The adverse impact of disability funding cuts on individuals with intellectual disability

As clinicians working with individuals with disabilities, we are increasingly concerned regarding the adverse impact of cuts in funding to support individuals with disabilities and their carers.

The highest proportion of funding for disability support provides services for individuals with intellectual disability (ID). Since de-institutionalisation and the National Advisory Committee’s 2003 report for the Ministry of Health, To have an ‘ordinary’ life – Kia whai orange ‘noa’,¹ care for these individuals has improved significantly. However, the recent cuts threaten this for many. Here we highlight the clinical risk associated with the funding cuts for these individuals and describe what we have observed regarding the consequences of these changes. In focussing on people with ID we do not want to diminish the effects of the funding cuts for individuals with other disabilities. However, we believe that individuals with ID are among the most vulnerable in our community and are also a group of individuals for whom self-advocacy can be particularly difficult.

ID and associated physical and mental health difficulties

ID is characterised by significant intellectual impairment—an IQ of less than 70 on standardised neuropsychological testing, significant difficulties in adaptive functioning and evidence of onset prior to 18 years of age. These difficulties are lifelong. In Aotearoa New Zealand, rates of ID are higher among Māori (1.3%), with rates in Pacific peoples at 0.9% and Europeans at 0.8%.²

Individuals with ID suffer from mental illness at rates of at least two to three times that of the general population, with verbal and cognitive limitations making diagnosis particularly challenging. For example, the incidence of schizophrenia is approximately four times greater, with a similarly increased rate of bipolar disorder. Individuals with ID are significantly more likely to suffer from physical illnesses—for example, epilepsy,³ diabetes, chronic obstructive pulmonary disease and coronary heart disease²—and they develop dementia at a significantly earlier age.⁴ They are more likely to be sexually (a rate of 30%)⁴ and physically abused and to suffer other adverse life events. Neurodiversity issues are also greater among individuals with ID, with the rates of attention deficit hyperactivity disorder and autism spectrum disorder (ASD) being several times greater than in the general population.^6,7 Difficulties in accessing healthcare are significant, related to difficulties in communication and to systemic and discrimination issues in the healthcare system. Life expectancy is significantly reduced by approximately 20 years.²

Care for individuals with ID in Aotearoa New Zealand

Until the early 2000s, many individuals with ID were housed in large institutions (e.g., Braemar, Cherry Farm, Templeton, Kimberley, Māngare, Tokanui). Care in these settings was often regimented and lacked attention to individual rights and access to the community. Polypharmacy was common in attempts to control behavioural disturbance. These institutions were progressively closed from 1996 onwards and many of the residents were re-housed in community-based homes. Currently, these homes usually have two to six residents, supported by staff up to 24 hours per day. The level of staffing varies according to the needs of the residents. Day services and vocational activities are provided to facilitate activities, education and supported employment outside their home. These services are often provided by not-for-profit, non-government organisations. The majority of individuals with ID are cared for by family at home. This situation can be stressful for families, and at times the situation can break down rapidly. Flexible “individualised” funding was intended to allow families to utilise a range of strategies to maximise the potential of the individual and to allow them to remain in their family home.

Given high rates of mental health difficulties, individuals with ID frequently require specialist mental health input. In contrast to most other developed countries, in Aotearoa New Zealand there is minimal access to services that specialise in treating the comorbidity of ID and mental health difficulties. The only comprehensive specialist service is in Canterbury. Generally, if individuals with ID require hospital in-patient care, they are admitted to general adult psychiatric wards, where there is usually no specific expertise in their care, the environment is often inappropriate and individuals are vulnerable.

In many cases problematic behaviour can and should be managed by the judicious application of positive behaviour support, involving consistent positive reinforcement for desired behaviour and management of the environment to minimise distress. Specialist advice and assessment is provided by behaviour support services nationwide. The waiting time for this service is generally between 1 year and 18 months.

Costs of disability support

Currently 50,000 clients access funding from Disability Support Services (DSS) (a 43% growth in 5 years from 2019).⁸ In that 5-year span, the numbers of individuals with ID accessing DSS support increased by 2,500 (to a total of approximately 19,000) and those with ASD by 9,600 (total 18,000). The greatest increase in costs has been in residential care (increased by NZ$406 million) and in flexible funding arrangements (increased by NZ$376 million).

The Independent Review Disability Support Services notes that “Almost $1bn is now spent on residential care facilities each year, a significant increase from $700m in 2015/16.”⁹ This represents a 43% increase on the background of an increase in consumer price index of approximately 30%¹⁰ between 2015 and 2024, a rate of rent increase above the rate of inflation, pay equity settlements (still ongoing), increased pay rates for “sleepover staff” and a 43% increase in clients (between 2019 and 2024).

Overall, we believe that several important improvements have been made in the care of individuals with ID in residential and other settings. Increasingly, dedicated services have recognised the very complex needs of individuals with ID, and have adapted services to respond to individual needs. This has often led to smaller houses with fewer residents, sensory adaptations, a focus on staff continuity and targeted improvement of staff ratios.

The DSS funding cuts

DSS (Ministry of Social Development ([MSD]) is responsible for contracting and funding for individuals with a long-term intellectual, physical or sensory disability, including autism, that arises before the age of 65. In 2021, a decision was made to set up Whaikaha – Ministry of Disabled People, which was launched on 1 July 2022, with responsibility for administering DSS funding. This function was transferred from the Ministry of Health. In March 2024, the Government announced a “temporary pause” that narrowed the scope of what carers could purchase to support individuals with disabilities.¹¹ Examples of services that can no longer be “purchased” with individualised funding are therapies such as “speech language therapy, psychologist involvement in behaviour support; and occupational therapy.” These are considered “examples where other agencies may have funding responsibilities.”¹¹ However, these services are not available within a realistic time frame with funding from any other agency.

In May 2024, a review of DSS was commissioned and the Phase One Report was published on 28 June 24.⁹ On 15 August 2024, the Government announced that Whaikaha would be restructured as a policy and advisory department, that DSS functions would be taken over by MSD and that there would be no financial uplift for the care and support of individuals with disabilities. Recommendation 2 was to “Freeze current levels of funding for residential facility-based care for 2024/25 pending commissioning and completion of a detailed and urgent review of the contract and pricing models”⁹— the latter is currently underway.

The Phase One Report was produced within 6 weeks of the appointment of a Chair, and noted that because of the time frame “Engagement with the disability community was not possible during this phase of the review.”⁹ No clinical staff were interviewed. In the section regarding “clinical risks”, of 10 paragraphs only one addresses clinical risks; paragraph 148 notes “There is a risk that the quality of care being provided to disabled individuals may erode during a period of funding constraint. We consider that the monitoring proposed in Recommendation 4 will be an important part of the mitigation of this risk; but we acknowledge that it may take time to establish a responsive monitoring function. In the meantime, internal processes for complaints, concerns and ongoing stakeholder management must recognise this risk and provide transparency to executives on how risks are being managed.”⁹ Recommendation 4 was to “establish an effective function within the Ministry to monitor the assessment and allocation performance of NASCs (Needs Assessment and Service Co-ordination and EGL (Enabling Good Lives) demonstration sites.”⁹

Clinical risks and consequences of the funding cuts

Effectively, what has been implemented is a cut in funding, involving a freeze in new residential placements and cuts to aspects of flexible funding for those individuals living at home. These funding cuts have significant implications, which are already impacting on the care of individuals with ID, as we have observed in our clinical practice:

1. Effectively, no new residential places are being funded and some that were planned but not yet commenced have been withdrawn. The decision to place a loved one into residential care is one of the most difficult faced by families with adult offspring or siblings with ID. In our experience, the decision is often made only when severe difficulties are being experienced, and family carers develop burnout and mental health challenges.¹² We have now seen several such individuals and families/whānau who, having made the decision to place their loved one in residential care, have had this option taken away. For some, this has occurred after the individual with ID and their family have visited a home and even spent nights there as part of the planned transition. This has been devastating for all concerned as they return to an untenable situation.
2. Some individuals with severe difficulties who have been admitted to hospital have not been able to be transitioned back into the community due to the funding freeze. These individuals are now left in hospital, often in a general psychiatric ward—an inappropriate environment where the person is vulnerable. This also then “blocks” scarce mental health hospital beds. Residential services will not consider taking these individuals into care because of the likelihood that they may require higher levels of care, for which funding is not available.
3. Higher levels of care within residential services are now not available when individuals with ID experience worsening mental health difficulties. Previously, services requested extra, often temporary, funding to respond to a situation in which a person might suffer from an episode of significant depression, mania or psychosis. Supporting people in their usual setting with staff who they know well is usually the best option. While a “review panel” might agree to “individualised rates for residential care”, practically we have not seen this happen.
4. Individuals with ID experience dementia at an earlier age. Again, care in their own home is the best option and, in our experience, services have in the past provided this until the person dies. This was done with increased funding to provide more intensive care as the person’s cognitive function declined. Some services have specialised in caring for older individuals and have expertise in caring for these individuals when they develop dementia. These services are vulnerable, and some will be forced to close. With funding unavailable to meet changing needs, it is likely that some individuals will now be admitted to general psychiatric wards since they are not suitable for dementia-level care.
5. As funding is reviewed, some individuals have had existing packages of care reduced and providers have begun to “rationalise” by amalgamating houses and closing houses with fewer residents. Often homes with fewer residents were set up for individuals with ASD, who require a quieter, more structured and predictable environment. We have already observed adverse effects on the mental health of individuals forced to move home because of these changes. Not only are larger group homes less suitable, but such enforced moves away from familiar long-term housemates and staff represent major adverse life events, stress and altered mental wellbeing for the individuals involved.
6. Funding for activities outside the home has become constrained, leaving residents at home without meaningful activity or distraction from sources of distress.
7. The factors noted above are leading to pressure to increase prescribing of sedative and antipsychotic medication in an attempt to “medicate” behaviour disturbance. Where there are specialist mental health services for individuals with ID, these services have spent many years reversing the polypharmacy that occurred in both institutions and contemporary healthcare. Services are now under pressure to introduce or re-introduce antipsychotic medication to mitigate the effects of inappropriate placements and low staffing levels resulting from the funding cuts.
8. A combination of factors related to the funding cuts is leading to an increase in high-risk suicidal and violent behaviour, resulting in higher rates of presentation of individuals with ID to mental health services, emergency departments and police.

Conclusions

We have observed significant adverse consequences of the current disability funding cuts and believe that these impacts will worsen over time. We suggest that there is no justification to “freeze” residential funding while reviewing the funding system and that doing so is causing unnecessary, severe harm to those with ID and their families and carers. The harm caused will not be short term. Already, the reconfiguration of services is taking place, returning individuals with ID to a situation of non-personalised care, accompanied by reduced community involvement and chemical restraint.

The loss of individualised services and skilled staff will take many years to reverse and will be costly. The trauma of these changes and the accompanying worsening of physical and mental health for individuals with ID and their families and carers will not be reversible. Hospital beds will be blocked, resulting in increased costs and potential harm for all individuals with mental health difficulties requiring in-patient admission.

These funding cuts are largely based on a report that was produced in 6 weeks, without clinical or community engagement, and which essentially had minimal consideration of the effects, other than supposed financial benefits. We urge the Government to reconsider.