NDIS

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Table Of Contents:

1. What is NDIS and SDA?

   • Definitions

   • SDA Design Philosophy

   • Funding from NDIS

   • Managing SDAs

2. Different Categories of SDAs

   • Improved Liveability

   • Robust

   • Fully Accessible

   • High Physical Support (HPS)

3. Calculating Returns on SDA Assets

   • SDA Price Limit Explained

   • Calculating SDA Price Limit

4. Key Takeaways

5. Final Thoughts

6. Disclaimer

Welcome to another Mateo Group blog! Today, we aim to shed light on NDIS Specialist Disability Accommodation (SDA) for investors. Key considerations BEFORE investing

1. Commercial Financing → Higher % Equity Contribution

2. Formulating a solid A-team: Experienced builder + provider

3. Getting familiar with the SDA scheme & design requirements yourself!

For today, we’ll be focusing the the last part of this list. If you're interested in understanding the opportunities and considerations associated with investing in NDIS SDAs, you've come to the right place!

✅ Topics that we will go through:

• What is NDIS and SDA?

• Different categories of SDAs

• Calculating returns on SDA assets

❌ What the blog won’t do:

• Tell you about exact return figures

• Tell you if SDAs are right for you: You should be the one to make that decision.

• Provide any financial advice

What is NDIS and SDA?

Definitions

The National Disability Insurance Scheme (NDIS) is a program in Australia that provides support and services to individuals with disabilities. Under the NDIS, there is a specific category called Specialist Disability Accommodation (SDA) that focuses on providing suitable housing options for people with significant functional impairments or high support needs.

SDA Design Philosophy

SDAs are specifically designed to support individuals with disabilities and facilitate their independence, daily living, and access to necessary support services. The aim is to offer housing solutions that are tailored to the needs of people with disabilities, promoting their choice and control over where and how they live. These properties can be apartments, townhouses, or standalone houses located in various settings, including urban, suburban, or rural areas. SDAs are not intended to be a temporary housing solution but a long-term arrangement for individuals with complex needs.

For more details on this sect

Funding from NDIS

Eligible participants can receive financial support from the NDIS to cover the cost of their accommodation, including the necessary modifications and ongoing support services required to meet their disability-related needs. The funding is provided to the individual, who then enters into a tenancy agreement with an SDA provider.

The NDIS has eligibility criteria to determine who can access SDA funding based on the person's functional impairment or support needs, which you can read in detail here.

The introduction of NDIS-sponsored SDA in Australia has aimed to address the shortage of appropriate and accessible housing options for people with disabilities. It provides individuals with more choices and opportunities to live in accommodation that supports their specific needs and enhances their quality of life.

Managing SDAs

SDA properties are managed by registered SDA providers, who are responsible for the ongoing maintenance and support services associated with the accommodation. NDIS also outlines a list of obligations that Registered Providers must fulfil as part of their service, which you can read in detail here:

For investors, choosing the right provider that matches your investment needs is absolutely crucial. A basic list to help you start:

• Compliance and Certification: Ensure that the provider is registered and compliant with the relevant regulatory bodies and standards. Look for certifications and accreditations that demonstrate their adherence to industry best practices and quality standards.

• Expertise in Disability Support: Assess the provider's expertise in disability support services. Consider their understanding of the specific needs and requirements of individuals with disabilities, as well as their ability to deliver personalised and tailored support. This means, of course, that you will also need to know the specific needs of your end user.

Different Catefories of SDAs

The four categories of SDAs are as follows:

1. Improved Liveability: This category focuses on properties that have basic accessibility features to enhance the livability for individuals with disabilities. The design elements in this category aim to improve access and usability, such as wider doorways, accessible bathrooms, and basic provisions for mobility aids. Improved Liveability properties are suitable for individuals with lower support needs.

2. Robust: The Robust category involves properties that have additional design features and modifications to withstand higher levels of wear and tear. These properties are suitable for individuals with challenging behaviors or specific support needs that require durable materials and reinforced structures. The Robust design ensures the accommodation can withstand the demands of the residents' behaviors and support requirements.

3. Fully Accessible: The Fully Accessible category comprises properties that have been designed to provide comprehensive accessibility and usability for individuals with disabilities. These properties incorporate a range of advanced accessibility features and modifications to support independent living and mobility. Features may include step-free access, wider hallways, adjustable fixtures, and integrated assistive technologies.

4. High Physical Support (HPS): The High Physical Support category includes properties specifically designed for individuals with very high physical support needs and complex disabilities. These properties require extensive modifications and specialized design elements to provide a safe and accessible environment. They may include features such as ceiling hoists, pressure care systems, advanced assistive technologies, and custom-built support equipment.

These categories are designed to ensure that individuals with disabilities have access to appropriate housing options that meet their specific support needs. The categories help to guide the design and construction of SDA properties, ensuring that they align with the intended level of support and functionality required for residents. For more details, see here.

Calculating Returns on SDA Assets

If you’re looking in the SDA space, we’re going to assume you’re creating new products. With this assumption, let’s get into an investor’s favourite part: calculating the returns!

Basic summary of the steps:

1. Download the most up-to-date version of the NDIS Pricing Arrangements for SDA here.

2. Find the category that fits the project you’re reviewing, and note down the relevant SDA Price Limit (more information on this section below).

3. Consult your SDA Provider, note down a reasonable Proposed Voluntary Contribution

4. Gross Revenue = SDA Price Limit + Proposed Voluntary Contribution

5. Using the Gross Revenue, calculate your other financial metrics

For more info on how to calculate different financial metrics, read this blog: Mateo Group - Financial Metrics

SDA Price Limit Explained

The SDA price limit is the highest amount of money that can be charged for a special type of home that helps people with disabilities.

The price limit is NOT the exact amount people pay for rent.

The actual rental amount paid by tenants is determined through a process called "reasonable rent," which considers factors such as the tenant's disability-related needs, their individual funding, and the market rental value of the property.

The SDA price limit helps ensure that SDA rental costs are reasonable and sustainable

The limit provides an appropriate balance between the needs of participants, the costs associated with specialized accommodation, and the availability of funding within NDIS.

Calculating SDA Price Limit

1. Determine the Base Price:

   1. Determine whether the dwelling is a post-2023 New Build, a pre-2023 New Build, Existing Stock or Legacy Stock

   2. Identify the Building Type

   3. Identify the Design Category

   4. Identify if there is a room for On-Site Overnight Assistance

   5. Identify if there is an additional breakout room (Robust only)

   6. Identify if the Dwelling has Fire Sprinklers

   7. Identify if GST input tax credits have been claimed

   8. Determine the Base Price

2. Identify the Location Factor

3. Calculate the SDA Price (Annual SDA price limit = Annual Base Price x Location Factor)

4. Calculate the SDA Price (shared living arrangements)

Refer to Pricing Arrangements for Specialist Disability Accommodation 2022-23 (Page 20-23, Appendix A)

Key Takeaways

• Key considerations before investing in NDIS SDAs: Financing, building a solid team, understanding the SDA scheme.

• NDIS support individuals with disabilities with suitable housing via the SDA program.

• SDAs are designed for independence and tailored housing solutions.

• SDAs are managed by registered providers

• Four categories of SDAs:

  • Improved Liveability

  • Robust

  • Fully Accessible, and

  • High Physical Support (HPS).

• Calculating returns involves considering the SDA price limit alongside voluntary contributions

Final Thoughts

You’ve made it! Well done on reading through the entire blog (you did, right? 🙂)

Hopefully, this provides you with a solid knowledge-foundation of SDAs and how you can evaluate each project using the resources available to you.

If you are interested in this space and wish to stay up-to-date on relevant projects, please reach out to us via https://www.mateogroup.com.au/contact and mention NDIS.

Disclaimer

The following information provided by Mateo Group is intended for general informational purposes only and should not be construed as financial advice. The content shared on this platform is based on our understanding and interpretation of the subject matter at hand.

While we strive to provide accurate and up-to-date information, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability of the information provided. Any reliance you place on the information shared is strictly at your own risk.

Investing in financial markets, including real estate, involves inherent risks, and individual circumstances may vary. It is always recommended to seek professional financial advice tailored to your specific needs and goals before making any investment decisions.

The content presented by Mateo Group does not constitute financial advice, and we disclaim any liability for any loss or damage incurred as a result of reliance on the information provided. We encourage you to conduct your own research, analysis, and due diligence before making any financial decisions.

Remember, the financial landscape is dynamic and subject to change. It is important to stay informed, continuously evaluate your investment strategies, and seek guidance from qualified professionals to make well-informed financial decisions that suit your individual circumstances.