The introduction of the NDIS has been welcomed by most Australians. Giving choice and control over to people with disabilities and their families/carers in terms of what supports and services they purchase to live meaningful lives in the community is well overdue.

However, people who are currently supported by psychiatric disability support services have some concerns about the NDIS, even though it is projected that approximately 57,000 of them will be supported by the scheme nationally. Their concerns stem primarily from the definition of psychiatric disability in the NDIS legislation and its focus on life-long impairment. The definition does not seem to take into consideration the fluctuating nature of mental illness and that the trajectory for a person with severe and persistent mental illness may be somewhat different from that of a person with, for example, a permanent physical disability. Additionally, based on the experiences of some people with mental illness in the launch areas, it appears that more work needs to be done on the psychiatric disability assessment tool, as well as on training NDIA staff to administer it, and on increasing their overall understanding of the fluctuating nature of mental illness and associated impairment.

Even if these concerns are addressed, it seems likely that some people with mental illness who are currently supported by psychiatric disability programs will not qualify for support through the NDIS. It is not clear what other community-based mental health support services will remain available to support these individuals, their families and their carers, and whether/how such services will be funded to meet the potential increase in demand.

Non-government organisations (NGOs) that currently receive block funding to support people with psychiatric disability also have a range of concerns about the NDIS. It appears that most existing block-funded programs – such as the Commonwealth’s Personal Helpers and Mentors (PhaMs) and Queensland’s Housing and Support Program (HASP) – will be in scope for the NDIS. This is likely to mean that the current funding for these programs will be ’dropped‘ into the NDIS funding pool, and that people currently supported by them will have to apply and be assessed for support through the NDIA.

This will have significant implications for block-funded NGOs in terms of not only how they attract clients to purchase services from them, but also how they ‘keep the front door open’ in the meantime, with no or at best minimal block funding. It seems likely, for example, that the loss of block funding will mean that many non-government psychiatric disability service providers will be obliged to transition most of their current contracted support workers to a casual pool – with obvious implications for the workers themselves. Clients and their families and carers will shop around for services, comparing quality, prices and outcomes, while agencies jockey to highlight their points of difference.

Additionally, it is anticipated that the larger NGOs will benefit from both economies of scale and income generated from large capital portfolios and/or other sources, enabling them to ’keep the front door open‘ longer than smaller agencies. International experience indicates that organisations may need to have a budget of $50 million plus and a considerable income-generating capital portfolio to be viable in this new environment. Smaller organisations are in danger of disappearing or being forced into mergers and acquisitions.

Even before the introduction of the NDIS, mergers and acquisitions had commenced within the sector, and to date we have seen some major organisations merge – for example, PRA and Richmond in NSW – and some smaller organisations acquired by larger ones – for example, Mental Illness Fellowship of North Queensland acquiring Mental Illness Education. This trend seems to be heating up particularly as a result of the introduction of the NDIS and the individualised/self-managed funding approach. However, it is also to a large degree due to new government tendering processes across the country, which encourage consortia to apply. The consortium approach is designed to rationalise the number of NGOs funded. For example, in the recent Victorian mental health NGO tender process it was explicitly stated that no more than three agencies will be funded per catchment area. Similarly, for the Partners in Recovery initiative the Commonwealth requested one consortium tender per Medicare Local area. Mergers, acquisitions and consortia all have significant implications for what the mental health community sector will look like in the future and which NGOs survive the shift from block funding to individualised/self-managed funding.

It is evident that as we move forward mental health NGOs will have to invest a great deal of time, effort and resources in shoring up their sustainability. With the introduction of the NDIS, this will require a move away from the old charity and welfare models to business models of operation, and a different type of leadership at the Executive and Board level to reflect this move. It will also require the ability to generate income from various sources; enhanced finance, human resource management, and client information systems; different workforce employment conditions; a considerable investment in developing, marketing and maintaining positive points of difference; and the skills, knowledge and experience to engage successfully in mergers, acquisitions and consortia.

There are early indications that, despite the challenges, the mental health community sector will transition successfully to the new NDIS environment and potentially thrive as a result of the investment of additional resources into psychiatric disability support services. Potentially the sector will grow as we see more out-sourcing of government services to the non-government sector – such as all disability services in NSW, social housing to community housing in a number of jurisdictions; and in Queensland a range of government services, including mental health services, as identified in the Queensland Commission of Audit Report. The transition to the new environment may be bumpy at times, but it will also provide great opportunities, especially if we can actively participate in it and shape it. If the mental health community sector can actively participate in the current changes, they can help to ensure that these changes are in fact about improving the quality of life for people with psych disability/mental illness. Changes that actually achieve this are well justified and should be embraced.

Ivan Frkovic is the National Operations Manager of Aftercare. Visit their website here.

For further information on the NDIS visit the DisabilityCare Australia publications page here.