National Disability Insurance Scheme (NDIS)
In March 2013, National Disability Insurance Scheme (NDIS) legislation was passed by the Federal Government and the NDIS Act 2013 was established.
The NDIS provides support to people with disability, their families, and carers. The NDIS commenced with a trial phase on 1 July 2013, with the full scheme being progressively introduced across Australia from July 2016. The NDIS began operating in Western Australia from 1 July 2018.
The Australian Federal Government has legislatively committed to the NDIS with the SDA forming part of the legislated framework.
The scheme pricing is in place to stimulate growth in the market and the timeframe has been set at 20 years for any Investor who decides to participate.
Specialist Disability Accommodation (SDA) refers to accommodation for people with a disability who require specialist housing solutions to assist with the delivery of supports that cater for their extreme functional impairment and/or very high support needs.
SDA needs to be available in a variety of locations reflecting the diversity of participant preferences. Where people live is important to connections to family and community, including employment, services and study.
Within the National Disability Insurance Scheme (NDIS), SDA is a type of support (funding) that is provided to some participants. The federal government’s SDA funding is provided to participants who require a specialist dwelling that reduces their need for person-to-person supports. This demand is also for younger participants that may be living in an unsuitable home or in aged care.
The Federal Government has committed funding of $700 million per year to SDA for 20 years. This provides investment security and new high-quality SDA for participants.
Specialist Disability Accommodation
Supply and demand
In 2016 the NDIS estimated that 28,000 people would be eligible for SDA nationwide. This was based on 6% of an expected 460,000 people with NDIS plans. The number of people being approved for NDIS plans and the percentage of those people being approved for SDA has resulted in updated predictions of over 500,000 total participants and more than 60,000 people requiring SDA. The government has budgeted over $700m to be spent on SDA
payments this financial year.
On 30 June 2019, some 13,309 participants (4.5 per cent of all participants) had SDA supports in their plans, with the total number of SDA participants increasing by 7.7 per cent in the previous quarter and 50.3 per cent in the previous year. It is important to note that there is no cap on the number of SDA participants and all participants that meet the requirements will receive SDA funding.
The SDA scheme has been designed to address the chronic undersupply of suitable high-quality housing for participants and as a result supports a new form of capital funding that provides an income stream to an investor who has constructed or purchased a SDA property. Driving the scheme forward it is open for any Investor seeking the potential for very attractive gross investment yields in the region of 8-15% Nett5, through positive ethical and socially responsible investment, all while retaining the capital benefit that residential housing provides.