Australian government cracks down on NDIS fund misuse

Australian government cracks down on NDIS fund misuse | Insurance Business Australia

Life & Health

Australian government cracks down on NDIS fund misuse

Agency issues reminders to plan managers and support coordinators

Life & Health

By
Roxanne Libatique

The Australian Government is implementing measures to address misuse within the National Disability Insurance Scheme (NDIS).

Last week, the National Disability Insurance Agency (NDIA) and the NDIS Quality and Safeguards Commission reminded plan managers and support coordinators of their duties to prevent the inappropriate use of funds.

NDIS Minister Bill Shorten highlighted that anonymised data matching between NDIS plan manager ABNs and the Australian Taxation Office (ATO) showed that 343 of the 900 ABNs would have failed a statement of tax record at the time.

“Overspending of NDIS plans remains a key issue, particularly where someone encourages a participant to spend all of their NDIS funding before the end of their plan, known as intra-plan inflation, so they can receive extra funding within their set plan timeframe,” he said.

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Primary drivers of intra-plan inflation

Under the NDIS, participants receive a budget to purchase approved supports in line with their plans. Spending a budget prematurely does not justify a plan review.

According to the NDIA, the primary drivers of intra-plan inflation include using more hours and higher rates of supports than funded, overspending core budgets beyond their intended purpose, and incorrect claiming of supports.

Examples of incorrect claims include: mobile phones, cleaning fee bonds, theme park passes, treadmills, TV antennas, and bird seed.

Impact of intra-plan inflation on NDIS costs

An NDIA analysis revealed that intra-plan inflation added over $3.3 billion to NDIS costs for the 12 months ending February 2024.

Around 15% of participants spent their plan budgets before the end of their plan, with a quarter of these participants accounting for 62% of the inflation, surpassing $2 billion. Within this group, 3,500 participants were responsible for over $800 million of the costs.

NDIS plan managers and support coordinators inappropriately use funding

Shorten pointed out that while most plan managers and support coordinators perform their roles effectively, some are exploiting participants and taxpayers.

“We know in some circumstances unexpected things happen and people do need more support before the end of their plan, but the analysis by the NDIA has found this is happening far too often and tells us something is not right with the scheme,” he said. “NDIS plan managers and support coordinators have a significant role in supporting participants to spend appropriately within their plans, but the data shows that this is not happening.

“We are seeing examples where plan managers are facilitating an early exhaustion of a plan and then contacting the NDIA demanding a reassessment and a funding increase. This exploitation is inexcusable and has to stop.”

How the government improves the NDIS

The NDIS allocates nearly $500 million annually to plan managers. In response, the government has invested $20 million to consult and design improved navigation of services for people with disabilities, including reassessing the roles of plan managers and support coordinators.

The NDIA and the NDIS Commission are issuing a joint letter to plan managers and support coordinators to reinforce their responsibility in ensuring participants spend funding in line with their approved NDIS supports.

Shorten reaffirmed the government’s commitment to strengthening the integrity of the NDIS and ensuring its sustainability.

“We are continuing to work alongside the disability community to strengthen the integrity of the scheme and make it stronger so it endures for generations to come,” he said.