Advocates highlighted guidelines which said priority would be given to people in prison, state care or hospitals, saying families were more likely to miss out.
The Government, however, said this was not significantly different from the existing system. It also claimed there was still capacity in the residential care system for those who needed it.
Anita Nicholls, who has two sons with intellectual disabilities, said she was “horrified” by the ministry’s new approach.
“It actually says quite clearly that people who are in family homes, if a parent becomes unable to support them there is no guarantee from government that a residential place would be provided. And that’s every parent’s worst nightmare.”
Nicholls fought to have her eldest son, 30, placed in residential care six years ago after he became too aggressive and violent for his parents to handle. He now gets a funded place to live on his own and 24-hour staff support.
His place remains secure, though he could potentially have his individualised funding reduced.
Nicholls’ younger son James, 26, lives at her home in the Wairarapa. Nicholls said if anything happened to her or her husband they had no one else to look after him.
Whaikaha said on its website that the number of people in residential care, around 7700, has remained steady for several years. A spokesperson said costs had risen faster than inflation, and that spending on residential facilities-based care had risen from $706m to almost $1b between 2015 and 2023.
NZ Disability Support Network (NZDSN) chief executive Peter Reynolds said Whaikaha had put in a “blunt cap” to control costs without properly considering why spending was rising.
There were two main ways of funding residential care. The first was baseline funding, which Reynolds said had not kept pace with inflation.
The second was individualised funding for people with higher needs. People who were being approved for residential support were now older and had more complex needs, and required the more expensive individual funding – which was driving higher costs, he said.
“If you’re going to get concerned about your costs, and you’re not looking at the factors that drive those cost increases, then you’re not going to fix the problem.”
Disability Issues Minister Louise Upston said she disagreed with how NZDSN had interpreted the changes.
Funding for residential care was being maintained at 2023/24 levels while a rapid review of pricing was being conducted, she said: “This is a hold only until an urgent review of the contract and pricing models is complete.
“For clarity, this only applies to current spending on residential care, not on the total number of people receiving residential care.
“Given the number of people in residential care has declined slightly since 2020, those assessed through the normal processes should be able to access residential care if that is the best place for them.”
Families questioned whether there was capacity in the residential care system. Nicholls said she was aware of families who had been going through the process of applying for residential services who “had the plug pulled overnight”.
Reynolds said his phone had been “running hot” for the last 48 hours with people who were concerned about the ministry’s restrictions.
A provider in Christchurch had taken in a severely ill, disabled person who had been discharged from hospital.
“They’ve been put back into a residential care facility that is not receiving any additional funding to provide for that person,” he said.
The Whaikaha spokesperson said a review panel was being re-established within the ministry to look at situations where a needs assessor or Enabling Good Lives site recommended individualised funding for a person in residential care. The panel would include a registered health professional, the spokesperson said.
“Ministry of Disabled People - Whaikaha continue to work closely with providers in a collaborative and supportive way to ensure ongoing provision of services.
“We appreciate that change can be unsettling, and we encourage people with concerns to contact their current providers in the first instance.”
It is the latest change in a turbulent year for the disability sector.
The ministry put in place restrictions on how families could use disability support funding in March and made it harder to get access to funded equipment.
A review of Disability Support Services (DSS) led to Whaikaha being downsized and the responsibility for commissioning services transferred to the Ministry of Social Development.
The changes were announced after a scathing review found Whaikaha had “no controls” to restrain exploding service costs and, just six weeks into the current fiscal year, was on course to blow its funding for this year, despite receiving a generous top-up in the Budget.
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.
