Building Financial Capability

Intensive Support Services

Consultation document

(Service development, funding and purchasing of
Intensive Support Services)

Submissions due by 9.00am, Wednesday 19 April 2017

Purpose:

This document seeks your feedback on the initial stages of Intensive Support Services: client description, service content, funding allocation and pricing model. This will form the first service component of Phase Two that contributes to a wider suite of services to be launched as part of Building Financial Capability (BFC) for New Zealanders experiencing hardship.

Our intention:

Funding for Intense Support Services

MSD is embarking on a co-design process for Intensive Support Services.

In the interim, MSD has put aside $1.1m per year to fund Intensive Support Services from 1 August2017 to ensure continuous service provision for vulnerable clients. This will involve an open procurement process in April 2017 to award contracts to successful providers from 1 August 2017 – June 2019 with providers getting a full year funding (even though the contract will only be for a duration of 11 months in that first year) while the co-design work is being carried out.

Co-design with sector

The design work for Intensive Support Services will be undertaken over the next 18 months. Through this process, we want to better understand the needs of vulnerable clients using Intensive Support Services so that we can develop service guidelines and a funding model that is suited to this service type.

Proposed service framework

The draft service framework for Intensive Support Services is as follows:

  • Service development – we will be embarking on an 18-month co-design process with the sector to design the service specifications for Intensive Support Services
  • Clients – research so far has identified a cohort of vulnerable clients whose needs require more intensive support. We are doing further research around clients in desperate and in crisis situationswhich will influence who these vulnerable clients are
  • Funding allocation – distributing the funding equitably according to vulnerability factors
  • Purchasing and pricing – to align with BFC core services, the rate of $95.23 per session is proposed.

For further detail please refer to the draft service framework (Appendix One).

What has informed this work?

Since the launch of core BFC service components in November 2016 (Phase One), we received feedback from providers and the sector identifying a cohort of clients who require much more intensive support services, including but not limited to money management. For example, clients who are homeless, have rural or remote access issues, or chronic mental health issues.

The BFC roadshows in December 2016 further supported the need for more work into intensive support clients(Appendix Two). Some of the key feedback from the roadshows included:

  • clients with disabilities, addictions, mental health issues required more intensive support
  • elderly, seniors and newly-bereaved elderly need a different type of support as it can be very easy for these clients to feel taken advantage of
  • clients with head injury particularly head trauma need different supports
  • money managementas a short term solution to encourage clients to take ownership of their financial situation.

What do we want from you?

We are seeking your feedback on the following questions around the draft client/service framework, and funding and pricing models as detailed in the draft service framework (Appendix One).

You can contribute to the discussion by providing your feedback by 9.00am on Wednesday 19 April 2017 to the MSD Financial Capability email address:

Appendix One: Intensive Support Services – draft service framework

Vision

“Supporting vulnerable clients with their money and transactions. Clients supported by a financial mentor, reviewingmoney regularly and building pathways to independence where possible.”

The intention is that these services will:

build financial capability for people experiencing crisis and, over time,assist them onto a pathway of independence where appropriate

keep the clients safe while utilising a strengths based approach that underpins BFC

differentiate between clients requiring long-term engagement with high/complex needs, and clients with short-term needs.

Service development

Over an 18-month period following the open procurement process for Intensive Support Services, MSD will co-design with the sector, the service specifications, standards and service delivery framework to clients with intensive support needs.

We aim to finalise the design of what we purchase and how we purchase it by December 2018, ready to purchase Intensive Support Services, alongside core BFC contracts, starting 1 July 2019.

As we have flexibility in what these services will look like to respond to these aims, providers will be asked to work with us to design how these services are delivered in a manner that best meet the needs of their clients.

At the end of this design process, we will update the BFC Services Guidelines to reflect what good Intensive Support Services look like.

Clients

In Phase One we created client profiles to help align our thinking and provide a platform for service design. Amongst the other client profiles developed, one client profile portrayed ‘desperate’ circumstances.

  • People in desperate circumstances may typically live from crisis to crisis with a range of serious and complex factors of: mental health issues, housing issues, debt, family violence issues, low financial literacy, inter-generational benefit dependency, high users of hardship grants etc.

It was determined that more research was required around clients with ‘desperate’ circumstances which influenced further research on people that are ‘drowning’ or ‘outside’ the system.

Therefore, it is expected that the following types of clients would be considered as part of the co-design:

  • People in ‘drowning’ circumstances who are in immediate need of holistic support and assistance to address crises across multiple facets of their lives. They should not be clients of BFC services beforetheir other needs are addressed; however in the current circumstances they often end up there. They may be experiencing: mental health crisis, addictions crisis, family violence crisis, child protection crisis
  • ‘Outside’ people who use a completely different cultural or social lens. They may not understand finances or social support systems in a way that allows them to manage well in New Zealand, and need specific assistance to help them bridge the gap between where they are and where they need to be in order to build capability and thrive
  • Clients dealing with multiple services (for example, OrangaTamariki including Children’s Teams, family violence intervention, and those that need respite from financial stress while learning how to manage their money)
  • Clients who are vulnerable through limited access to services and support (for example; rural/remote – no services, lack of infrastructure such as transport and limited internet capability)
  • Older people/seniors vulnerable to financial abuse.

Service content

The 18 month service co-design will inform the service delivery content and service framework for the client group(s). We expect that support is likely to include (but not be limited to) some of these components:

  • On-going advice to clients about income and expenditure
  • Preparation of an on-going Financial Plan of Action / financial management plan
  • Creditor negotiation, including individual client-related advocacy and related repayment plan
  • On-going monitoring and financial mentoring and education to develop financial skills, confidence and independence
  • Follow up appointments / discussions with the client
  • Collaboration with Work and Income relating to significant financial barriers for the client
  • Support regarding an employment or increasing income focus, where appropriate / relevant for the client.

Over the 18 month period we want to learn from the funded providers how they deliver the services and what works for these particular clients.

Contracting

To ensure service delivery for intensive support clients, we will run an open tender for Intensive Support Services to commence 1 August 2017, using the full two-year funding allocation, across23-month-long contracts (to 30 June 2019). This will align with BFC core services contracts.

It will be an open competitive process to enable any new specialist intensive service providers (e.g. those who focus on money management) the opportunity to apply.

The tender will be openly advertised on GETS, and use emails to existing providers and updated information on the BFC website.

Funding allocation

Following the launch of Phase One BFC services in November 2016, we received feedback from the BFC sector that more extensive consultation on our funding and purchasing models would have assisted the sector in understanding the new mechanisms. Acknowledging this, we want to make sure that you have opportunities to have a say in how Intensive Support Services will be funded from July 2019.

A funding allocation model has been proposed for Intensive Support Services. In order to target funding to the areas of greatest need, a high level funding allocation model has been designed which specifically considers the BFC vulnerability factors. The model providesa high level guide for the amount of funding available in each region for Intensive Support Services. Providers will be notified prior to the tender of the estimated value available in each region.

The model works by:

  • Distributing 50 percent of the funding equally across the five regions to ensure each region receives a baseline level of funding.
  • Distributing 50percent of the funding based on the vulnerability factorsbelow:
  • High percentage of population living in remote areas (Statistics New Zealand);
  • High percentage of population with mental health issues (NZ Health Survey);
  • High percentage of population living in deprived areas (Statistics NZ); and
  • High percentage of population on benefit for more than one year (Ministry of Social Development).

The estimated funding values for each MSD region are as follows:

MSD regions / Proposed Funding
Te Tai Tokerau / $143,133.82
Auckland / $201,009.67
Midlands / $223,661.91
Central / $273,911.50
Southern / $258,283.10
Total / $1,100,000.00

Additionally, to ensure provider viability and that funding is distributed equitably between providers, the following parameters are also proposed:

  • A minimum funding amount of $20,000 per provider
  • A maximum funding amount may also be determined per provider, dependent on factors such as geographical coverage.

Purchasing and pricing

  • To align with BFC core services (phase one), the rate of $95.23 per session is proposed. It is expected that many Intensive Support clients are likely to require on-going longer term and more intensive support
  • While BFC providers had advised three to five sessions may be needed for BFC core services, it is likely that high intensive support clients will require more sessions. Flexibility in the number of sessions is important to allow providers to respond to the varied needs of their clients. For example, a provider is able to support 20 intensive support clients that on average will require 10 sessions for the first year, and then four sessions for the second year. That provider would then apply for $26,664.40 worth of sessions at $95.23 per Session
  • One session is indicative of three hours of time – approximately one hour client-facing and two hours non-contact time, acting on behalf of the client and/or back-office functions
  • Through the co-design over the next 18 months we will learn how many sessions were actually needed by providers with Intensive Support Service contracts, and have a better understanding about what providers are doing to support these clients and theirwhānau.


Building Financial Capability Intensive Support Services Consultation document1

Appendix Two:

This is the feedback we received during the November / December 2016roadshow. This highlighted the need for Intensive Support Services (including, but not limited to money management)

Benefits:
  • Vulnerable clients have extra support when they do not have confidence to say no -supports the marginalised
  • Provides respite from stress and gives clients breathing space
  • Enables a family to remain as a family
  • Microsavings opportunity
  • It meets a defined client need
  • Enables individuals with intensive needs to live independently
  • Provides security
  • Money problems and mental health – money management helps break this dependency
  • Clients get used to living within their means
  • Useful for people with disabilities, addictions, mental health, gambling, elder abuse, whānau groups, people with English as second language/who do not understand NZ systems.
/ Ideal clients:
  • Severe mental health clients
  • At risk families including women suffering from domestic violence
  • Older people/seniors, newly-bereaved elderly
  • Disability particularly head trauma / brain injury
  • Addiction clients
  • Whānau relocated due to disaster
  • Clients with custodial sentences
  • People with numeracy/literacy issues

Risks:
  • Lacks empowerment/dignity/control for already vulernable clients
  • Doesn’t encourage independence, may increase co-dependency among clients
  • Clients might be more open to abuse
  • Making a business out of clients money
  • Privacy
/ Other feedback:
  • Need for an education component
  • There is as need for greater accountability by organisations which choose to offer Intensive Support Services
  • This needs to be a cross-government initative
  • Intensive Support Services can be incorporated into financial mentoring – it might not require a separate service
  • Wrap around service is needed
  • Implication for rural communities with no financial mentors
  • What are the implications for small providers (time consuming/costly)
  • Good process for specific clients if monitored carefully

Building Financial Capability Intensive Support Services Consultation document1