Funding crisis looms as mentally ill robbed in NDIS shift

At least $3 billion in mental health money will be “lost” as part of the National Disability Insurance Scheme rollout.

Federal Health Minister Greg Hunt.

At least $3 billion in mental health money will be “lost” as part of the National Disability Insurance Scheme rollout, either because the $22bn behemoth has soaked up available money or it has been used as an excuse to wind back other support.

Money that once helped hundreds of thousands of people has been earmarked for the 64,000 people with severe mental illnesses in the NDIS, while old state and federal programs have been closed to new entrants, ­barring people not just from the disability scheme but from existing support.

An analysis by The Australian of the opaque deal-making ­between the states and the federal government has revealed the ­extent of the looming crisis in the sector.

Mental Health Australia chief executive Frank Quinlan says the nation is “at risk of funding an oasis in the middle of a desert”.

The ACT government has ­already moved its entire $4.1 million mental health budget, which includes 21 programs delivered by 12 providers, to the NDIS.

Victoria’s annual $80m of services are also being moved to the disability scheme.

In the rush to sign states up to Julia Gillard’s major policy legacy, the federal government allowed each government to liquidate an array of programs, turning them into a “cash” contribution for the NDIS.

During these negotiations, the states agreed on the top-level cash and “in-kind” resources they would contribute to the rollout without being required to specify what programs would be scrapped and which they would continue to fund.

It is this uncertainty that, ­almost four years on, threatens the future of support for tens of thousands of people.

The Australian previously ­reported Ms Gillard’s legacy has been lashed by Beyondblue, the mental health charity she will soon chair, for setting up a regime where the mentally ill will be robbed to pay for the disability ­reform.

In one example, the Queensland government has begun “transitioning” a $10m housing program for the dangerously mentally ill — those who risk hurting themselves or others — to the NDIS less than a year after it tried to pull funding altogether.

The state wrote to service providers and their families last June saying the health budget had been “fully committed” and threatened to boot schizophrenics and other sufferers out on the street with a week’s notice and no Plan B.

The government reinstated the program after The Australian highlighted the issue but has now found a new way of getting the funding off its books.

Not everyone from the housing program will make it into the disability scheme, creating a service gap that has become the core of concerns about future ­stability in the sector.

Under current funding, about 100,000 people who previously received individual support for their severe and profound mental illnesses will not be eligible for the NDIS but also lose access to existing programs.

“It is expected the majority of these Housing and Support Program clients will transition to the NDIS by 30 June, 2019,” a spokesman for Queensland Health said.

The state’s community-­managed mental health program, previously funded to the tune of almost $25m a year, is also the subject of transition to the disability scheme.

The federal government has long flagged it will transfer its own mental health programs into the disability scheme, including the $200m annually it provides for the Personal Helpers and Mentors project and carer respite.

Partners in Recovery, a five-year $550m program, will also fold into the NDIS.

The eligibility guidelines for these services have changed and, from July, only people eligible for the NDIS will be able to use them.

The way these programs phase into the scheme with a medley of other state-based services is complex and constantly shifting.

The Mental Health Coalition of South Australia has tried to unpick this policy chaos in South Australia and found a gap of ­almost 5500 clients across state and federal programs.

Another 1573 who manage to gain access to the NDIS will not have access to rehabilitation support options.

This figure will grow because the NDIS numbers are only projected to rise with population growth.

Western Australia’s new Labor government has not ­decided on what programs it might transfer into the scheme. Further, new Disability Services Minister Stephen Dawson saidthe former Barnett government deal may not go ahead at all.

That deal committed the state to a locally run version of the ­national scheme with key differences and massive administrative overheads.

“It was inappropriate and ­irresponsible for the previous government to sign the deal on the eve of the caretaker period,” Mr Dawson said. “At this stage, the state government is considering its options and will make a ­decision in the coming weeks.”

The NSW government is alone among states and has not raided mental health programs to fund the NDIS, although others such as Tasmania and the Northern Territory have not made final decisions about the makeup of funding.

Health Minister Greg Hunt did not respond to a request for comment.