Building the National Disability Insurance Scheme

Dr Luke Buckmaster, Social Policy

Key issue
The National Disability Insurance Scheme (NDIS) has raised expectations of a transformation in the provision of support to people with disability, but there are substantial challenges associated with implementing the scheme.

Origins of the NDIS

The NDIS (also known as DisabilityCare Australia), a new scheme for providing support for people with disability, has commenced in locations across Australia. The launch of the scheme is the culmination of years of advocacy from the disability and carers sectors. It builds on work undertaken through the National Disability Strategy, the Productivity Commission (PC), Council of Australian Governments and agreements reached between the Commonwealth and state and territory governments.

The NDIS is intended to replace the current system of shared provision and funding of disability services by the Commonwealth and state and territory governments under the National Disability Agreement (NDA). Under the NDA, broadly speaking, the Commonwealth has responsibility for administering disability employment services, while the states and territories administer services such as accommodation support, community support and community access services for people with disability.

In 2011, a PC report on long-term care and support for people with disability found that the current disability support system is ‘underfunded, unfair, fragmented and inefficient. It gives people with a disability little choice, no certainty of access to appropriate supports and little scope to participate in the community’.

The PC recommended that the current system should be replaced by a new disability care and support scheme, the NDIS. The Gillard Government announced that it would ‘start work immediately with states and territories on measures that [would] build the foundations for a National Disability Insurance Scheme’.

What is the NDIS?

The NDIS is a major and highly complex reform to the way in which disability support is funded, accessed and provided. It is jointly governed and funded by the Commonwealth and participating state and territory governments.

The main component of the NDIS is individualised, long-term funding to provide support for people aged under 65 years (and then until they enter aged care) with permanent and significant disability or eligible for early intervention support. Participants will meet with the NDIS Agency to identify a set of supports agreed as 'reasonable and necessary' to meet their goals. Participants will be provided with funding for these supports and will have choice over how their needs are met (including choice of provider). When the NDIS is fully implemented it is expected that around 460,000 Australians will receive support under this component of the scheme.

The NDIS also has a broader role in providing information, coordination, referral and funding to assist people with disability (including those not eligible to participate in the main component of the scheme).

What is the NDIS launch?

The scheme is being introduced in stages from 1 July 2013, commencing with a pilot phase known as the NDIS launch. This encompasses:

South Australia (SA), where support will be provided to children aged up to 14 years
Tasmania, where support will be provided to young people aged 15–24 years
the Hunter region of New South Wales (NSW), where support will be provided to people aged up to 65 years and
the Barwon region of Victoria, where support will be provided to people aged up to 65 years.

From 1 July 2014, the launch will commence in:

the Australian Capital Territory (ACT) (participants aged up to 65 years)
the Barkly region of the Northern Territory (NT) (participants aged up to 65 years) and
the Perth Hills area of Western Australia (WA) (participants aged up to 65 years).

Concurrent with the NDIS launch, the Commonwealth and Western Australian Governments will jointly fund two sites that will operate under the WA My Way model, in the Lower South West and in Cockburn-Kwinana (participants aged up to 65 years).

There is no launch site in Queensland (though the full scheme will be introduced there from 2016).

Full introduction of the NDIS

Agreements have been reached for full coverage of the NDIS to commence in all states and territories except WA. The timetable according to which all eligible residents will be covered is as follows:

the ACT by July 2016
NSW and SA by July 2018 and
Tasmania, Victoria, Queensland and the NT by July 2019.

The NDIS will be available in these jurisdictions to all Australian residents who meet disability/early intervention criteria and are under the age of 65 years on the day they apply to participate in the scheme.

What are the challenges?

An important challenge to be faced in building the NDIS is whether disability service providers will have the capacity to meet the increased demand for support. Will small providers be able to adapt, or will the scheme be dominated by large providers? Will there be enough disability care workers to provide support?

Another challenge will be containing the cost of the scheme. Potential cost pressures over time may include higher than expected demand for support, expectations of NDIS participants about the level of funding that will be made available to them and the costs of providing services.

Pressure to include people who acquired their disability over the age of 65 may increase, particularly if services available through the aged care system are not equivalent (or thought to be equivalent) to those available through the NDIS.

Joint governance of the NDIS by Commonwealth, state and territory governments could also present challenges, particularly if disputes arise over matters relating to the design of the scheme (for example, significant policy changes in response to cost pressures).

Shared funding of the NDIS may present future problems for the scheme. The PC recommended that the Commonwealth become the single funder of the NDIS in order to ‘avoid the inefficiencies of the Commonwealth-State “blame game” that afflicts some shared funding arrangements’. Shared funding was contemplated by the PC, but not preferred. It presents the possibility of some blurring of the lines of responsibility for funding the NDIS, and hence some risk to the funding certainty the NDIS was intended to provide.

Expectations about the extent, standard and distribution of support to people with disability under the NDIS are high, and it is likely some will be disappointed. The scheme will undoubtedly transform many lives for the better, but it will need to overcome many complex challenges to achieve its promise.