$240M Boost to Disability Care in NZ to Benefit Over 7,000 in Residential Facilities

The move aims to modernize and stabilize the country’s disability support system, with particular emphasis on consistency, sustainability, and fairness.

More than 7,000 disabled New Zealanders living in residential care will soon experience enhanced support and service stability, thanks to a landmark $240 million investment announced as part of Budget 2025. The move aims to modernize and stabilize the country’s disability support system, with particular emphasis on consistency, sustainability, and fairness.

The four-year funding injection will supplement the over $1 billion already allocated annually to Disability Support Services (DSS), which currently support over 52,000 disabled individuals across New Zealand. The announcement has been welcomed by advocates, providers, and families, marking a turning point in the government's approach to long-standing systemic challenges in the disability care sector.

Annual $60 Million Allocations Starting July 2025

From 1 July 2025, the Government will increase annual DSS funding for residential care by $60 million. This significant uplift will support 89 residential care providers across the country, allowing them to offer more reliable and tailored care to disabled residents.

Disability Issues Minister Louise Upston highlighted the critical need for this change, emphasizing the Government's dedication to building a more transparent and predictable disability care infrastructure.

“Previously, funding for carers was unpredictable, subject to change or interruption, and varied across regions,” Upston stated. “The new funding model will remove that uncertainty.”

A New National Residential Care Pricing Model

One of the core components of the reform is the implementation of a new residential care pricing model. This model is designed to bring uniformity across the sector while also taking into account regional cost disparities such as housing expenses.

The pricing model will:

• Standardize care rates across the country

• Replace thousands of previously inconsistent, ad hoc funding arrangements

• Account for geographic cost variations

• Enable accurate forecasting of expenditure by DSS

• Support the Government in making better-informed future funding decisions

Responding to Findings from the Independent Review

The announcement follows recommendations from a comprehensive independent review conducted last year. The review identified several urgent issues, including escalating costs, inadequate payment systems, and poor fiscal planning. It also revealed that the system DSS used for provider payments had not undergone a significant update since 2016, leading to disjointed and unsustainable funding practices.

Minister Upston said the funding boost and updated model are direct responses to those findings and reflect a proactive stance on reform.

“It’s vitally important public money going to providers ultimately benefits the disabled people it’s intended for,” she emphasized.

Securing Continuity and Trust in Care

With half of DSS's operating budget already devoted to residential services, the new investment underscores a commitment to ensuring continuity of care. Families and providers alike are expected to benefit from the greater certainty and improved service capacity brought about by these changes.

The funding model will also introduce more flexibility for providers, giving them the tools and resources to adapt to residents' diverse and evolving needs.

“My absolute priority is to ensure continuity of care to disabled people, and to support providers to transition to this new model,” Upston affirmed.

Looking Ahead

As the changes roll out from July 2025, the disability care sector is poised for a period of transformation. With robust, equitable, and sustainable funding in place, the Government aims to establish a more resilient support structure that better serves the disabled community across the country.

This investment is not only a financial commitment but also a step towards restoring trust and dignity in New Zealand’s disability care framework.