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Home / New Zealand

Funding squeeze for disability sector causing ‘unnecessary and severe harm’, doctors say

Isaac Davison
By Isaac Davison
Senior Reporter·NZ Herald·
13 Feb, 2025 04:00 PM5 mins to read

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Jack Murphy (left) and his father Mike Murphy in their home in Christchurch. Jack, 27, had lined up a residential placement before a funding change meant it was no longer possible.

Jack Murphy (left) and his father Mike Murphy in their home in Christchurch. Jack, 27, had lined up a residential placement before a funding change meant it was no longer possible.

  • Clinicians say a “freeze” on residential care funding has caused “severe harm” to intellectually disabled people
  • An effective halt on new placements has led to stress on families, patients getting stuck in hospital, and greater medicalisation to control behaviour
  • The Government is reviewing the sector after costs rose to $1 billion a year since 2019

After years of planning, Jack Murphy was ready and excited to move out of his parents’ Christchurch home and into a flat last year.

Murphy, who has Down syndrome, had secured a much sought-after place in residential care, which includes 24-hour support. His parents were nearing 70 years old and he needed help with dressing, showering, meals and getting to bed.

Just as the 27-year-old was about to move in with three other disabled tenants, a funding change by the Government effectively froze new placements for residential care.

“Our life is on hold,” his father, Mike Murphy, told the Herald six months after the funding change.

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“At some stage, my wife and I won’t be around and we really want Jack settled before something happens to us. Because that would be horrendously traumatic – he would be just dropped into an ocean to try to survive.”

Concerned about a budget blowout, the Government made a series of restrictions to disability funding in the middle of last year. Two of the biggest contributors to the rising costs were residential care and individualised funding for disabled people.

An editorial published in the New Zealand Medical Journal today tracks the “significant adverse consequences” of the funding changes on intellectually disabled people. The paper, written by five clinicians who work with disabled patients, said they were causing “unnecessary, severe harm” to families and carers.

Families like the Murphys, who had arranged a placement, were suddenly left with nowhere for their child to go. Patients with extremely high needs were getting stuck in a hospital, often in a general psychiatric ward, because they could not transition back into the community – a problem which was also blocking up scarce mental health beds.

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Intellectually disabled people in residential care were being moved between homes because providers could not afford to pay for them, which was especially stressful for autism spectrum disorder patients moving from small, quiet flats into larger ones.

A combination of factors related to the funding changes had led to a rise in violent and suicidal behaviour, resulting in more presentations to emergency departments.

All of these factors were leading to pressure to increase the prescribing of anti-psychotic and sedative medication to moderate difficult behaviour – reversing years of progress in reducing medicalisation and institutionalisation.

Professor Richard Porter, a psychiatrist and lead author of the editorial, said: “I’ve worked in the NHS in the UK for about 10 years and in New Zealand for about 25 years, and honestly, this is the most inhumane change I have seen in my career.”

The editorial said the funding cuts were mainly based on an independent report which was produced in six weeks, without community or clinical consultation, and with minimal consideration of non-financial effects.

“We urge the Government to reconsider,” the editorial concluded.

Disability Issues Minister Louise Upston said disabled people were still going into residential care. Photo / Mark Mitchell
Disability Issues Minister Louise Upston said disabled people were still going into residential care. Photo / Mark Mitchell

Disability Issues Minister Louise Upston said transferring people with complex needs into residential settings had been a “long-standing challenge”.

“This Government is committed to supporting disabled people, which is why we provided a record $1.1 billion funding boost to disability support services in this year’s Budget,” Upston said in a statement.

“I’m confident recommendations from the urgent residential price review initiated last year will support a fairer, more sustainable system for care, and I’m expecting further advice from officials soon.”

That review is expected to be completed in June. Consultation is about to begin with the sector.

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Upston said there was no halt or freeze on new residential placements and disabled people were continuing to enter care.

However, multiple advocates and providers told the Herald they were struggling to get residential support for all but the most extreme, high-needs cases.

“We’ve got examples of people with an intellectual disability who may be 20 or 30 years of age, and they’re living with elderly mum and dad and their support is starting to fail,” said New Zealand Disability Support Network chief executive Peter Reynolds.

“Trying to make that move, trying to get somebody to go into an environment that has some level of supervision and support is currently impossible.”

Reynolds said he understood the need to review spending and identify the key drivers of rising costs. But funding should be sustained in the meantime in a way that did not place people at risk, he said.

Around $1b is now spent on residential care each year, and costs have risen $406m since 2019. The NZMJ editorial notes this 43% increase was driven by inflation, rent rises, high rates for carers, and an increase in clients.

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Isaac Davison is an Auckland-based reporter who covers health issues. He joined the Herald in 2008 and has previously covered the environment, politics and social issues.

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