Rick Morton

Despite claims the government’s reform of the National Disability Insurance Scheme is focused on fraud, a third of the savings will come from pushing children off the scheme. 

A concerted effort to remove children from the National Disability Insurance Scheme will reduce spending by $500 million in the next year, accounting for a third of all scheme savings booked to the federal budget bottom line over the same period.

An extraordinary uptick in eligibility revocations from July last year – which mostly affect children with disabilities aged seven and eight in the so-called “early childhood approach” – coincided with some 95 new staff in the dedicated scheme eligibility branch. This year, the branch has had its budget tripled to $16 million, on a par with the more high-profile Fraud Fusion Taskforce.

In November, The Saturday Paper revealed the National Disability Insurance Agency was sending out 1000 templated eligibility reassessment letters every week, in a scattergun approach that alluded to “evidence” held by the scheme’s managers to prove a person was no longer eligible for support. The letters gave a participant just 28 days to provide anything they felt might demonstrate otherwise.

These letters were not accompanied by phone calls. They included a phone number to a general call centre that could not answer questions from participants and did not disclose on what basis the agency made its decision that the person was not eligible.

People with serious and profound disabilities had their eligibility revoked only to later have it reinstated after fighting for review. NDIS Minister Bill Shorten’s new legislation, which creates a provision allowing participants 90 days to respond to information requests from the agency related to their eligibility, has been deliberately sidestepped by the NDIA.

“Before the change in approach, and there has been a change, you used to get a phone call that would explain an eligibility reassessment was going to happen, what that looked like, how they were going about it and now, now we just get a letter sent in the post with no follow-up,” a disability advocate tells The Saturday Paper.

“They can’t realise their budget savings with [the former] approach, however. This [now] is automation. Template letter spat out of the printer and sent by mail. If you don’t respond in 28 days or they don’t like whatever additional evidence you’ve managed to go and pay for in that time, you’re out.”

The number of children accessing the NDIS has concerned agency officials and ministers since the earliest trial sites, particularly in South Australia, when projections were vastly outstripped by reality.

In the wake of the scheme’s creation, state and territory governments removed services that might have supported some children with developmental delays and autism, leaving families with few other places to go for help.

Little has changed except now the NDIA is ramping up its efforts to remove children from the scheme; there is still nowhere else for them to go.

“As soon as I started asking questions about what could be done, the [NDIS official] started auditing me almost … It was to the point that he had me in tears. Like, he was trying to say I had done something wrong. He was like a bulldog.”

The agency is selling this as a success story, claiming the children being removed have “achieved their goals”.

“The 2023-24 Budget measures aimed to deliver improved participant outcomes and increased sustainability of the NDIS by improving early intervention outcomes for children in the NDIS, improving participant planning processes, and improving consistency in home and living eligibility decisions for participants with complex and high support needs,” says the NDIA annual report for 2023-24, released five days before Christmas.

“As part of the … budget, the NDIS Financial Sustainability Framework was agreed by National Cabinet to achieve a target of 8 % growth in Scheme expenses from 1 July 2026.

“The NDIA has been progressing these initiatives in collaboration with people with disability and the wider disability community.

“Part of this work has led to a moderation in plan inflation, stabilisation in numbers of participants new to supported independent living supports, and increased numbers of participants leaving the NDIS as their support needs stabilise, including children who leave the NDIS after achieving their goals.”

One therapist describes this last statement as “an outright lie”.

Later in the same annual report the “performance measure” recording how many children have “benefited from the scheme and no longer need supports” is listed as unavailable. The data is missing for 2023-24, the agency says, because of an update to its computer system called PACE.

Letters of rejection seen by The Saturday Paper admit that the children being removed from the scheme will continue to require “intensive support” and therapy and that, in many cases, their impairment has not changed or become manageable – only that the NDIS will no longer fund the support.

Changes to the legislation have given legal protection to such manoeuvring by, according to the NDIS website, making it “clearer when a mainstream system is responsible for providing early intervention support”.

One letter sent to the family of a young girl with childhood apraxia of speech (CAS), advising she is no longer eligible for the scheme, says “it is clear the challenges [the girl] faces are unique and significant, and she would benefit from support”.

“The evidence provided does not indicate that early intervention supports are most appropriately funded by the NDIS. We acknowledge that the evidence from [redacted] Speech Pathologist… indicates that [the girl] will require intensive speech pathology for her childhood apraxia of speech, however early intervention for [her] neurodevelopmental impairment and the supports she requires are the responsibility of the Health System to provide and not the NDIS.

“We acknowledge that the Health System may not be equipped with ‘enough’ funding to appropriately support an individual’s needs through limits on subsidised services.

“However, as per the Productivity Commission’s Inquiry Report on Disability Care and Support (2011), the NDIS cannot subsidise ‘shortfalls’ in other systems of support. As such, a limited capacity of the appropriate system is not a test of whether the NDIS is the most appropriate support provider.”

This is one example of the NDIA approach, which is employed across various impairments and conditions.

“Well, the health system doesn’t fund the support so what we’re talking about is parents who can afford to go private will go private and those who can’t, their kids just won’t get the help they need,” an allied health professional tells The Saturday Paper.

“These reforms were partly sold as a fix to equity. They’re already making things worse.”

On Monday, outgoing minister Bill Shorten was quoted in The Sydney Morning Herald on his legacy and claimed the NDIS is “no longer the major problem child” of government.

“There is bipartisan agreement about the path of sustainability and making sure that the scheme is acting in the best interest of participants,” Shorten said.

“I think a Labor government is better to run the NDIS, but I acknowledge that [Coalition spokesman] Michael Sukkar was much more constructive than the Greens. In this term [of parliament], it was one of the few areas where the Coalition were pretty constructive.”

Shorten did not respond to questions from The Saturday Paper about the fraud and rorting narrative developed by Labor-linked polling and research firm RedBridge Group and whether it was misleading in the context of legislative reform.

In the Herald interview he hinted at the fragile nature of agreements struck between the Commonwealth and state and territory governments. Historically, these jurisdictions have never been able to agree precisely on what is an NDIS support and what is a “mainstream” support typically funded by state governments.

The states are concerned by new agreements to cap NDIS spending growth at 8 per cent and to increase the financial contribution from state governments. They are also worried about the development and funding of “foundational” supports – a tier of support that does not yet exist, which is planned for people with disabilities who don’t qualify for the NDIS but need more help than is offered by mainstream services.

“States want to make sure this isn’t some sort of process to dump hundreds of thousands of kids out of the NDIS, which it’s not, but I can understand that anxiety,” Shorten told the Herald.

“We chuck on our war paint, but we always seem to get there in the end.”

Foundational supports are scheduled to begin in July, but no detail about what they are, how much they will cost and how many people will have access to them has been released. In New South Wales, the state government quietly extended existing contracts for community services by six months, indicating one of the biggest states won’t have its commitment ready in time.

“They are exiting to nothing,” an advocate says of people affected by the NDIS changes.

“Support is pulled instantly by the NDIS, even when they get it wrong, and they often do and have to reinstate it, so people go from having probably a reasonable amount of support for some of them to nothing overnight.”

The focus on scheme sustainability is, in many respects, understandable. Fraud and rorting have been a constant and significant feature since the beginning of the NDIS, but efforts to hunt fraudulent providers and dodgy claims account for, at best and using Shorten’s own figures, just $200 million out of a $19 billion forecast reduction in scheme expenses over the next four years.

Even this figure is worth interrogation. Disabled people and their families are being accused of wrongdoing and having their planning budgets slashed because of a renewed focus on “payment integrity”, which can be used to stop actual fraud or, far more often, to reject previously accepted claims that were approved and funded by the NDIS.

When the family of a young boy with behavioural and processing impairments moved states and lost access to some service providers, for instance, they asked to move behavioural support funding to another part of the package in their son’s plan, because of the change in circumstances.

The experience left his mother in tears.

“As soon as I started asking questions about what could be done, the [NDIS official] started auditing me almost. And I’ve always been aboveboard, always had letters of support from professionals to support the funding, and it just felt like I was being questioned on everything,” the mother, who asked not to be named, tells The Saturday Paper.

“He kept saying, ‘Just because it has an “I Heart NDIS” sticker doesn’t make it okay.’ And I had no idea what he was talking about.”

The mother faced the prospect of the NDIS raising a debt against her because her son’s plan funded a special tricycle that was approved but that the scheme now deems a non-support.

“It was to the point that he had me in tears. Like, he was trying to say I had done something wrong. He was like a bulldog,” the mother says. “Fine, tell me it’s no, but I’d like a reason.”

The review decided behavioural support funding could not be used in her son’s case and refused her request to have this funding moved to another part of his plan. It also cut a further $1500 from his support under the “consumables” category, a common target in recent reviews.

“It might not sound like a lot to them,” the mother says, “but it’s a huge amount to us.”

The new NDIS legislation strengthens an existing debt raising power, making it easier for agency officials to take back money from participants for things now deemed ineligible, including services the NDIS decides are “mainstream” and better funded somewhere else.

In its annual report, it has made a provision for the misuse of this debt-raising power. Some $9 million has been set aside for the potential repayment of debts raised from providers and participants – $6.6 million and $2.5 million respectively – that may not, in fact, have been owed.

“The agency is reviewing the circumstances in which debts were historically raised against support claims from some participants and providers,” its notes to the financial statements for 2023-24 disclose.

“As the Agency has identified that some historical participant and provider debts require further assessment, a provision for the estimated financial impact of these assessments has been reported. The financial impact is based on the results of actuarial analysis to date.”

A spokesperson for the agency said participants are now safer than ever from erroneous debts because the “CEO must sign off this decision first”, although this is not enshrined in the legislation.

This is familiar terrain and far from reassuring to participants who are used to error-prone decision-making at the agency and pre-planning documents riddled with basic inaccuracies about the participants themselves.

An insistent push to deliver a $19 billion downward revision in NDIS spending over the next four years only amplifies the problem and lends itself to shortsightedness.

The scheme’s reviewing actuary, Guy Thorburn, from the Australian Government Actuary, was given the job of checking the agency’s sustainability framework. He pointedly called out the myopic focus “solely on total costs” as a misinterpretation of the national cabinet agreement.

“This is a key element of ensuring the Scheme is sustainable. However, the NDIS Rules require that the FSR [financial sustainability report] also reports on participant outcomes,” he writes in his letter included in the annual report.

“The sustainability of the Scheme is supported by both the quantity and quality of the Scheme expenditure. I expect the FSR will increase its focus on participant outcomes over time.”

In a single year, participant satisfaction in the NDIS has fallen from 75.9 per cent to 68.5 per cent and the performance of the agency in meeting its own legislated guarantee on timeliness of decision-making has collapsed.

Making key access decisions within 21 days or allowing “sufficient time to provide information within 90 days” and other critical benchmarks were met just 32.9 per cent of the time in the past financial year, crashing from 64.7 per cent the year before.

Systems at the agency have broken down and even rudimentary budgeting errors have been flagged in the most recent annual report. Some $30 million worth of forecast recoveries from the Fraud Fusion Taskforce, made as part of an estimate in the May 2024 budget, will not actually be realised by the NDIA but will “instead be realised through law enforcement agencies rather than flowing through the Agency”.

In the midst of this, the NDIA has had to refer some of its own staff for investigation to those same law enforcement agencies following the parliamentary inquiry into the provision of more than $100 million in Salesforce IT contracts where procurement staff were treated to lavish dinners at high-end restaurants and days out golfing at exclusive Victorian courses on the Mornington Peninsula.

The Salesforce contacts were for the NDIA’s new PACE IT systems, which have contributed to the collapse of performance measures. They were principally planned to increase efficiency and, somewhat ironically, combat fraud and ensure “payment integrity”.

On Christmas Eve, the then acting NDIA chief executive, Samuel Porter, wrote to the Joint Committee of Public Accounts and Audit secretary, Dr Kilian Perrem, to advise of an update to its internal investigation.

“The NDIA has also referred certain related gifts, benefits and hospitality matters, and other matters arising from its investigation to relevant independent law enforcement bodies and regulators for their individual consideration and any action they consider appropriate,” Porter wrote.

“It’s critical to both good decision-making and the public’s continued confidence in the integrity of the NDIA that this investigation is conducted fairly and according to proper process. To protect the integrity of the investigation, it is not appropriate to make any further comment while it is underway.”

A spokesperson for the NDIA said in a statement, “all decisions regarding the scheme are made in the best interests of participants”.

“When a child is no longer eligible for the NDIS, their early childhood partner will assist in connecting the child and their family to relevant government and community supports and services in their local area,” the spokesperson said.