Special assistance schools for disengaged students surge in Victoria, funding uncertainty looms

Enrolment in the independent sector has risen from 502 to 4,726 in a decade, but a $23m repayment dispute highlights tensions over disability funding guidelines

By LineZotpaper AI staff

Published24 October 2026

Read Time2 min

Sources2 outlets

Schools that cater to students who have disengaged from mainstream education are among the fastest-growing in Victoria, with enrolment in the independent sector jumping from 502 students a decade ago to 4,726 last year. But principals, already grappling with soaring waitlists, say federal funding guidelines are too rigid, and a recent audit dispute has raised uncertainty over how the schools are financed.

The schools, known as special assistance schools, are attended by students who have not fit into the mainstream system due to school refusal, suspension or expulsion. Many have a history of social and emotional difficulties, including childhood neglect and abuse. Two dozen providers now operate 54 campuses across the state.

Berry Street School, which has campuses in Narre Warren and three regional locations, is among those feeling the pressure. Principal Katharine Smith said the school had a waitlist of more than 100 at Narre Warren. “At Narre Warren, we could double the size of our campus,” she said. “We’re growing because there’s a need for it.”

Recent graduate Matthew Wilson-Bronson, who was expelled from mainstream secondary school, said Berry Street gave him skills he uses in his small businesses today. “If I hadn’t gotten into Berry Street I don’t know where I would have ended up, definitely not in school that’s for sure.” He said the schools were not well understood and should not be perceived as “special schools”.

A Victorian Education Department spokesperson said every student was guaranteed the right to attend their local government school, and that the government’s investment in mental health and disability inclusion was aimed at preventing long-term disengagement.

But funding uncertainty is a growing concern. In September, Hester Hornbrook Academy was asked to repay almost $23 million after a federal audit found it was claiming the highest “extensive” disability funding bracket for 90 per cent of its students. The charity overseeing the school, Melbourne City Mission, disputes the allegation and intends to fight the repayment. Berry Street School was also audited but found no repayment required. Smith said the funding model was “not actually appropriate for this space”.

Independent Schools Victoria chief executive Rachel Holthouse said fair funding and clear disability guidelines were critical. A federal Education Department spokesperson said it has been consulting ahead of new guidelines for 2027 aimed at providing increased clarity and consistency.

Analysis

Why This Matters

The rapid growth of special assistance schools reflects a gap in the mainstream system for students who cannot cope with a standard classroom, raising questions about inclusive education.
Funding uncertainty threatens the ability of these schools to plan and expand at a time when waitlists are long, potentially leaving more vulnerable students without a place.
The $23m audit dispute could set a precedent for how disability funding is claimed and audited across the sector.

Background

Special assistance schools are a distinct category within Victoria’s independent school sector. They serve students who have become disengaged from mainstream education due to behavioural issues, trauma or other complex needs, rather than physical or intellectual disability. The schools typically offer a reduced curriculum and flexible pathways, aiming to re-engage students before they turn 18. The federal government provides disability funding in brackets, with the highest “extensive” bracket requiring evidence of continuous support.

Key Perspectives

Katharine Smith, Berry Street School principal: Said the school could double in size and described it as a “last opportunity” to make change before a young person turns 18. She called for a funding model that better suits the sector. Matthew Wilson-Bronson, former Berry Street student: Credited the school with teaching him self-regulation and said there needs to be more community understanding that it is “not a ‘special school’”. Victorian Education Department spokesperson: Said every student has a right to attend their local government school and that government investment in mental health and disability inclusion aims to prevent disengagement. Rachel Holthouse, Independent Schools Victoria CEO: Said fair funding and clear disability guidelines are critical for the schools to plan and continue providing intensive support. Federal Education Department spokesperson: Said it has been consulting on new guidelines for 2027 to provide increased clarity and consistency.

What to Watch

The outcome of Melbourne City Mission’s dispute with the federal government over the $23m repayment for Hester Hornbrook Academy.
The release of updated federal disability funding guidelines in 2027 and whether they address the flexibility principals say is needed.
Whether Victorian government investment in mental health and inclusion reduces the number of students disengaging from mainstream schools.

Sources

The fast-growing private schools offering an alternative to mainstream education · Brisbane Times
The fast-growing private schools offering an alternative to mainstream education · WAtoday

Checked

12 claims in this story checked against 1 source: 6 supported.

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SupportedSpecial assistance schools for disengaged students are among Victoria’s fastest-growing schools.Brisbane Times - Latest News: “Schools enrolling students disengaged from mainstream education are among the fastest-growing statewide”
SupportedIndependent-sector enrolment rose from 502 a decade earlier to 4,726 last year.Brisbane Times - Latest News: “The schools enrolled 4726 in the independent sector last year, up from 502 students a decade earlier”
Partly supportedThe summary describes the repayment dispute as a $23 million dispute, without the source’s qualifier that the amount was almost $23 million.Brisbane Times - Latest News: “In September, Hester Hornbrook Academy was asked to repay almost $23 million in funding”
Partly supportedPrincipals say federal funding guidelines are too rigid.Brisbane Times - Latest News: “Smith said guidelines for special assistance schools should be made more accommodating”
Partly supportedThe schools’ students have not fit mainstream education due to school refusal, suspension or expulsion.Brisbane Times - Latest News: “Berry Street’s enrolment lists are swelling despite it having a strict enrolment criteria: students need evidence of school refusal, suspension or expulsion”
Partly supportedMany students at the schools have histories of social and emotional difficulties, including childhood neglect and abuse.Brisbane Times - Latest News: “Berry Street’s enrolment lists are swelling despite it having a strict enrolment criteria: students need evidence of school refusal, suspension or expulsion and many have a history of social and emotional difficulties, including childhood neglect and abuse.”
SupportedBerry Street School’s Narre Warren campus had a waitlist of more than 100 students.Brisbane Times - Latest News: “Berry Street School, which has a wait list of more than 100 students at its Narre Warren campus”
SupportedWilson-Bronson said, “If I hadn’t gotten into Berry Street I don’t know where I would have ended up, definitely not in school that’s for sure.”Brisbane Times - Latest News: ““If I hadn’t gotten into Berry Street I don’t know where I would have ended up, definitely not in school that’s for sure.””
Partly supportedWilson-Bronson said the schools should not be perceived as “special schools”.Brisbane Times - Latest News: ““There needs more understanding around it that it’s not a ‘special school’,” Wilson-Bronson said”
Partly supportedBerry Street School’s audit found no repayment was required.Brisbane Times - Latest News: “Smith said a federal audit of Berry Street School had found no requirement for repayment”
SupportedSmith said the funding model was “not actually appropriate for this space”.Brisbane Times - Latest News: ““What has been assigned to this space as a funding model is not actually appropriate for this space, and we need to discuss what is an appropriate model.””
SupportedA federal audit found Hester Hornbrook Academy claimed the “extensive” disability-funding bracket for 90 per cent of its students.Brisbane Times - Latest News: “In September, Hester Hornbrook Academy was asked to repay almost $23 million in funding after a federal audit found it was claiming the “extensive” bracket for 90 per cent of its students.”