Early in June 2024, the Commonwealth Government announced a 3.75% increase to the minimum wage, which affects many sectors, including disability support. This increase impacts the price limits for supports provided through the NDIS. Understanding these changes is crucial for navigating your NDIS plan and ensuring you can access the necessary support and services within your budget.

The NDIA uses the Disability Support Worker (DSW) Cost Model to calculate price limits for support delivered by support workers. While this year's price caps have increased due to the wage hike, the removal of the temporary 1% loading means the actual increase is 3.19%. However, several supports, particularly those not based on the DSW Cost Model, have not seen changes in their price caps.

In 2024, price cap increases are primarily seen in Core supports, including Psychosocial Recovery Coaching and Support Connection. This means that for some services, such as PRC, the price is now higher than Support Coordination Level 2. Additionally, the NDIA has adjusted the price caps for psychology, nursing, and behaviour support services by 3.9%, matching the Australian Bureau of Statistics Wage Price Index. Understanding these detailed updates can help you better manage your NDIS plan and funding.

NDIS Price Caps and the Minimum Wage Increase

Due to the increase in the minimum wage, the NDIA has adjusted the price caps for these supports. However, the NDIA also decided to remove the temporary 1% loading. This means that despite the wage hike, the actual increase in price caps will be 3.19%, not the full 3.75%. This adjustment helps balance the needs of support workers while maintaining affordability for participants.

Understanding these changes is important for participants and providers alike. It ensures that both parties can plan accordingly and make informed decisions about their services and budgets. By being aware of the price cap adjustments, participants can continue to receive the necessary support without significant disruptions.

Frozen Price Caps for Non-DSW Cost Model Supports

While the DSW-based supports have seen adjustments, many other services listed in the Price Guide and Catalogue (PAPL) have not changed. These supports are not based on the DSW Cost Model, resulting in yet another year of price freezes for specific categories. This includes Support Coordination Levels 2 and 3, most therapy supports, and Plan Management services.

The lack of adjustment in these areas can pose challenges. For participants relying on these supports, the static price caps mean they must manage their resources carefully. For providers, it creates a constraint on the ability to adjust service offerings or wages in line with broader economic changes.

Key Supports with Frozen Price Caps:

1. Support Coordination Level 2 and 3: These crucial services help participants manage their plans and connect with necessary supports.

2. Therapy Supports: Essential therapies such as physiotherapy, occupational therapy, and speech therapy have not seen price increases.

3. Plan Management: Services that help participants manage their NDIS funding and payments remain at the same price limits.

Participants and providers should be aware of these freezes and plan their services and budgets accordingly. This awareness helps ensure that services continue to be delivered effectively despite the financial constraints posed by static price caps.

Price Cap Increases for Core Supports and Specific Services

The price cap increases for 2024 focus primarily on Core supports, which include essential services that many participants rely on daily. These adjustments ensure that essential supports remain viable despite rising wage costs. Among the Core supports seeing a price cap increase are Psychosocial Recovery Coaching (PRC) and Support Connection (Level 1 Support Coordination).

Interestingly, PRC is now priced above Support Coordination Level 2 for the first time. The updated price caps reflect the growing recognition of the value these services provide to participants. In addition, the price caps for psychology and nursing supports have also increased by 3.9%, in line with the Australian Bureau of Statistics Wage Price Index. Behaviour support services see a similar 3.9% rise in their price caps.

These adjustments help ensure the sustainability of critical supports and services. While these increases might result in higher out-of-pocket costs for participants, they aim to improve the quality and availability of support services. Participants should review these changes and plan their budgets accordingly to accommodate the new price structures.

Impact of Temporary Loading Removal and Short Notice Cancellations

The removal of temporary loadings and the impact of short notice cancellations are significant factors influencing the NDIS price landscape for 2024. The Temporary Transformation Payment (TTP), which provided additional funding to some providers, has been reduced annually since its introduction. Initially set at 7.5% in 2020, the TTP has decreased by 1.5% each year, aiding providers' transition to the NDIS. For services delivered before 1 July 2024 but billed after, TTP line items remain temporarily available as Legacy Line Items.

Another temporary 1% loading on Core items, introduced to cover extra costs associated with COVID-19 and quality and safeguarding requirements, has also been reduced. This loading began at 2% in July 2022, decreased to 1% in July 2023, and is set to end in July 2024. The planned reduction aims to normalise funding levels now that the initial pressures have lessened.

Additionally, the NDIA noted a significant increase in costs linked to short notice cancellations in their Pricing Review Report. Over three years, these costs nearly doubled from $60 million to $120 million, with therapy and early childhood supports making up 37% of these claims. Providers and participants need to be aware of these changes, as they can affect the overall cost and availability of services.

Conclusion

Navigating the changes in NDIS price caps for 2024 is crucial for both participants and providers. The adjustments reflect shifts in wage standards and economic conditions, aiming to balance the sustainability and affordability of essential supports. Understanding the specific increases in Core supports, psychology, nursing, and behaviour support services will help participants make informed decisions about their care and manage their NDIS funding effectively.

Equally important is recognising the impacts of the removal of temporary loadings and the significant rise in costs due to short notice cancellations. These factors can influence the overall landscape of NDIS funding and the availability of services. Keeping abreast of these changes enables better planning and maximises the benefits received under the NDIS scheme.

If you need guidance on how to navigate these changes and optimise your NDIS plan, Kismet is here to help. Contact us today to ensure you make the most of your NDIS funding and continue receiving the support you need.