When Michelle Newland was 19 she never thought she would be living in a nursing home.

Key facts: More than 6,000 Australians under the age of 65 live in aged care facilities

More than 6,000 Australians under the age of 65 live in aged care facilities About 2,000 of those have joined the National Disability Insurance Scheme

About 2,000 of those have joined the National Disability Insurance Scheme So far, only 2 per cent of these participants receive housing support in their plans

The aspiring primary school teacher had just completed her first year of university when she had a severe asthma attack which left her with a brain injury.

Ms Newland's parents had no choice but to move her into an aged care facility in Melbourne.

I can't really remember much because of my memory loss," Ms Newland, now 35, explains of her time living in a nursing home.

"But it was a pretty lonely time for me."

Her parents admit it was a last resort.

"At the time the rehab centre said it cost too much, and all they had to offer was a nursing home," her mother Ann Newland said.

"I didn't realise that there was nowhere else for young people like Michelle to go to.

"She couldn't come home because the house wasn't ready, she was still very, very sick and very disabled and also there wasn't any funding."

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Is the NDIS helping?

Michelle Newland's situation is not unique.

More than 6,000 Australians under the age of 65 live in aged care facilities.

Of those, about 2,000 have joined the National Disability Insurance Scheme, but so far only 2 per cent of these participants receive housing support in their plans.

"We don't think the NDIS is at fault here, but the statistics show that we aren't solving a problem," says George Taleporos from the Summer Foundation — an organisation advocating for young people being forced to live in aged care facilities.

"A lot of people are in aged care because they don't have alternative housing options or don't have 24/7 support.

"It's very hard to move out of a nursing home when you don't have anywhere to go."

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By 2020, 460,000 Australians are expected to be part of the NDIS.

But only participants with high support needs will receive funds for specialist disability accommodation.

National Disability Services chief executive Ken Baker thinks the quality of NDIS plans need to improve.

"Only 6 per cent of people will receive specialist payments," he told PM.

"The group of people with very high support needs often require specialist housing and that housing is in short supply," Mr Baker said.

"Housing development takes a long time and it's quite complicated about how the payments are made and calculated."

Former disability discrimination commissioner Graeme Innes agrees that the funding process needs to be simplified.

"The NDIS solution is good, they are helping to some degree," Mr Innes explained.

"But the problem is by the way they are allocating funds is that they are pushing people into group homes rather than letting people go to a house of their choice."

Still far from solved

Disability activist Bronwyn Morkham, from the Young People in Nursing Homes National Alliance, is frustrated with the system.

Bronwyn Morkham is frustrated with the system. ( ABC News )

Three years on from a senate inquiry into the situation, Ms Morkham says she is not seeing the type of investment that is needed to fix the problem.

"We need to have the trained workforce, the care model in place and the funding to provide the care required, as well as accessible accommodation," she said.

She is calling on the NDIS to meet its obligations for young people who have no other option than to stay in aged care facilities.

"We continue to fall back and rely on the aged care system, which is not resourced and is not designed to support the very different needs of these young people," Ms Morkham said.

"We had thought the NDIS would be the answer here to come along and provide the shortfall in funding that aged care facilities don't have.

"But unfortunately we are still far away from the system response we've got to have if we are going to stop talking about this in the future."

After spending 16 months in an aged care facility, Ms Newland was able to move home to live with her parents.

Ann Newland hopes it will be easier for other young people in her daughter's position ( Summer Foundation: Fred Kroh )

In 2016, she moved into her own place, next door to her parents in Melbourne's western suburbs.

Ms Newland receives high-level support with care workers always at hand.

"It's really fantastic, I love my home," she said.

Since the NDIS hasn't rolled out in her area, her parents relied on state funding and community support.

Her mother Ann hopes it will become an easier process for others.

"Michelle now lives in this beautiful home that works so well, she's just blossoming," Ms Newland said.