ILO can seem like a brilliant but distant concept for people outside of WA. There is a good reason for this. Of the ~$50,000,000 spent on ILO last year, 74% was spent in WA. This isn’t unusual, given that WA largely pioneered and operationalised the ILO model.

The WA experience provides insight into how ILO might mature across Australia. In WA, ILO accounted for 5.36% of all accommodation based committed supports (SIL and ILO), while across the rest of Australia, it accounted for 0.23%. This extreme gap is accounted for by the fact that the WA ILO model is relatively mature – what happens if the rest of Australia achieves ILO maturity?

If the rest of the market catches up with ILO, then the implied maturity size of ILO is ~$310,000,000 annually. This is quite a substantial dent to put in the already shrinking SIL market. Indeed, our reading of the NDIS actuarial review suggests that ILO maturity isn’t accounted for in their SIL placement trajectory. While full ILO deployment would displace an additional ~900 potential SIL participants, it is challenging to model ILO entry into the future. However, we know that ILO is likely to impact the projected ~1200 SIL clients entering each year.

For the rest of Australia to catch up with WA, ILO would serve approximately 3000 customers, up from the current base of just 196 people using ILO support model payments outside of WA. Perhaps more curiously, ILO Exploration and Design was used by just 522 people in Australia last year, suggesting that the market must make deliberate efforts to catch up with our western counterparts.

The ILO exploration model comprised average payments of $2,000 per participant. This equates to roughly 20 hours of coordination effort to complete the ILO exploration forms and identify the appropriate supports for a customer. This number seems reasonable for Empathia Group based on our ILO service model design.

It does appear that the agency is making a concerted effort to kick start ILO. For example, in WA, the ratio of Stage 1 customers to stage 2 customers is just 28%, suggesting some degree of maturity. Nationally, this ratio is 225%, implying that ILO is in the ramp-up phase in the rest of Australia.

The type of people accessing ILO support is broadly similar to other NDIS cohorts. As expected, 55% of ILO users are people living with an Intellectual Disability or Down Syndrome, consistent with their SIL user rate.