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PC News - December 2017

National Disability Insurance Scheme costs

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The final report of the Commission’s study into the cost of the National Disability Insurance Scheme (NDIS) was released in October 2017.

The report found that there is an extraordinary level of commitment to the success and sustainability of the NDIS by governments, people with disability and their families and carers, providers of disability services, and disability advocates. If the scheme is implemented well, it will substantially improve the wellbeing of people with disability and Australians more generally.

Unprecedented national reform

The NDIS is a major, complex national reform. The scale, pace and nature of the changes that the NDIS is driving are unprecedented in Australia – to reach the estimated 475 000 participants in the scheme by 2019-20, the National Disability Insurance Agency (NDIA) needs to approve hundreds of plans a day and review hundreds more. The intake of participants with approved plans is already falling behind the expected pace and if the current trend continues, it will take an additional year before all eligible participants are in the scheme (figure).

Figure: Participant numbers will increase substantially over the next three yearsa

  • Participants ('000)

    Growth in number of participants in the scheme. This figure shows the growth in participant numbers predicted by NDIA modelling and the actual number of participants during the transition. Under the trial phase (July 2013 to June 2016) the scheme increases to around 30 000 participants. From June 2016 (the transition phase) the number of participants is predicted to increase significantly reaching 475 000 by 2019-20. The actual number of participants at 30 June 2017 is around 80 per cent of the predicted intake.

    a Scheme participant projections are based on projections prepared by the Scheme Actuary for the NDIA’s 2015-16 Annual Financial Sustainability Report using data at 30 June 2016. The Commission adjusted the projected number of participants for the four quarters of 2016-17 to be consistent with the bilateral estimates reported in the latest NDIA quarterly report.

    b Bilateral estimates based on the NDIA’s quarterly reports.

The Commission recommends that governments and the NDIA start planning now for a slower intake of participants, including working through the financial implications.

Based on trial and transition data, the Commission found that NDIS costs are broadly on track with the NDIA’s long-term modelling, however, this is mainly because scheme participants are not using all the supports in their plans.

The Commission found that in the transition phase, the NDIA has focused too much on quantity (participant intake) and not enough on quality (planning processes), supporting infrastructure and market development. The report calls for greater emphasis on pre-planning, in-depth planning conversations, reporting on the quality of plans, and more specialised training for planners.

Other key challenges identified in the report include developing the supply of disability services and growing the disability care workforce (1 in 5 new jobs over the next few years will need to be in disability care, but workforce growth remains too slow). The Commission recommends:

  • independent price monitoring and regulation
  • more effective coordination among governments to develop markets (including intervening in thin markets)
  • a targeted approach to skilled migration to increase the disability workforce
  • better equipping participants to exercise choice.

The Commission also notes that the interface between the NDIS and other disability and mainstream services is critical for participant outcomes and the financial sustainability of the scheme. The Commission recommends Governments set clearer boundaries at the operational level around ‘who supplies what’ to people with disability.

National Disability Insurance Scheme (NDIS) Costs

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