This is an update of an earlier quick guide by Luke Buckmaster and Shannon Clark
What is the National Disability
Insurance Scheme?
The National
Disability Insurance Scheme (NDIS) provides funding to people who have
permanent and significant disability for supports to help them in their daily
lives, participate in the community and reach their goals. It also provides
funding for early intervention for children to reduce the impacts of their
disability later in life.
The NDIS began on 1 July 2013 with trial sites in Tasmania,
South Australia, Victoria and New South Wales, with full scheme rollout
commencing in July 2016. The NDIS is now available in all states and
territories, with Western Australia’s full transition to the NDIS to be
completed by 30
June 2023.
The NDIS is an individualised, fee-for-service form of
funding. It is based on the premise that people with disability each have
different goals and support needs and should be able to exercise choice about
the supports they require. Each NDIS participant has a plan that contains their
goals and funded supports that the National
Disability Insurance Agency (NDIA) has determined to be reasonable
and necessary supports.
The NDIS is based on social insurance
principles, in that it uses actuarial estimates of long-term and lifetime
costs, and is based on the concept that support, investment and early
intervention may help the long-term functional capacity of people with
disability. It is not means tested and, like many other Australian Government
social policy programs—such as Medicare and the Pharmaceutical Benefits Scheme—it
is an uncapped (demand-driven) scheme.
The NDIS replaced the previous system of block
funding, in which funding for supports went directly to providers rather
than individuals on the basis of the supports they requested.
Key terms
- Participant—a person who has been found eligible for NDIS
supports
- Plan—an individualised package of supports that the NDIA has
agreed to fund, and the document setting out those supports and the
participant’s goals
- Local
Area Coordinators (LACs)—workers contracted by government-funded
organisations, who are often a participant’s main point of contact with the
NDIS, and help them implement their plans and connect with community services
and other government services
- Supports—specific
therapies, assistive technology items, paid assistance from a support worker,
or other types of care and support funded by the NDIS
- Support worker—a person paid to provide care and/or assistance to
an NDIS participant
- Informal
supports—unpaid support and care provided to an NDIS participant by family
members, friends, carers and members of the community
- Review—a review by the NDIA of a person’s plan, typically because
the plan is due to expire or because of a change in circumstances. A review may
also be a review
of a reviewable decision (that is, a decision that the NDIA has made that
falls under section 99 of the National Disability Insurance Scheme Act 2013,
e.g. that a person does not meet the access criteria)
- The
Early Childhood Approach (formerly the Early Childhood Early Intervention,
or ECEI, pathway)—a specific pathway for some children under 7, focused on
providing supports intended to reduce the functional impact of the child’s
disability later in life. Not all children in this pathway continue on to
become NDIS participants
- Participant
Service Guarantee—a charter with key performance indicators, principles and
timeframes for decisions that the NDIA measures itself against, which the
Government intends
to legislate
- Host jurisdiction—a particular state
or territory where the NDIS is operating
- Functional capacity assessment—an assessment of a person’s
functional capacity, using standardised tests administered by an allied health
professional.
Objectives and principles of the
National Disability Insurance Scheme
The NDIS was established with bipartisan support
incorporating views from people with disability and the disability sector to
the Productivity Commission’s 2011 inquiry into Disability
Care and Support. That inquiry set the foundations for the scheme and
continues to be referred to as the basis for policy decisions.
The National
Disability Insurance Scheme Act 2013 (NDIS Act) (Cth)
established the NDIS and the NDIA, which is the independent statutory agency
responsible for administering the NDIS. The NDIS Rules are legislative instruments made under the NDIS Act which contain the
operational and administrative details of the NDIS.
Objects of the NDIS Act (as outlined in section 3)
include:
- supporting the independence and social and economic participation
of people with disability
- providing reasonable and necessary supports, including early
intervention supports, for NDIS participants
- enabling people with disability to exercise choice and control in
the pursuit of their goals and the planning and delivery of their supports
- facilitating the development of a nationally consistent approach
to the access to, and the planning and funding of, supports for people with
disability
- promoting the provision of high quality and innovative supports
that enable people with disability to maximise independent lifestyles and full
inclusion in the community.
When giving effect to the objects of the Act, regard must be
given to such factors as the financial sustainability of the NDIS, the
provision of services by other agencies, departments or organisations, and the
need for interaction between mainstream services (such as health) and supports
funded by the NDIS.
Who is eligible for the NDIS and
who receives supports?
Around one in six people in Australia (in 2018 this was
estimated to be about 4.4
million people) has a disability. As of 31 December 2021, more than 500,000
of these are NDIS
participants.
To become an NDIS participant, a person must:
- be aged under
65 at the time of applying
- reside
in Australia and be an Australian citizen, permanent resident or Protected
Special Category visa holder
- have a
permanent disability that affects the person’s capacity for social or
economic participation and results in substantially reduced functional capacity
to undertake one or more of the following activities:
- communication
- social
interaction
- learning
- mobility
- self-care
- self-management
- be likely to require support under the NDIS for the person’s
lifetime.
The NDIA publishes data
on participants by disability type, including in its quarterly
reports. As of 31 December 2021, a third of participants had autism as
their primary disability, almost one in five participants had an intellectual
disability as their primary disability, and just over one in ten had a
psychosocial disability as their primary disability. Other primary disability
types with less than 20,000 participants included cerebral palsy, acquired
brain injury, global developmental delay, visual impairment, multiple
sclerosis, stroke and spinal cord injury.
Figure 1: NDIS participants by primary disability type,
as of 31 December 2021
Source: National Disability Insurance Agency, NDIS
Quarterly Report to disability ministers: appendices (Table E.12),
(Canberra: National Disability Insurance Agency, 31 December 2021); see also
notes 26 and 27 in Tab E.
What supports does the NDIS fund?
The NDIS
funds supports and services in areas such as mobility, assistive
technology, personal care, home modifications, transport, finding and keeping a
job, therapy, and help with household tasks. It also funds providers to cover
building and maintenance costs of specialist
disability accommodation (SDA) options for people with very high support
needs and extreme functional impairment.
The NDIS does not provide funding for supports
unrelated to the participant’s disability or its functional impact on their
lives (such as groceries), or supports that the NDIA
considers would be better funded by other systems, such as health or
education.
How is the NDIS funded and how much
does it cost per year?
The NDIS is funded through a pooled
approach between the Commonwealth and state/territory governments, with the
latter’s contributions based on bilateral
agreements with the Commonwealth. Each state and territory contributes cash
payments and in-kind services equivalent to what they would have paid if the
NDIS was not established. The Commonwealth is then responsible for the balance
between the total NDIS costs and the state and territory contributions,
including any costs outside those agreed in the bilateral agreements. The
Commonwealth currently contributes more
than half of total costs for the scheme.
Figure 2 sets out state, territory and Commonwealth
Government contributions to the NDIS in 2019–20 and 2020–21, according to the Productivity
Commission’s Report on Government Services.
Figure 2: NDIS contributions by jurisdiction for 2019–20
and 2020–21*
Source: Productivity Commission, Report
on Government Services 2022: Services for People with Disability (Canberra: Productivity Commission, 25 January 2022), Table 15A.1; see also
notes (i) and (j) and relevant notes for each jurisdiction.
*Data is subject to several limitations, as outlined in notes
attached to the original source (above). Dollar amounts are in 2020–21 dollars.
Most expenditure on the NDIS is on participant costs.
According to the NDIA’s September
2021 quarterly report (p. 96), in 2020–21 participant costs amounted to
$23.2 billion. For comparison, costs in 2019–20 and 2018–19 amounted to $17.6
billion and $10.5 billion respectively, reflecting the scheme’s staged
roll-out. The NDIS Scheme Actuary produces cost projections in annual financial
sustainability reports, which are summarised in the NDIA’s annual
reports.
Part of the Commonwealth’s contribution comes from the DisabilityCare
Australia Fund (DCAF). The DCAF is a sovereign wealth fund established
under the DisabilityCare
Australia Fund Act 2013 (DCAF Act). The DCAF is a special
account that operates to reimburse the Commonwealth, states and territories
for their NDIS expenditure. Since July 2014, some
revenue from the Medicare levy has been invested in the DCAF. Other
Commonwealth NDIS expenditure is provided from consolidated revenue or
borrowings.
Table 1 outlines when current bilateral agreements began,
along with estimated annual contributions from 2018–23. Allocations are
reviewed every five years, with current projections all
ending by December 2023 (following a commissioned independent cost review).
Table 1: Projected state/territory contributions to the
NDIS, as set out in full-scheme bilateral agreements
| State/ territory |
Commencement of bilateral agreement |
2018–19 |
2019–20 |
2020–21 |
2021–22 |
2022–23 |
| NSW |
2018 |
$3.2 billion |
$3.3 billion |
$3.5 billion |
$3.6 billion |
$3.7 billion |
| VIC |
2019 |
N/A |
$2.6 billion |
$2.7 billion |
$2.8 billion |
$2.9 billion |
| ACT |
2019 |
N/A |
$168.8 million |
$175.5 million |
$182.6 million |
$189.9 million |
| Qld |
2020 (some clauses from 2019) |
N/A |
N/A |
$2.1 billion |
$2.2 billion |
$2.3 billion |
| SA |
2018 |
$747.9 million |
$777.7 million |
$808.7 million |
$840.9 million |
$874.4 million |
| TAS |
2019 |
N/A |
$244.3 million |
$254.0 million |
$264.1 million |
$274.6 million |
| NT |
2019 |
N/A |
$103.6 million |
$107.7 million |
$112.0 million |
$116.5 million |
| WA* |
2017 |
N/A |
N/A |
N/A |
N/A |
N/A |
Source: Bilateral
Agreement between the Commonwealth of Australia and the State of New South
Wales on the National Disability Insurance Scheme, 25 May 2018: 14; Bilateral
Agreement between the Commonwealth and Victoria on the National Disability
Insurance Scheme, 17 June 2019: 15; Bilateral
Agreement between the Commonwealth of Australia and the Australian Capital
Territory on the National Disability Insurance Scheme, 22 March 2019: 1
14; Bilateral
Agreement between the Commonwealth of Australia and State of Queensland on the
National Disability Insurance Scheme, 9 July 2019: 1, 14; Bilateral
Agreement between the Commonwealth of Australia and the State of South
Australia on the National Disability Insurance Scheme, 28 June 2018: 1,
14; Bilateral
Agreement between the Commonwealth of Australia and the State of Tasmania on
the National Disability Insurance Scheme, 10 December 2019: 1, 14; Bilateral
Agreement between the Commonwealth and the Northern Territory Governments on
the National Disability Insurance Scheme, 22 March 2019: 1, 15.
* Western
Australia’s contributions are subject to a
complex set of conditions based on actual participant numbers and are divided
into NDIA costs and participant costs. Western Australia is not due to reach
full-scheme status until 2023.
Governance, oversight and appeals
The NDIA Board is responsible for NDIS governance. The Board
sets the NDIA’s strategic direction, ensures its compliance with statutory
requirements, monitors performance and reports to the Ministerial Council.
The following bodies are responsible for oversight of
various facets of the NDIS:
The NDIA publicly reports on its activities in the following
forms:
- Annual
reports, prepared by the Board, which include information and analysis on
participants and/or funding or provision of supports by the Agency
- Quarterly
reports, prepared by the Board and provided to the Ministerial Council
every three months, which include information on participants in each host
jurisdiction and/or the funding or provision of supports by the Agency in
relation to each host jurisdiction.
The Administrative
Appeals Tribunal and the Commonwealth
Ombudsman deal with appeals and complaints about NDIA decision-making. The NDIS Quality and
Safeguards Commission regulates registered NDIS providers and deals with
complaints about quality and safety.
Ongoing challenges
Challenges that have arisen as the NDIS has been implemented
include:
- questions about the consistency
of NDIA decision-making, and the extent to which decisions should be based
on recommendations for supports from medical and allied health professionals or functional
capacity assessments
- whether the aged care system provides sufficient supports to people
who acquired their disability after they turned 65, or for Aboriginal and
Torres Strait Islander people after they turned 50
- the interface
between the NDIS and other service systems, such as health, education and
prisons
- ‘thin
markets’—that is, limited providers and services for participants,
especially in regional, rural and remote areas
- limited
uptake among particular cohorts, such as Aboriginal and Torres Strait
Islander people living in remote communities and people experiencing
homelessness
- the complexity
of the scheme for participants, their families and carers
- violence, abuse and neglect experienced by people with
disability, including NDIS participants, as is currently being examined by the Royal Commission into
Violence, Abuse, Neglect and Exploitation of People with Disability
- future funding capacity, with the Scheme Actuary suggesting in
the 2020–21 Annual
Financial Sustainability Report (pp. 22–23) that costs over the following
four years could exceed previous projections by $12.1 billion.