Creative discussions have been fueled by recent conclusions drawn from a KPMG report. For these reasons, experts have been interpreting how changes in tax regulations could improve Individualised Living Arrangements (ILAs) for Australians with disabilities. KPMG has studied these systems in the UK, US, and British Columbia. They easily discovered that these countries all provide tax concessions for similar programs, and this understanding could drive powerful reforms to Australia’s National Disability Insurance Scheme (NDIS).
The report draws attention to the ILAs scheme’s current, restrictive nature, which has resulted in low uptake rates. KPMG’s analysis indicates that if the tax treatment for live-in supports was simplified, it would have a major impact on increasing access to these living arrangements.
Current Challenges and Recommendations
Alia Lum, head of tax policy at KPMG, emphasized the pressing need to rethink the tax framework surrounding live-in support roles. She pointed out that under the existing regulations, supported payments are considered taxable income. This classification limits the economic returns to backers.
“These supported payments get treated as taxable so that means a chunk of the payment for the supporter goes on tax,” – Alia Lum, head of tax policy at KPMG.
Lum is a huge proponent of a model similar to the one in the UK. Under this model, payments in support of donators could be tax-deductible, with a cap. These improvements would allow for more individualized and flexible supportive frameworks, encouraging increased autonomy for people with disabilities.
“It is more personalised support and gives them [people with a disability] more independence,” – Alia Lum.
The KPMG report asserts that introducing concessionary tax treatments for live-in supporters would enhance the attractiveness of host and home share arrangements.
“The introduction of a concessionary tax treatment for live-in supporters would make host and home share arrangements much more attractive to live-in supporters and providers wanting to offer these types of arrangements,” – Alia Lum.
Addressing Empty Homes and Group Home Concerns
Even as talks to change the state’s tax code have continued, these worries about group homes have accelerated. Reports of abuse and neglect in these facilities have sounded an alarm across the country, prompting a bipartisan desire for reform. The Disability Royal Commission recently recommended the government phase out group homes over 15 years, highlighting the pressing need for other options.
Jessica Walker from the Australian Summer Foundation stressed the need to give people with disabilities better options. She promised that the administrative changes to the tax rules would be the first step in a pragmatic approach to opening up more accommodation options.
“Changes to the tax rules were a practical way to give people with a disability more choice,” – Jessica Walker from Summer Foundation.
Hundreds of homes specifically built for people with disabilities are empty at this very moment. This reveals a direct misalignment between existing resources and current community needs. Adding to this is the government’s plan to make deeper cuts to NDIS spending, throwing more fuel on this fire.
A Path Forward
Implementation of KPMG’s recommendations would lay the foundation for a stronger system that focuses on promoting independent, community-based living. These changes will mitigate unwarranted tax burdens imposed on live-in supporters. This will bring more people into the community to assume supportive roles, and it will provide a realistic alternative to group home living.
Lum argued that these reforms would provide advocates greater certainty. In doing so, they’d develop inclusive ecosystems in which people with disabilities can fully flourish.
“It also gives certainty to supporters, it means more money in their pocket to encourage more take-up of these arrangements,” – Alia Lum.
The KPMG report serves as a critical step in exploring how tax policy can influence housing solutions for Australians living with disabilities. Those talks are still ongoing. Stakeholders hope to see a continued movement toward living situations that are inclusive and adaptable, honoring the dignity and autonomy of people with disabilities.
