Cash for care under the NDIS: Shaping care workers’ working conditions?

Cash-for-care schemes in social care policies

A trend towards the inclusion of cash-for-care schemes in adult social care systems largely reflects a common response to the pressures of meeting increasing care needs as populations age and more women are in the labour force (Colombo et al., 2011). However, such schemes are diverse and reflect different underlying ideas about care and care work (Brennan et al., 2012; Da Roit and Le Bihan, 2010).

Cash-for-care has its origins in the independent living and disability rights movements of the 1980s and 1990s, which sought new systems of support based on individuals’ lifetime goals and strengths (Simon-Rusinowitz and Hofland, 1993). The objectives of increasing autonomy and empowering care users through enabling them to have greater choice, flexibility and control over services they receive are central to many schemes, reflected in the terms ‘consumer-directed’ care, ‘personalisation’ and ‘self-directed support’ (Ferguson and Lavalette, 2014: 27).

Cash-for-care works to ‘marketise’ care systems as part of broader shifts by governments to adopt market mechanisms to achieve choice, control and efficiency through competition (Brennan et al., 2012). This market logic has seen contracting out of publicly provided services and the entry of for-profit providers in social care markets in many developed countries (Cunningham and James, 2011). Individual care users are constructed as consumers empowered through the exercise of consumer choice to buy care (Brennan et al., 2012: 378).

Along with increasing independence and choice and developing markets, another common explicit or implicit policy aim of cash-for-care is the recognition of informal carers, or the fostering of familial care (Da Roit and Le Bihan, 2010: 287). A move away from institutionalised care to home-based and informal care provided by family and others is a response to the expressed preferences of care users and often has strong community support (Boxall et al., 2009; Colombo et al., 2011). This move can also be a strategy for containing care costs, often the other driving motivation for the introduction of cash-for care schemes (Ungerson and Yeandle, 2007a).

Regulation, family and informality in cash-for-care

While cash-for-care schemes can potentially improve care systems, they also produce changes in the labour market and organisation of paid care and support work. Cross-national studies suggest three main factors interact to shape better or poorer outcomes for workers: the extent to which cost containment underpins the scheme design; the regulation and monitoring of care delivery; and the regulation of care employment.

Cost containment is particularly important for understanding how cash-for-care schemes might shape care work labour markets and care workers’ conditions of work. While there are a number of ways in which schemes support cost containment, all are underpinned by a shift from institutional provision to in-home provision of care. First, home care is cheaper and seen as more effective than care in a residential setting, with the care user remaining largely responsible for accommodation and living costs. Second, home care allows greater access to additional unpaid care provided by informal carers – such as family and friends – than the relatively more expensive care provided in an institutional setting. Third, cash-for-care schemes that allow relatives to be ‘employed’ as carers function to further ‘embed’ and ‘retain’ informal care (Ungerson and Yeandle, 2007b: 189). The argument here is that the schemes act to enlarge the pool of low-cost labour available to provide care. Finally, cash-for-care schemes can shift organisational and employment overheads away from the state and onto individual care users. They may also free public agencies from the costs of managing risks to the care user (Ungerson and Yeandle, 2007b).

The regulation and monitoring of care delivery is the second factor that can vary in cash-for-care schemes and impact on care workers’ pay and conditions (Ungerson and Yeandle, 2007b). The regulation of care delivery includes care standards and care worker qualifications. The third factor, the regulation of care employment, includes taxation, working hours, conditions, wages and social protection. Based on their cross-national study, Ungerson and Yeandle (2007b) concluded that a system combining relatively weak regulation of both care delivery and care work, and in which relatives are able to be employed as care workers, is likely to encourage the development of a large low-paid and informal care work labour market.

Similar conclusions are drawn by Da Roit and Le Bihan (2010) based on their European cross-national study of cash-for-care. Quality of care and of care work become issues where consumers have a high degree of choice of worker and there is a lack of external control and monitoring of care labour and outcomes. Further, where previously unwaged informal care work is commodified (i.e. family members are employed as paid carers), boundaries between unpaid and paid work become blurred. This study suggests a significant issue is the extent to which some schemes promote the growth of informal, undocumented and unprotected care workforces. The worst outcomes for paid care workers were found to be where long-term care systems are based on poorly-regulated cash-for-care transfers. Such schemes, present in Austria, Italy and Germany, explicitly rely on ‘the care, organizational capacity, and monetary contributions provided by families’ and implicitly rely on ‘an unregulated and low-quality care market’ as a partial substitute for this care (Da Roit and Le Bihan, 2010: 307).

Notably, poor outcomes have also been found for care workers under the United Kingdom (UK) direct payments scheme of social care for older people, despite this scheme being ‘a relatively regulated policy development which has sought, from the outset, to enable care users to employ their care workers or personal assistants in ways which are consistent with UK employment law’ (Yeandle and Stiell, 2007: 104). Negative impacts in relation to job quality, income security, working time security, health and safety, skill development and representation have been identified under UK direct payments and later personal budgets schemes (Cunningham and Nickson, 2010; Glendinning, 2012; Hussein, 2011), with the situation apparently worsening following recent austerity cuts (Hussein, 2014).

The comparative studies of cash-for-care provide some useful parameters and markers for our analysis of likely prospects for disability workers’ employment conditions under the NDIS. Specifically, they point to three factors: cost containment – and the role of informal employment in containing costs; the regulation of care delivery; and the regulation of care employment as significant in shaping outcomes for paid care workers.

The disability care and support system and workforce

Inadequate resourcing of the disability support system has underpinned poor job quality, underemployment and other insecurities for the low-paid care and support workforce in Australia. Service provision has largely been the responsibility of state and territory governments under the Commonwealth State and Territory Disability Agreement (CSTDA) (Australian Government, 2014). Since the 1970s policies of deinstitutionalisation have led to the closure of many, but not all, large government-run institutions (MacKinnon and Coleborne, 2003; Wiesel and Bigby, 2015). Today the vast majority of disability services are provided by NFP organisations, mainly church-based charitable bodies, and other small service providers. For the most part, providers have received block funding in advance to provide services including accommodation support and community access; respite and employment services; and information and advocacy. There has been some individual funding in place under pilot and other arrangements and, in 2006–2007, just over a quarter of disability support packages provided through the CSTDA were individual funding packages (Fisher et al., 2010: 10), mainly in a much more limited form than is possible under the NDIS.

Most disability services providers received 60–80% of their income from government with the remainder coming from philanthropic contributions, commercial activities, investment and other sources (PwC, 2012: 15). Alongside the broader problem of underfunding of services in relation to the needs of people with disability (PC, 2011: 135–390), there has been widespread underfunding of organisations for the provision of contracted services (i.e. funding is inadequate for provision of the services specified in government contracts) (PC, 2010: 281).

The disability care and support workforce includes managers, health and social professionals, and the non-professional personal carers, home care workers, community care workers and other support workers. Martin and Healy (2010: 109–121) provide a disability workforce profile of an estimated 68,700 employees, with 73% in the NFP sector, 21% in the public sector and 6% in the private for-profit sector. Most are direct care and support workers and over 80% are women.

Non-standard employment is the norm for direct support workers, with over 55% employed part-time and a further 31% employed as casuals – a total of 86% in non-standard employment compared with 50% of the Australian female workforce (Martin and Healy, 2010: 113). Some work is very short-hours work and there is a high level of multiple job-holding, suggesting inadequate hours may be a problem for workers (Martin and Healy, 2010: 120).

The minimum pay and conditions set out in the Social, Community, Home Care and Disability Services Award (SCHCDS Award) apply to disability workers. The Award specifies somewhat different conditions for disability and other care workers who are employed as ‘home care’ rather than ‘disability support’ or other community services workers. For example, casual disability workers who are classified as ‘home care’ workers have a minimum engagement period of only one hour compared to two hours for workers classified as ‘disability support’ workers. Further, the pay increases arising from the successful 2012 social and community services equal pay case – which recognised the gendered undervaluation of care work – do not apply to home care workers (Charlesworth, 2012).

What changes with the NDIS?

The NDIS introduces a national system of support for ‘people with permanent and significant disability, their families and carers’ in place of the variety of disability support and some of the mental health services that have been administered by the states (NDIS, 2013). It entails a significant increase in funding for disability support, estimated to be $8bn annually at full implementation, of which 40% is to come from a Medicare levy increase (Coorey, 2013; Swan, 2013).

A person’s support needs are determined by a professional assessment with a subsequent budget allocation made. The person can choose to have the National Disability Insurance Agency (NDIA) manage their funding while they choose their preferred service providers, they can opt to manage their funding and arrange their own supports, or they can appoint a person or organisation to manage their funding and supports (NDIS (Plan Management) Rules 2013).

Under the NDIS, eligible people with disability may have access to a much wider range of care and support options than they would have had previously and some of the significant benefits are intended to be greater choice and control to determine not only what service is provided, but also how, when and by whom. For example, before the NDIS, a person might attend a specialist day activity service for people with disability. Under the NDIS, they may choose to be supported to attend their local gym or swimming pool and participate in ‘mainstream’ community activities (NDIS, n.d.a). In relation to home-based care and personal support services, a person whose personal assistance (e.g. with showering or dressing) was scheduled by their service provider to fit in with service provision to multiple clients can now choose a service provider who will provide assistance at their preferred time (NDIS, 2014b). Alternatively, the person may choose to directly employ their own workers. So, while some paid disability workers will remain employed by NFP organisations, others will find employment with for-profit firms that enter the market, and some will be directly employed by or contracted to individuals with disability or their families (PC, 2011).

So, how might these changed arrangements impact on the paid disability workforce? In presenting our research findings, first we explore the considerations given to workforce issues and to risks for workers in the planning and design of the NDIS. We examine the Productivity Commission’s report of the national inquiry, paying attention to the factors identified in the international literature: the regulation of care employment (and the role of informal employment), the regulation of care delivery; and cost containment. Second, we consider the evidence relating to these factors and to impacts on workers in the implementation of the NDIS, drawing on publicly available documents and our own research interviews.

The Productivity Commission’s assessment of risks for the workforce

At the end of an extensive public inquiry, the Productivity Commission recommended a publicly funded system of ‘reasonable and necessary’ ‘individually tailored’ supports for people with significant and enduring disability (PC, 2011: 66). Among the Commission’s considerations were the likely impacts of self-directed funding on disability workers and the question of individuals employing family members.

The Commission identified a lack of research examining outcomes for the direct care and support workforce in cash-for-care systems. While noting ‘the significant body of UK evidence (that) has drawn attention to the potential for lower wages and some other adverse consequences for people employed under self-directed funding’, the Commission’s Report dismissed much of this evidence, stating ‘the results are often ambiguous or likely to be unreliable’ (PC, 2011: E25). The Commission pointed out that studies reporting low wages or inadequate pay: (i) relied on small numbers of respondents (Frontier Economics, 2006; Leece, 2010); (ii) might have (wrongly) assumed the same employer obligations in relation to part-time short-hours employees as for full-time employees (Davey et al., 2007); or (iii) might have recorded worker perceptions of low pay and inadequate training that reflected a general perception in the industry (Adams and Godwin, 2008). However, authors of another review of much the same body of UK-based research reach a quite different conclusion. While also noting the limited evidence base, Cortis et al. (2013), in a report commissioned by the Australian trade unions representing disability workers, conclude the evidence supports a view that, under individualised funding, many of the risks associated with increased flexibility are passed from organisations to workers and that the risks associated with contracting and direct employment are substantial. As we noted in our earlier discussion of the international findings, UK research has also identified multiple negative impacts on workers’ pay and conditions under direct payments and personal budget schemes (Cunningham and Nickson, 2010; Glendinning, 2012; Hussein, 2011, 2014).

The Commission’s (PC, 2011: 359) conclusion that ‘employed support workers generally get better outcomes, though this is not uniform’, relies mainly on research findings from the USA relating to workers’ subjective feelings of happiness or satisfaction in their jobs. While reliance on such findings can be criticised on the grounds that satisfaction is relative to norms and expectations and reveals little about whether or not a system provides quality jobs (Watson, 2005), there are other reasons why the USA-based studies provide an inadequate comparator for the NDIS context.

The Commission reports on the findings of three evaluations of the USA Cash and Counseling program. However, along with positive findings of greater satisfaction and one finding of higher wages (Dale, 2005, cited in PC, 2011: E.28), there were also mixed and negative findings including lower wages (PC, 2011: E27), less satisfaction with pay (Benjamin and Mathias, 2004: 483) and working more unpaid hours (Dale et al., 2004). Further, a significant aspect of the USA program is that most paid workers are relatives of the people with disability who employ them (Foster et al., 2007: 522). Only one study cited by the Commission distinguishes between employed carers who are relatives and those who are not. In this study, up to a quarter of the non-relatives knew the person to whom they provided paid care prior to becoming their employees (Foster et al., 2007), suggesting this program may not be the most appropriate basis for assessing likely impacts on the Australian disability workforce. The Commission also cites a single Australian study as supporting its positive assessment of prospects for disability workers. This is an evaluation of the New South Wales Attendant Care Pilot involving just 10 people receiving self-funded care, in which it is reported only that ‘many of the attendant carers have experienced increased pay and conditions in their new care arrangements’ (Fisher and Campbell-McLean, 2008: 29).

The Commission’s Report barely engages with the broader research literature highlighting the vulnerability of workers performing paid care and domestic work in households. The exception is in a discussion of low pay and fragmented work as impediments to recruitment and in recommending the adoption of an immigration program for care and support workers ‘in the event of acute and persistent (labour) shortages’ (PC, 2011: 720). In pointing to the Canadian Live-In Caregiver Program as a model (PC, 2011: 720), the Commission acknowledged that there had been some abuse of caregivers. The Commission makes no reference to any potential problems with low-paid care workers being in self-employed or independent contracting arrangements.

The Productivity Commission on regulation, family and informality in the NDIS

The Commission did not envisage the NDIS would rely heavily on informal work or include the employment of family members, although this is to be trialled (PC, 2011: 725). However, there is some focus in the Report on the role of informal work as a substitute for formal employment and as a means of containing costs. In discussing the legal issues associated with self-directed funding, the Commission’s focus on employment issues is squarely on employment obligations as a potential barrier to the take-up of self-directed support and on where and how people with disability engaging their own workers might be able to be exempt from such obligations (PC, 2011: F.1–F.4). The Report’s strong message is that a measure of the success of the NDIS will be the extent to which individuals take up the option of managing funding themselves. While a strong take-up may indicate people with disability are able to exercise choice, the Commission also looks to the take-up of self-directed support to keep wages down and to ‘partly address anticipated workforce shortages by drawing the so-called “grey” market of family, friends and neighbours into the pool of people who can provide support services’ (PC, 2011: E.24).

The Commission thus appears to anticipate and sanction some informalisation of paid direct care and support work, while paying little attention to potential negative outcomes for workers. For example, the possibility of direct care and support workers being engaged as independent contractors is considered in a discussion of how people with disability might be able to minimise employment obligations (PC, 2011: F.2). Elsewhere it is suggested that ‘(i)n many instances, self-directed funding would involve no superannuation, tax withholding or OH&S obligations’ (PC, 2011: 379). Among the examples of such instances – along with a neighbour sometimes driving a person to a gym class or mowing their lawn and an adolescent babysitting a child with disability – the Productivity Commission includes:

a support worker [who] provides an average of 10 hours of care a week in the home of the person with a disability, but with the amount of work and the times when it takes place varying with the needs of the person with a disability. (PC, 2011: 140)

In relation to the regulation of care delivery, the Commission proposed some oversight by care coordinators, along with easy access to police checks on workers and capacity for people with disability to have complaints of inappropriate behaviour by service providers investigated (PC, 2011: 74–75). The Commission recommended against a qualifications requirement or compulsory training for direct care and support workers (PC, 2011: 693). This is despite the fact that almost 80% of the current workforce has some form of training, mostly either a Certificate III or IV (Martin and Healy, 2010: 126–127).

The NDIS has proceeded largely in keeping with the Commission’s vision and recommendations. As we outline in the following, there are no particular safeguards built into the new system addressing work quality and there is some early evidence of pressures eroding working conditions. In addition, we find that the light touch regulation of care delivery and a focus on containing costs may also serve to undermine care workers’ pay and working conditions.

Containing costs in a competitive market

Additional government funding under the NDIS will expand service provision to provide much-needed supports to people who have previously not had – or have had inadequate – services and supports (PC, 2011). However, the advent of the NDIS does not mean particular care and support services will be better-funded. Indeed, existing service providers face major financial challenges under the NDIS pricing structure as they make the transition to the competitive system (Green and Mears, 2014). A key issue for many providers may be lack of organisational capacity to participate successfully, not only because of their small size but also because of the legacy of government under-funding (PC, 2010: 281). Despite assurances from the NDIA that service providers will be supported to make the transition to the new system (NDIS, n.d.b), the viability of small providers in particular remains in doubt (Lannen, 2014). With funding allocated to individuals, providers face much less certain and potentially reduced income (National Disability Services (NDS), 2013). Reduced ability to provide security of employment to what is already a highly casualised and part-time workforce may well be one consequence, as suggested by service providers in our interviews, discussed later.

Under-funding of services continues under the NDIS. In particular, the prices set by the Commonwealth for the highest volume supports of ‘one-to-one assistance with self-care activities’ and ‘assistance to access the community’ are considered by NDS, the main body representing NFP service providers, to be too low, even after a review and price increase in 2014 (NDIS and NDS, 2014: i). Both of these types of supports are provided by the low-paid non-professional direct care and support workforce. An additional problem is that prices are set at one level despite the range of levels of complexity of care required. CEOs and senior managers in large and small organisations told us they could not afford to provide direct care and support services with the level of funding they received under the NDIS. As outlined in the following discussion, providers found the pricing structure did not adequately account for the costs of supervision, professional development and training, or administration. Indeed, some argued the price was too low to enable them to employ direct support and care workers in compliance with the SCHCDS award. The comments of this CEO of one large organisation are typical of service providers we interviewed:

We’re rock solid around the principles [of individualisation] and we, most of the disability sector, would be behind [worker] qualifications and decent pay but it’s not possible to deliver [personal care] with qualified supported staff at these prices. (Vicprovider1)

Regulating for quality care?

An initial assessment suggests a combination of minimal regulation, more variable patterns of demand and tighter funding is placing pressure on service quality under the NDIS in the trial sites. To date, the regulation of care provision under the NDIS appears relatively light-touch. A provider of support and care must be registered with the NDIA only if a person with disability has their funding and support managed by the NDIA. However, if a person manages their own funding, the NDIS places no restrictions on who can provide services. This is also the case where a person’s funding is managed by a third party ‘plan management provider’, although this provider must be registered (NDIS (Registered Providers of Supports) Rules 2013). While the criteria for registration include considerations of the provider’s relevant experience and qualifications, for care and support workers there are no qualification requirements (NDIS, 2013). A quality and safeguards framework is still to be implemented, but it is not anticipated that this will include any qualification requirements for these workers (NDIS, 2015)

The five NFP disability service providers interviewed in the Victorian NDIS trial site were attempting to deal with significant immediate changes under the new arrangements while also trying to anticipate and plan for the full implementation of the new market. Some providers reported they had responded to increases in demand at peak times by recruiting, as the regional manager of one large service provider organisation put it, ‘anyone standing’. The same manager said ‘we are losing staff to other industries … Some have gone to aged care facilities, the pay is lower but they’re going for the security’ (Trial site provider 3). This manager, along with three others in organisations of different sizes, anticipated his organisation would need a larger ‘more flexible’ workforce to provide the same level (but more diverse) services under the NDIS. For example, another executive manager of an organisation providing home-based services told us:

[t]here have already been lots of one hour shifts, lots of travel time. We’ve got staff working 15 hours to get 8 hours’ pay, and they’re running their own vehicles. . . .We try and have shifts backing on to each other but it’s not always do-able. (Trial site provider 4)

Employment regulation and impacts on care workers

Under the NDIS, there is greater diversity – and also often less predictability – in the type, timing and settings in which disability care and support is provided. Many of the immediate challenges to providing jobs with decent pay, predictable hours and job security for direct care and support workers arise from this increased diversity and unpredictability.

Several providers – large and small – reported increased reliance on casual staff, including as a strategy to manage more frequent roster changes which require notice time or consultation when involving permanent staff. Increased use of casual staff was also a response to difficulties providers experienced in giving employees certainty of total weekly work hours and of start and finish times, also requirements for permanent employees under the SCHCDS award. One union representative reported some organisations were classifying employees as home care workers where previously they would have been classified as disability support workers. The apparent reason for this was the reduced minimum period of engagement for home care workers under the award compared to other employees.

These accounts from early experiences in the Victorian NDIS trial site resonate with provider experiences reported by the peak NFP provider body, the NDS, from their consultations across all the NDIS trial sites. Among the workforce implications identified by the NDS are ‘increasing back office [work], more casuals employed, different types of workers employed, disputed relevance of formal qualifications, increased demands of staff, less ability to offer training and professional development, weaker supervision [and] increasing workplace health and safety risks’ (NDS, 2014: 1).

Some service providers interviewed called for greater ‘flexibility’ through changes to the SCHCDS award and also for the abandonment of existing enterprise agreements, which provided some above-award conditions such as travel time. These calls are illustrated by comments from two trial site service providers:

The existing sector awards just don’t match the flexibility the clients want … There was pressure to pay staff for two hours and that’s in our new [enterprise] agreement. However [the agreement] hasn’t gone through yet so we’re still able to have one hour shifts at the moment which is what we need. Unless awards are more flexible and funding increases we won’t be able to do it. (Trial site provider 5)

The ideal would be to be a new player in the market and not to have the millstone of the current workforce and their conditions round our neck. (Trial site provider 2)

Some of the most immediate concerns of the CEOs and managers interviewed were with the challenges of providing services in compliance with award conditions and with how greater flexibility might be gained through changes to industrial arrangements. However, several also raised concerns about operating in a market in which first, as employers, they have obligations that do not apply to others (e.g. in situations of direct employment or contracting of workers); and second, in which it appears some providers and service users are not complying with employment regulation. To illustrate, one CEO said his organisation had not proceeded with a proposed partnership with a labour hire agency as the agency employed disability support workers under less favourable attendant care award conditions (Trial site provider 1), with similar concerns raised by providers consulted by the NDS (2014).

Service providers, a union interviewee and a disability advocate reported that people with disability and some provider organisations were engaging direct care and support workers as independent contractors, sometimes with pay and conditions that undercut the award or did not comply with occupational health and safety or other regulatory requirements. They also reported that engagement of workers as independent contractors was not uncommon under an existing Victorian individualised support scheme, although there is no reliable data on the proportion of that workforce who work as independent contractors. An issue here may be the limitations and weakness of the regulation of independent contracting. While sham contracting is illegal under federal employment regulation, the invisibility of work performed in the home and the complexity of determining the legality or otherwise of any contracting arrangement make it very hard to ensure that workers are not coerced into independent contractor arrangements (Roles and Stewart, 2012). Further, this legislation does little to protect low-paid contractors from the high levels of risk and insecurity associated with this work arrangement (Johnstone et al., 2012).

Other gaps in employment regulation may be exploited, as illustrated by an example provided in a direct employment guide for people with a disability (My Place, 2013). Where a person manages their own funds and directly employs or engages a worker to provide personal or domestic support in their home for 30 or fewer hours a week, there is no superannuation guarantee payment made for the worker under an exemption for people employed by a householder ‘to do work wholly or principally of a domestic or private nature for not more than 30 hours per week’ (ATO Superannuation Guarantee Ruling SGR 2005/1). As suggested in the employment guide, a person with disability can structure their care and support so that it is provided by multiple part-time workers rather than a single worker so that these exemptions apply (My Place, 2013). Notably the NDIA does not discourage individuals and their families from engaging care and support workers as independent contractors. Indeed, the NDIS information on employing support workers states workers ‘can generally be engaged as employees or as independent contractors’ (NDIS, 2014a). The NDIA has no oversight of service provision contracts where people manage their own funds.