letter, you state: "I also want to reassure you that no changes to flexible funding and allocation settings will be made until we have heard your perspectives, voices and insights". We cannot help but notice that the phrasing here implies that further cuts definitely are coming, albeit with some chance for submissions first, this time.

Consultation with a pre-determined outcome is not genuine consultation at all – it is a fig leaf. We ask that you agree to meet with the sector for genuine discussions, without predetermined outcomes. Let’s build a plan together – disabled people, whanau, support workers, providers, and government engaged in real conversation to agree on what funding is needed and make a bid for Cabinet to fund it. That is surely more meaningful than being gathered to hear the Government’s latest decree.

Sincerely yours,
Peter Reynolds
Chief Executive Officer
Kia Tu Tahi Tatou NZDSN

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