Ok guys, by popular demand here comes the service agreement article. It is a long one so make sure you get a cup of tea ready if you like documentation, or possibly something stiffer to drink if you are more like me.
In case you were wondering how this popped up so fast, I, in fact, did not write it all. My lovely compliance officer Jess has been working on it for a little over a week. I totally helped though, moral support and such. She does not have an account on here so I am posting on her behalf. I also get to add some notes here and there. The first part is some brief information and advice. If you want to skip that and go straight to the structure of a service agreement, scroll through until you see pictures. We used a draft of ours as the example and feel free to copy it if it helps you create your own, but probably take my business name, logo and details off of it to save some confusion. Enjoy.
It begins
At its heart, a service agreement is the written outcome of your negotiation with a provider. It clearly outlines both parties expectations of what and how supports will be delivered. You can create your own service agreement, or your provider may have a standard service agreement you can use. Providers should support you to understand any service agreement using the language and way of communicating that suits your needs. You can also ask for help from a family member or friend. Writing your own can give you more confidence when negotiating as you have laid out the terms you are looking for and the provider can decide whether those terms are acceptable or if further negotiation is needed. When you negotiate a service agreement, these are some things that are essential to understand:
What supports are being provided?
These are negotiated with your provider depending on your NDIS plan, funding and goals. They should be listed in your agreement even if it is just hours per week/day or simply âas discussedâ.
The cost of the supports
Cost negotiation is something not everyone is comfortable with however there are a few things to keep in mind:
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When possible, try to offer full (or close to full) hourly rates and make savings elsewhere. Rates that are too low risk losing providers to other participants. Obviously there will be times where this is not possible and it is important to have that discussion with the provider prior to presenting a service agreement. Make sure you know your price guide codes, their costs and if possible the SCHADS award rate for an employee performing those services. No provider will accept less that what they need to pay their staff for a start, sole traders want to be better off than they would be working for a provider. All have varying overheads to cover.
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Offer reasonable terms. Building relationship equity with a good provider will often ensure their appreciation and maybe even some âI owe youâsâ. A good service agreement should benefit both parties involved.
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Keep in mind cancellation costs and how to negotiate them in your favour. Be honest about how likely you are to cancel, what length of policy suits you, e.g., 24 hours, 7 days, and what amount youâre willing to be charged for short notice. You may need to consider the time of day services are provided, day of the week or even other irregular appointments to try and reduce cancellations on your end. You also need to be aware of how the provider will handle cancellations on their end. Participants should always consider having more than one support worker working with them, even when dealing with independents so that there is back up.
Keeping under budget is a common issue. One possible solution would be to:
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Calculate how many hours you need per week until the end of your plan.
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Calculate at MAX rates with loading and travel and other invoiceable items, then calculate what your budget can afford each week. See if there is a gap between maximum rates and what your budget allows.
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If there is a gap, try subtracting evening rates or travel. Does that get you in budget? Consider if you still need services during major holidays. Consider if there will be times or days that your informal supports can provide assistance rather than a support worker. In some cases the gap will be too great and the option will be a reduced rate.
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Negotiate this with your providers until you find the right match!
The providerâs responsibilities
These are pretty straightforward:
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courtesy and respect
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open and honest two-way communication about all aspects of the service
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privacy and confidentiality
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listening to all feedback and complaints
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the term of notice for cancelling or changing a service.
Your responsibilities
These are similar to those above but also include:
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providing any required plans or assessments to the provider (for example physio plan for an allied health assistant to use to assist you)
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identifying and reducing risks in your home
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paying all invoices for agreed services in the agreed negotiable timeframe (make sure this timeframe is realistic for both you and the provider)
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inform your provider about any changes in your NDIS plan
How long the agreement goes for and how it can be changed
This is as simple as negotiating start and end dates. It also includes steps for changing or ending the agreement. This usually includes signing and dating something in writing and deciding how much notice is reasonable for both participant and provider e.g. 1 week, 2 weeks, 1 month.
Feedback, complaints and disputes
Feeling supported to openly communicate with your provider whether things are going well or not is so important. An agreement should be explicit about who to contact and how. This should include multiple avenues to support all communication types, including telephone, email, and snail mail. Feedback benefits everyone. It is used to:
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Improve service quality for individual participants.
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Improve overall service quality of support workers and providers.
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Strengthen participant/provider relationships.
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Encourage open and honest communication between participants and providers but also between providers and their staff.
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Encourage reflection on practice for the provider.
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Inform policy and procedure.
Overall, a good service agreement should benefit everyone involved. Participants should feel confident that they are supported in getting the best value for their budget. Providers have a contract that is covered by Australian Consumer Law to prove they are acting in the best interest of their participants and ensures adequate remuneration for their skill levels and services provided.
How to create your service agreement
Keeping it in order, the first section should be about identifying who is included in this agreement. The participants full name and NDIS number should be clear. Follow this with a section outlining who is making the agreement. In some cases the participant is not capable of agreeing to terms and so the representatives details may be different.
You also need to clearly state the start and end date. The end date should coincide with your funding end or review date. This is important because if you lose or gain funding after the review, the service agreement may no longer be useful or valid.
The next section is the purpose of the agreement. This should state what the agreement covers. You can see that including a copy of your plan as part of the agreement is optional. Not everyone wants to do this, especially when engaging multiple independents or short term services. It also states what relation this agreement has to the NDIS.
The next two sections lay out the responsibilities of each party:
The providers responsibilities are pretty straight forward and should include their policy on cancellation notification on their end. You will also need to know where a copy of their policies is available to you. In some cases they are provided on request. In others they may have a website where they are available. Accurate record keeping is also important in case they ever get audited so it is important that it is listed as a responsibility.
Participant responsibilities should follow. This should include your timeframe for payment of invoicing. Some providers put as little as 7 days and this can sometimes be unrealistic. An example where this may be unrealistic is if you are a participant with many supports and limited time due to your disability you may not be checking email every day to approve invoices. Some simply choose to do so once a week. But if a provider submits the invoice on Monday and your day to check is Friday, then they will be paid outside of the agreed timeframe. Short timeframes are also frustrating when there are delays on NDIAâs end which is becoming more common. If a provider sets terms that you think will be unrealistic for you, you need to speak up and negotiate a better timeframe.
Supports and payments information is important to list in your service agreement as well. You can see in the example it refers to an attached schedule of supports. This will be a detailed form listing days, times and activities for services expected.
You can skip this and just state services as discussed if you want more flexibility but it does leave things open to interpretation on both sides and requires a lot more communication.
Some service agreements will also include a section on GST based on the structure and income of the business but not all, and GST is definitely not something that is chargeable on top of the costs listed in the price guide.
This section should lay out any costs that are not covered by the agreement and what will happen with those costs. In the vast majority of circumstances the participant is responsible for public transport costs and entrance fees and other items of that nature.
You will notice that most companies will also include a blurb about about price increases in line with the price guide. Companies charging maximum rates will continue to do so whereas if you have a negotiated lower rate the provider may apply an increase that reflects the amount supports were increased that year rather than the full amount. For example if the maximum rate was increased 3%, they may increase your negotiated rate 3%. In some cases these increases are also negotiable.
Transport costs should then be explained in more detail. This should include the hours the worker expects to be paid, the transportation fees for use of personal vehicles and who is responsible for incurred costs. If no transport is required as part of your supports this should be stated here. If supports include requiring a support worker to accompany you to an appointment, leave, and then return after a period of time to accompany you home you will also need to list the expectation for payment during the break time. In most cases if the worker cannot reasonably return home or attend other work in the time between appointments they will expect to be paid the hourly rate during this time. Sometimes it is more cost effective to book 2 separate support workers for 2 hours each to attend at the different times than it is to pay for the waiting period.
This next section is optional as it relates to GST. Not every provider is going to be GST registered. If they are it needs to be stated and included in the service agreement for legislation purposes. It is more to do with taxation than anything to do with support work. If your provider is GST registered please be nice and include it. Literally just copy this one word for word and insert your name and the provider name.
I feel like cancellation should be its own topic entirely. Cancellation is very individual to each business as businesses need to work sustainably. It is also very individual to each participant as everyone has different needs and different capacities. Always try to cover every kind of cancellation scenario that may apply to you. Some providers include travel fees in the cancellation fee, others only charge half the session. Some request 7 days notice, some only 3 hours notice. Some only charge if they cannot rebook the time with another client. Make sure you discuss this with your potential provider before creating the agreement.
Indemnity is another section that must be clear and included for legal purposes. Some providers mistake this to mean that they cannot be sued or have claims made against them at all which is not the case and is the reason why they must carry liability and indemnity insurances. That is a long story for another day.
How changes to the agreement should be made and how to end the agreement should have clear instructions and include any fees related to the changes or ending the agreement. I highly recommend changes be made in writing with both parties signing. Always make sure you include a statement that serious breaches can allow you to end the agreement on the spot without consequences. You do not want to be stuck enduring an untenable situation for any longer than necessary.
The very last part of your agreement should be your avenues of feedback and also include external avenues for complaints. Especially when dealing with sole traders as you need somewhere to go if they are not responding to issues you have raised.
Now I know I said last part, and technically it was. This next section is optional. This is where you would attach:
- a copy of your plan
- a copy of detailed schedules of supports (I have included an example of what that would look like)
- copies of any changes signed by both parties (I have also included an easy example of what that can look like)
Ok, that is officially the end. Let us know if you made it this far. Or even if you have questions.
Thank you,
Jess and Lauren
