For years, Barbara Spode, 79, had peace of mind. If she died suddenly, for whatever reason, she felt her severely autistic daughter, India, 51, would be well looked after.

But that changed when she discovered the group home India is living in, a government-run facility providing full-time care to people with disability in Sydney's south-east, was about to be privatised.

She said her initial reaction was "incredulity, and then terrible, deep anger, and, of course, fits of despair and depression".

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The New South Wales Government introduced legislation in 2013 enabling all of its roughly 350 group homes to be handed over to private and community organisations — and the assets later sold — as part of the transition to the National Disability Insurance Scheme (NDIS).

This is supposed to pave the way for other providers to enter the marketplace in time for a predicted surge in demand. An estimated 148,000 people with disability will be accessing services through the NDIS in New South Wales by 2019.

But the State Government's withdrawal from disability housing has sparked considerable anxiety for parents who count on Ageing, Disability and Home Care (ADHC) to step in as the provider of last resort when their children are turned away from other organisations.

"I can rely on that public disability service," Ms Spode said.

"Through layers of bureaucracy, ultimately the minister and the government of New South Wales are responsible for her care."

Difficult behaviour could force daughter out of group home

India was recently kicked out of a daytime activity program run by a non-government provider when, according to her mother, her behaviour became too difficult for staff to manage.

"She has very challenging behaviour, mostly hurting herself, banging her head, which is really so distressing to see, banging her head to the point of sometimes making it bleed," Ms Spode said.

"She sometimes hits people and then is immediately very, very sorry. At the moment she tears her clothes and tears so many garments in a day, it's very difficult to keep up with her."

Ms Spode fears her daughter's behaviour could eventually mean she is forced out of her group home if the organisation that is chosen to take over the facility decides she requires too much attention and resources.

Ms Spode said hearing of the privatisation plans made her feel anger and despair. ( ABC RN: David Lewis )

If that were to happen to India after her mother's death, there is uncertainty about where she would end up, given she has no other immediate family to advocate on her behalf.

"Is she going to be put out on the street, sitting on her furniture?" Ms Spode said.

"I hope she dies before me because I want her to die with me by her side, holding her hand, helping her through the pain of whatever treatment she needed.

"And I'm not alone. I don't know a mother of a disabled person who has such complex needs who wouldn't say exactly the same. I've heard women say exactly the same, that they are afraid to die first, that they hope their child will die before them."

NDIA 'will ensure provider of last resort'

The State Government body responsible for government-run group homes, ADHC, has sought to alleviate these fears.

It told Background Briefing the federal government agency in charge of the NDIS will assume the role of provider of last resort wherever the market fails.

"With the establishment of the National Disability Insurance Agency (NDIA), they're the ones who will now be looking after the whole scheme," said ADHC deputy secretary Jim Longley.

"They're the ones who will ensure the provider of last resort."

The union covering staff at government-run group homes is fighting against privatisation. ( ABC RN: David Lewis )

It is not clear how the NDIA will do this.

It could set up its own group homes or act as an intermediary, helping evicted residents find alternative accommodation with private and community providers.

Those groups are responsible for around 60 per cent of the services available for people with disability in New South Wales and their peak body, National Disability Services (NDS), believes its member organisations can fill the gap vacated by the state government.

"I'm confident that a non-government provider of last resort can be identified and, as long as the funding is sufficient for them, they'll be able to provide all cases," said Tony Pooley, the NDS's senior manager for state operations.

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That the detail around this remains unresolved is a source of frustration for private providers and community groups, who still wonder what is required of them.

In a report published last month, the Productivity Commission acknowledged the uncertainty, warning current arrangements for a provider of last resort under the NDIS lacked clarity.

"I think there are many aspects of the whole transfer to this scheme for which it is regrettable we don't have enough detail yet," Mr Pooley said.

"Ideally the provider of last resort provisions would have been resolved and NDS has been urging the agency and indeed the government to resolve an arrangement around that for some years."

Government steps in after group home eviction

Harry Guinan, 33, knows what it is like to call on a provider of last resort after being kicked out of a group home for people with disability.

Mr Guinan, who has Down syndrome and a long list of health problems, has lived in five houses in the northern suburbs of Sydney in as many years.

Last February, Sunnyfield, a not-for-profit organisation housing Harry, announced he would have to leave.

"(I was) a bit sad at the time because I made some friends around the local community," he told Background Briefing.

"There has been some issues around the place at the house, which I'm not very keen on talking about, so I won't."

Harry Guinan has lived in five houses in the northern suburbs of Sydney in as many years. ( ABC RN: David Lewis )

Mr Guinan admits he has acted out at times, occasionally putting himself in harm's way.

There were also complaints from residents who Sunnyfield claimed were intimidated by his behaviour.

His sister, Edwina, said these episodes stem from the death of his parents several years ago and his frustration at having a disability.

"He struggles to understand those emotions and manage those emotions," Ms Guinan said.

"He doesn't like having a disability. He wants to be like other people."

Place opens up in government-run home

For privacy reasons, Sunnyfield declined to comment on Mr Guinan's case, except to say the justification for its decision to evict him was extensively discussed with his family and ADHC.

In a statement, the organisation explained that residents are asked to leave when they are not fitting in or when their support needs cannot be adequately met.

Ms Guinan is furious and insists Sunnyfield knew about her brother's complex needs before he moved in but failed to meet them, resulting in gaps in his care.

"Staff didn't take him to a blood test so his overactive thyroid was not managed for four months until my sister realised," she said.

"They ignored repeated requests from me to take him to see his psychologist over a 10-month period.

"I know of one instance where he was not supervised taking his medication and he later showed me the medication that he was meant to take."

Harry Guinan has complex needs, which his sister says were not met by Sunnyfield. ( ABC RN: David Lewis )

Ms Guinan said her brother was warned Sunnyfield would take steps to remove him if he attempted to access the house after the eviction deadline.

Luckily, he has been granted a reprieve.

After an 18 month-long search, ADHC has found room for Mr Guinan in a government-run group home.

"It took a long while, a very long while, but hearing the news from Edwina, I was more excited," Mr Guinan said.

"It's been nerve-racking a lot of the time but I've managed to pull through."

Labor pushing for parliamentary inquiry

Ms Guinan said the saga highlighted the need for the New South Wales Government to maintain its safety net for the most vulnerable.

"We would never have been able to find any place for Harry to live in without ADHC's help," she said.

"That's just the long and the short of it."

Edwina Guinan says without ADHC's help, there would be no safety net for her brother. ( ABC RN: David Lewis )

The New South Wales Labor Party is opposed to the privatisation of government-run disability housing, which will raise an estimated $800 million.

The shadow minister for disability services, Sophie Cotsis, is pushing for a parliamentary inquiry into the potential impact of the decision.

"We're not just going to outsource and privatise for the sake of ticking the box for Treasury, so the books look well-balanced," she said.

"We have a moral responsibility to ensure that people with disability have the best quality of care and they're looked after."

Process of selecting providers underway

The plan has also been criticised by the union representing disability workers, which staged a protest outside State Parliament this Valentine's Day.

"It is my firm belief that a measure of a civilised society is how we treat the most vulnerable," said the Public Service Association's Rachel Smoothy, "and by that yardstick the New South Wales Government is failing woefully."

No group home has yet changed hands, but the process of selecting private and community providers is underway, with many successful applicants already announced.

New South Wales will join the Australian Capital Territory and Northern Territory in outsourcing housing for people with disability to the private and community sector.

Governments in the other states told Background Briefing they intend to continue providing accommodation in some form, but will be watching developments in New South Wales.