Cocoon SDA Care owed millions by NDIS agency, as investors claim they have been left in lurch
An NDIS business told the Federal Court it had virtually no income and was owed “millions of dollars” by the Commonwealth, as investors in Specialist Disability Accommodation reveal they have also suffered “significant losses”.
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EXCLUSIVE: An NDIS provider which is under federal investigation and who has not paid some of its staff for weeks, has also left a swathe of investors in the lurch, it is alleged.
Some claim they have suffered “significant losses”, after signing up to Cocoon SDA Care franchise packages which promised a “guaranteed fixed income” of between $80,000 to $130,000 a year as passive investors in Specialist Disability Accommodation (SDA), designed for people with high support needs.
It comes as support workers in Victoria, South Australia, Queensland and the NT, looking after some of the most vulnerable people on the NDIS, say they have not been paid by Cocoon SDA for four weeks, leaving staff owed up to $6000, and forcing some to go to food banks to survive.
Most are now refusing to work any more shifts.
Staff are also alleging they have missing superannuation payments.
Horizon SolSolutions Australia Pty Ltd, trading as Cocoon SDA Care, blamed the National Disability Insurance Agency (NDIA) for delaying payments for services already delivered and took the government agency to the Federal Court on Tuesday.
Horizon SolSolutions’ legal counsel said it was unreasonable that the company had been waiting up to two months to be paid by the Commonwealth – leaving it a “very large millions of dollars” out of pocket – during an investigation into “unsubstantiated” allegations of fraud.
Payments are usually made within three days, it was argued.
The company’s counsel asked whether the point of unreasonableness would be “after the company goes broke” because it has expenses to pay but virtually no income.
As well as turmoil over pay and lost super, mum and dad investors have come forward to reveal how they invested hundreds of thousands of dollars into building specialist disability homes, only to find they were never tenanted, resulting in no income.
Cocoon SDA Care is still offering “opportunities”, on its website, including three franchising packages “built to suit any investor”.
“We pride ourselves on offering a guaranteed fixed income to ensure you are receiving return on your investment,” the website promises.
“All of our models are a completely passive investment, meaning we will manage everything once you invest with us.”
CEO of Ethical Property Investments Goro Gupta said there are whole streets of SDA in Melbourne with no-one living in them.
“Hundreds of people have signed contracts, but there are not hundreds of tenants out there,” he said.
“I have a good reputation in the industry, so I get four to five Cocoon investors a week coming to me asking me for help to sell, tenant or re-purpose these properties.
“I’ve had grown men come to me crying having lost their livelihoods.”
Principal Consultant Support Navigator James Loveday said banks have started “black-listing” areas with an oversupply of SDA, meaning investors have struggled to offload the properties to other NDIS participants or providers.
One investor alleged no-one had ever moved into his investment property leaving him suffering “significant losses”.
Cocoon SDA Care has been approached for comment about its investment promises.
An NDIA spokesperson said as this matter is before the courts, it is not appropriate for the agency to provide specific comment.“The agency may implement Manual Payment Reviews (MPR) when there are serious concerns about funding misuse or participant safety concerns,” a spokesperson said.
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Originally published as Cocoon SDA Care owed millions by NDIS agency, as investors claim they have been left in lurch
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