Schedule b financial Contributions for Transition in the



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Bilateral Agreement between the Commonwealth and the Northern Territory for the transition to an NDIS

Schedule B

Financial Contributions for Transition in the

Northern Territory


  1. This schedule is to be read in conjunction with:

    1. Schedule A: Participant Transition Arrangements in the Northern Territory;

    2. Schedule C: Cross Billing and Budget Neutrality Arrangements in the Northern Territory; and

    3. Schedule D: Continuity of Support in the Northern Territory.

Funding Arrangements

  1. Both parties agree that, during the transition period, funding responsibilities are consistent with arrangements under the Heads of Agreement between the Commonwealth and the Northern Territory on the National Disability Insurance Scheme (NDIS); with

    1. the Northern Territory responsible for providing an agreed, fixed per client contribution for each existing client that has transferred from Northern Territory specialist disability services to the NDIS, and other participants, based on actuals up to an agreed number of participants under the age of 65 (Indigenous Australians under the age of 50), that amounts to 59.4 per cent of the agreed package costs;

    2. the Commonwealth responsible for an agreed, fixed per client contribution for each existing client that has transferred from Northern Territory specialist disability services to the NDIS, other participants, participants 65 years and over, and 100 per cent of National Disability Insurance Agency (NDIA) operational and administration costs (including Information, Linkages and Capacity Building funded within the NDIS and NDIA operational costs); and

    3. the Commonwealth is responsible for meeting 100 per cent of the risk of cost overruns above the contributions outlined above.

  2. Tables 1 details the estimated contribution to package costs of the Northern Territory and the Commonwealth. The agreed funding contribution by client cohort reflects an average estimated funding contribution and not the cost of individualised plans. The weighted average funding contribution is based on the entire Northern Territory population that is expected to transition to the NDIS and, therefore, is not representative of the expected average package cost at any point in time during the transition period.


Table 1: Agreed annualised funding contribution to the NDIS for participants under the age of 65





2016-17

2017-18

2018-19

Supported Accommodation

$194,870

$203,249

$211,989

Residential Aged Care

$86,324

$90,036

$93,907

Indigenous aged 50-64 years

$61,538

$64,184

$66,944

Other Existing1

$41,598

$43,387

$45,253

New and Other Commonwealth Participants2

$22,872

$24,019

$25,383

Weighted Average

$39,677

$41,383

$43,163

1 Excludes Indigenous Australians aged 50-64 years.

2Other Participants include people currently receiving support from a Commonwealth Home Care package

  1. The Parties agree that the Northern Territory will contribute funding on a monthly basis in arrears, based on the actual number of existing clients (including trial participants) and other participants entering the NDIS each month, multiplied by the agreed per client funding contribution. The number of existing and other participants who will enter into the scheme during transition will be limited to the sequencing detailed in Schedule A: Participant Transition Arrangements in the Northern Territory.

  2. The Northern Territory is contributing its existing available funding for specialist and other disability services and supports, therefore:

    1. Northern Territory contributions are based on the actual intake of existing clients who have transitioned to the NDIS;

    2. Northern Territory contributions are based on an agreed per client funding contribution for different cohorts, and may increase or decrease based on actual participant intake;

    3. the agreed per client funding contribution for different cohorts is based on a weighted full scheme national average cost per participant;

    4. Northern Territory contributions for participants are capped at the total estimated intake of existing and the quarterly intake of other participants, as outlined in Schedule A: Participant Transition Arrangements in the Northern Territory; and

    5. for the purpose of the Northern Territory making a contribution, an existing Northern Territory client is assessed as having transitioned to the NDIS at the time of plan approval.

  3. The Parties agree that:

    1. the NDIA is responsible for funding all support costs associated with the plan once a participant has an approved plan in place; and

    2. administrative details of this arrangement will be finalised through the Operational Plan developed by the Northern Territory, the Commonwealth and the NDIA.

  4. The Northern Territory contribution for other participants is capped and subject to the agreed ratio of other participants to existing clients and the timing of other participants as outlined in Schedule A: Participant Transition Arrangements in the Northern Territory.

  5. The anticipated phasing means that the expected average cost during transition will not equate to the full scheme national average. The indicative average cost of participants during transition is outlined in Table 2.

Table 2: Agreed annualised funding contribution to NDIS package costs for participants under the age of 65 at the end of the financial year.




2016-17

($m)


2017-18

($m)


2018-19

($m)


Weighted Average Package Cost during transition1

$72,255

$68,398

$51,291

1The average funding contribution is based on the agreed transition arrangements as outlined at Schedule A: Participant Transition Arrangements, and therefore does not reflect the expected longterm average funding contribution.

  1. The Parties will separately agree, by 30 June 2016, the method of calculating invoices to enable the provision of the required contribution by each party as outlined in Tables 3 and 4.

  2. The Parties commit to making all contributions in respect of the trial period prior to 31 August 2016. As the Northern Territory will contribute funding on a monthly basis in arrears during transition, the Commonwealth may need to make earlier cash contributions to address any cash flow issues associated with this arrangement. These early payments, if made by the Commonwealth to address cash flow issues, will be offset against later payments once cash has built in the scheme and before the end of the financial year in which they are made. At the commencement of full scheme the Northern Territory will pay all outstanding invoices for the transition period in addition to its contribution to full scheme.

  3. The Parties will allow cash to build up in the scheme up to a ceiling. The cash ceiling will be equivalent to three months of total agreed annualised funding contributions in respect of those participants in the scheme with an approved plan as at the end of each month. Calculations of the cash ceiling will be updated each month by the NDIA. Where the level of cash that has built in the scheme approaches the cash ceiling, the NDIA invoicing will limit contributions by the parties to the level of the cash ceiling, as calculated at the end of that month.

  4. The Parties agree that cash that builds in the scheme can be used by the NDIA to manage cash flow risks and to manage costs back to the agreed total funding, if commitments in plans are higher than expected. If the NDIA cannot manage costs back to the agreed total funding then consistent with the responsibilities in paragraph 2(c) the Commonwealth will work with other parties, including the NDIA, to develop agreed mitigation proposals which could include changes to participant phasing arrangements to allow the Commonwealth to supplement the NDIA so that it can meet its commitments.

  5. The NDIA will issue all invoices within 15 days of the end of every month. The Northern Territory will pay all invoices issued by the NDIA within 30 days of the end of each month. This allows sufficient time for the NDIA to calculate an invoice based on actual participant numbers, and for the Northern Territory and the Commonwealth to agree the value of the invoice.

  6. Where an invoice is disputed:

    1. the Northern Territory will make the payment within the agreed timeframe and notify the NDIA of the basis of the dispute;

    2. the NDIA will investigate the disputed amount within seven days and negotiate with the Northern Territory to resolve or quantify the disputed amount within a further seven days; and

    3. on a three monthly basis (or as otherwise agreed by the NDIA and the Northern Territory), the NDIA would undertake a “wash up” with the Northern Territory to adjust discrepancies in the invoicing process.

  7. In addition to the Commonwealth’s responsibilities outlined in paragraph 2, the Commonwealth will provide financial assistance to the Northern Territory government, of $3.8 million over the transition period, to support the Northern Territory transition its current disability system to the NDIS, with:

    1. a Terms of Reference for the Northern Territory implementation team to be agreed by the 30 June 2016;

    2. Northern Territory to provide six monthly progress reports to the Commonwealth against the Terms of Reference, from 30 September to 30 June 2019; and

    3. upon acceptance of these reports, Commonwealth to provide financial assistance through an adjustment to the Northern Territory next invoice for the NDIS.

  8. The estimated funding contribution from the Northern Territory, subject to the client phasing in Schedule A and the agreed annualised funding contribution in Table 1 above, is outlined at Table 3:

Table 3: Estimated Northern Territory funding contribution for participants under the age of 65 (excludes Indigenous Australians aged 50-64 years).




2016-17

($m)


2017-18

($m)


2018-19

($m)


Total

($m)


Existing clients

$7.3

$28.0

$65.6

$100.8

Other participants

$0.4

$5.2

$15.9

$21.4

Estimated Northern Territory contribution1

$7.7

$33.1

$81.5

$122.3

1The Northern Territory’s contribution is based on the actual intake of clients multiplied by the agreed per client funding contribution and therefore may be higher or lower than the estimated total contribution outlined in this table.


  1. The estimated financial contribution from the Commonwealth is outlined at Table 4:

Table 4: Estimated Commonwealth funding contribution for participants (including Indigenous Australian aged 50-64 years)




2016-17

($m)


2017-18

($m)


2018-19

($m)


Total

($m)


Existing clients

$8.0

$29.1

$57.1

$94.2

Other participants

$4.1

$15.4

$32.4

$51.9

Participants aged 65 and over

$0.5

$1.9

$6.0

$8.4

Estimated Total Commonwealth contribution1

$12.7

$46.4

$95.4

$154.5

1Does not include administration and other costs not associated with a participant’s plan.

Intergovernmental Payments

  1. The Parties agree that the intergovernmental payments currently provided by the Commonwealth to the Northern Territory for the purpose of providing disability services to individuals should be paid to the NDIA on behalf of the Commonwealth by the Northern Territory, in line with clients transitioning to the NDIS.

  2. Intergovernmental payments include:

    1. the National Disability Specific Purpose Payment (NDSPP);

    2. the relevant portion of the National Partnership Agreement on Pay Equity for the Social and Community Services Sector (SACS NP); and

    3. Cross-billing arrangements for Indigenous participants aged 50 to 64 years in specialist disability services as set out in Schedule C: Cross Billing and Budget Neutrality Arrangements in the Northern Territory (CrossBilling).

  3. The Parties agree that there will be a separate process to cease the NDSPP from 1 July 2019 and that this process will consider any changes to indexation rates during the transition period.

  4. The Parties agree that:

    1. repayment of Intergovernmental Payments will be calculated based on the actual number of existing Northern Territory specialist disability clients that transfer to the NDIS, with payments arrangements consistent with paragraph 4 above; and

    2. The Northern Territory will provide the Budget Neutral Adjustment to the Commonwealth as an additional payment administered via the NDSPP, to be provided in even monthly instalments to NDIA over the transition period, as outlined in Schedule C: Future Arrangements for Budget Neutrality and Cross Billing in the Northern Territory.

  5. Repayment of funding under the SACS NP is subject to the extension of the current National Partnership, which is due to expire on 30 June 2016.

  6. The Parties agree that the Commonwealth will no longer provide Intergovernmental payments to the Northern Territory, relating to Specialist Disability Services, from 1 July 2019.

  7. The agreed annualised repayment by client cohort is outlined at Table 5:

Table 5: Annualised repayment of Intergovernmental payments for NDIS participants




2016-17

2017-18

2018-19

Other Existing - Non-Indigenous

$5,478

$5,720

$5,982

Other Existing - Indigenous 50-64

$8,103

$8,461

$8,849

Supported Accommodation

$25,661

$26,793

$28,023

Weighted Average

$6,706

$7,002

$7,324

  1. The estimated repayment of Intergovernmental payments is outlined at Table 6:

Table 6: Estimated Repayment of Commonwealth intergovernmental payments for participants




2016-17

($m)


2017-18

($m)


2018-19

($m)


Repayment of Commonwealth intergovernmental payments

$2.0

$7.5

$16.2

Budget Neutral Adjustment, via NDSPP1

$3.4

$3.5

$3.6

Total

$5.4

$11.0

$19.9

1Additional repayment of the NDSPP as outlined in schedule C: Future Arrangements for Cross-Billing and Budget Neutrality.

Cash and In-Kind Contributions

  1. The Parties agree to minimise in-kind contributions to the NDIS, and where possible cash out in-kind programmes to accelerate the transition from in-kind services to cash contributions. The Parties agree that where it is not possible to cash out programmes before they transition to the NDIS, they will:

    1. ensure that contracts with providers can be adjusted to facilitate the cashing out of programmes once the transition to the scheme has commenced, where reasonable; and

    2. consider whether the remainder of the contract can be novated to the NDIA and, where contract novation occurs, provide funding to the NDIA at the value of the novated contract on a monthly basis (or as otherwise agreed with the NDIA) until the contract terminates.

  2. The balance of cash and in-kind contributions during transition period will be finalised by June 2016 and included as a revision to this schedule.

  3. In-kind contributions during transition will be based on the current cost of delivering the services. The pricing and value of any in-kind contributions at full scheme will be separately agreed by June 2019.

Full scheme Arrangements

  1. If Northern Territory continues to provide in-kind contributions to the NDIS from Intergovernmental payments at full scheme, adjustments to funding arrangements will be made to allow the Intergovernmental payments to be ceased by 1 July 2019 and to ensure that overall funding to the NDIS is unchanged.

  2. It is expected that full scheme funding arrangements for the Northern Territory will commence from 1 July 2019. From 2019-20, Northern Territory will contribute its fixed $99.3 million (indexed at 3.5 per cent per annum) to the NDIS, but if the transition of existing clients into the scheme is not complete:

    1. the Northern Territory will recover from the NDIA all costs associated with existing clients who have not entered the scheme; and

    2. the Commonwealth may also make adjustments to its full scheme contribution to reflect ongoing support needs outside of the NDIS.

  3. Funding arrangements for full scheme also need to consider any changes for full scheme by governments arising from new policy design (such as quality and safeguards and housing), scheme experience and the 2017 Productivity Commission review of scheme costs.

  4. The parties agree that a funding mechanism for full scheme contributions will be agreed by March 2019 and will include details of timing and basis of payments.



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