13 Jul 2020

Carers dismayed by new disability funding model

7:46 am on 13 July 2020

The government is quietly scrapping the controversial policy which pays family members to care for a disabled relative but the alternatives are being criticised as just as confusing and bureaucratic.

A mother pushes her adult daughter around a shopping mall in a wheelchair.

The current scheme requires disabled people to be the employers of their carers. Photo: RNZ / Claire Eastham-Farrelly

Introduced in 2013, Funded Family Care (FFC) has been fraught with problems, including requiring the disabled person - who often lacked mental capacity - to be the employer.

But the new system is already under fire.

At the end of May, the Ministry of Health wrote to disabled people telling them FFC was being disestablished and they had until the end of July to accept either Individualised Funding (IF) or their family carer could be employed by one of 50 Home and Community Support Services (HCSS) providers.

Individualised Funding or IF is essentially a fortnightly allowance that covers a set number of support hours.

The disabled person with high/ very high needs is the budget-holder and therefore the employer. They set the hourly rate according to the terms of the Care and Support Workers (Pay Equity) Settlement Act 2017. The employer can pay over the pay equity rate, but will receive fewer support hours.

The disabled person manages their annual budget through one of nine IF Hosts, who help set up the employment relationship and oversee the spending. If a disabled person needs help managing their IF funding for things like payroll, tax and other employment issues, they must pay for it out of their IF budget.

The alternative is for the parent or spouse to be employed by a home and community support service, or HCSS provider.

There are 50 such providers, but some are refusing to take on families because they recognise the arrangement lacks the direction and control required in any employment relationship.

Both IF and HCSS have been around since the 1990s and are often referred to as "legacy" models.

Changes to FFC Employment Agreements

Changes to FFC Employment Agreements Photo: RNZ

The chief executive of Carers NZ - which represents 50,000 people and organisations - admits the decision to scrap FFC took them by surprise.

Laurie Hilsgen says they have worked closely with successive governments, including the current one, developing the new Mahi Aroha - Carers' Strategy Action Plan, which FFC was part of. She said they would have expected a heads up FFC was stopping.

Carers NZ is still working its way through hundreds of phone calls they've had from families asking for help. And those who have tried to navigate the system have found it difficult.

"They've had to get specialist advice from accountants and business advisers to decide if they would be an employee, or if they would be a contractor or self-employed. People really need this kind of information to make this decision about how they are going to be paid. So it feels a bit horse before the cart," she said.

Independent disability advocate Jane Carrigan said it wasn't just parents who were confused.

"There's no pamphlets, there's no explanations. It's not just the parents who are confused, the (IF) Hosts that are an agent of the Disability Support Services and are supposed to act as the middle man, in this so called employment relationship, they have no idea what they are doing. The HCSS service providers are struggling to understand what's going on," she said.

Carrigan says she has parents who are so upset, they're begging to go back onto Funded Family Care.

"Individualised Funding is spruiked as being the marvellous panacea for allowing people to manage their own lives and it is just so far from the reality. And the notion of going and working for an HCSS service provider brings with it a whole range of industrial issues, none of which DSS has given any thought to."


Disability advocate Jane Carrigan

Independent disability advocate Jane Carrigan says parents are so concerned about the proposed changes, they want to go back to the old system. Photo: RNZ / Ana Tovey

Pay rates funded differently

Then there's the question of the pay rates; both options are funded differently. IF Hosts receive $31.23 an hour, but the family carer receives much less than that.

Under the terms of the pay equity settlement, the hourly rate is based on formal qualifications and paid experience. As most carers lack qualifications - they're too busy looking after their disabled person - and have cared for their family member while on a benefit, they are only eligible for the lowest hourly rate of $20.50 (gross) an hour.

Changes to Family Carer Pay Rates

Changes to Family Carer Pay Rates Photo: RNZ

In addition, FFC Hosts receive $550 for every new referral and $965 each year for the cost of scrutinising the disabled person's spending; the ministry says this covers the costs of maintaining balances and statements for the disabled person and keeping them informed on information relating to IF.

But Carrigan says she's struggled to get an hourly breakdown from the ministry.

"I have repeatedly asked how is the $31.23 cents per hour, broken down ie what is the gross hourly rate, what is the net hourly rate? What amount is set aside for annual leave, sick leave, KiwiSaver, ACC? No one can, or no one will, tell me," she said.

The other option is an HCC provider employing a family carer, for which the providers receive between $33 - $36 an hour. This covers the carers' hourly rate, annual leave. sick leave and ACC levy. But again, the ministry refuses to provide an hourly breakdown.

Carrigan said it appeared HCSS providers received approximately $10 an hour, per carer to cover administrative costs and profit margin. The ministry said providers needed to employ coordinators and clinical staff, as well as invest in quality, staff and system development. But it is unable to say how these staff and services will impact on the day-to-day care provided by the family carer.

Role for agents

What happens if someone isn't capable of being an employer? The ministry says it operates on the basis that any person can express their own will and preference with appropriate support. Yet it knows most of those who receive FFC lack the mental capacity to be an employer. In February, 483 people with high and very high needs, were receiving FFC through the ministry. Yet half of them (242) listed intellectual disability as their primary disability, and 65 percent (314) had some intellectual disability.

But if an agent is required, the ministry says a family member cannot be the agent and the employer. Instead, one IF Host is telling families to find another person to become the agent or become a "scheduler contractor". There is no advice on what this means. Both are impracticable, if not impossible, under a standard employment arrangement, Carrigan said.

Changes to FFC Agents

Changes to FFC Agents Photo: RNZ

Many families are unable to find someone to take on the role of agent/ employer, because not everyone wants to assume the considerable responsibilities or the work involved. But unlike the IF Host or the HCSS service provider, the role of a agent (whether family member or not) is unpaid.

Angela Hart spent six years under Funded Family Care employed as her daughter's carer, until Gilly's death in February. She says the role of agent is a lot to put on a family member who is already caring for someone who is severely disabled. And she warns it's ripe for abuse.

If an agent isn't fully aware of their responsibilities and fails to pay the right tax, ACC levies and KiwiSaver payments, they're liable, she said. That created a quandary. If the government pursues them, that leaves the disabled person without proper care. But if the government doesn't pursue them, taxpayer funds are being abused.

Angela Hart.

Angela Hart says it's asking a lot of family members to take on the role of agents as well. Photo: RNZ / Claire Eastham-Farrelly


These are used to calculate how many hours a family carer is paid for each week. But they are based on an individual's physical needs, using the narrow definition of personal care and household tasks. Supervision isn't included.

Changes to FFC Assessments

Changes to FFC Assessments Photo: RNZ

So keeping an eye on someone with an intellectual disability for their own safety, isn't part of the assessment. This results in absurd outcomes, for example, a person will be assessed as requiring toileting help for one minute in the morning, and one minute in the evening. The intervening hours aren't included.

Carrigan says even though the Court of Appeal found the failure to acknowledge supervision was unlawful, the Ministry of Health has done nothing to change its practices.

Hart says while her daughter received FFC, the assessment process never looked at her support needs in terms of the time or the expertise that was required to meet her needs. Instead, it focused only on her unmet needs.

She's upset that under the new model there's no plans to change the assessment process, which she describes as extremely limiting.

"Part of the NASC assessment asks the disabled person about their goals and aspirations and their social interactions. And then it completely ignores those goals and aspirations. My daughter wanted to go and play wheelchair rugby. There was absolutely no support for her to do that, because it wasn't considered to be essential."

Hart says the changes don't address the fundamental problems with the system.

"The system is completely and entirely dysfunctional and doesn't work. Keeping the basic system the same, while changing some aspects of it that affect a minority doesn't change the system, which is, in itself, not functioning," she said.

Carrigan agreed, saying the government needed to tear up the new disability funding model and start again.

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