National Disability Insurance Scheme (NDIS) costs

Position

Position paper

This position paper outlines the Commission's early thinking on NDIS costs. The purpose of this position paper is to seek feedback on the Commission's preliminary conclusions, and on any additional issues that should be considered before the public release of the final study report.

You were invited to examine the paper and to make a written submission or comment by 12 July 2017.

Download the overview

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  • The National Disability Insurance Scheme (NDIS) is a complex and highly valued national reform. The scale, pace and nature of the changes it is driving are unprecedented in Australia. If implemented well, it will substantially improve the wellbeing of people with disability and Australians more generally.
  • The level of commitment to the success and sustainability of the NDIS is extraordinary. This is important because 'making it work' is not only the responsibility of the National Disability Insurance Agency (NDIA), but also that of governments, participants, families and carers, providers, and the community.
  • Based on trial and transition data, NDIS costs are broadly on track with the NDIA's long-term modelling. While there are some emerging cost pressures (such as higher numbers of children entering the scheme), the NDIA has put in place initiatives to address them. The benefits of the NDIS are also becoming apparent. Early evidence suggests that many (but not all) NDIS participants are receiving more disability supports than previously, and they have more choice and control.
  • Nevertheless, the speed of the NDIS rollout, as specified in Bilateral Agreements between governments, has put the scheme's success and financial sustainability at risk. It has resulted in the NDIA focusing too much on meeting participant intake estimates and not enough on planning processes, supporting infrastructure and market development.
    • This focus is manifest in poor outcomes such as confusion for many participants about planning processes; rushed phone planning conversations; inadequate pre-planning support for participants; problems for providers with registering, pricing and receiving payment; and a lack of effective communication with both participants and providers.
  • For the scheme to achieve its objectives, the NDIA must find a better balance between participant intake, the quality of plans, participant outcomes, and financial sustainability. Steps are now being taken by the NDIA to better balance these aspects. Greater emphasis is needed on pre-planning, in-depth planning conversations, plan quality reporting, and more specialised training for planners. The Commission is unable to form a judgment on whether such a refocus can be achieved while also meeting the rollout timetable.
  • The interface between the NDIS and other disability and mainstream services is also critical for participant outcomes and the financial sustainability of the scheme. Some disability supports are not being provided because of unclear boundaries about the responsibilities of the different levels of government. Governments must set clearer boundaries at the operational level around 'who supplies what' to people with disability, and only withdraw when continuity of service is assured.
  • A significant challenge is growing the disability care workforce required to deliver the scheme — it is estimated that 1 in 5 new jobs created in Australia over the next few years will need to be in the disability care sector. Present policy settings are unlikely to see enough providers and workers as the scheme rolls out. Some emerging shortages need to be mitigated by better price monitoring and regulation; better tailored responses to thin markets; formal and informal carers allowed to provide more paid care; and a targeted approach to skilled migration.
  • NDIS funding arrangements could better reflect the insurance principles of the scheme, including by allowing more flexibility around the NDIA's operational budget and providing a pool of reserves. Funding contributions made 'in-kind' must be phased out.