The federal Labor government is moving to curb the growth of the $50 billion National Disability Insurance Scheme (NDIS) through tightened eligibility rules for children under 18 and mandatory character checks for service providers.
Health Minister Mark Butler announced the changes on Wednesday, noting the intent to bring the NDIS back to its original goal of providing care for those with permanent and significant disabilities.
The NDIS is expected to be the primary source of savings in the federal budget on May 12. The program’s cost grew by more than 10.3% last year and is projected to reach $95.8 billion by 2034-35.
Political Tension and State Backlash
The announcement has sparked a backlash from state counterparts, with Queensland accusing the federal government of abandoning families dependent on long-term care.
Queensland disability minister Amanda Camm was reportedly blocked from attending a Tuesday briefing conducted by Minister Butler and Treasurer Jim Chalmers. Only state and territory treasurers were briefed on the cuts prior to the public announcement.
Minister Camm stated that the plan is “failing kids” and expressed serious concerns regarding the long-term care of children who may be affected by these changes.
Combating Fraud and Systemic Waste
Labor intends to introduce character checks for providers to drive out “dodgy” operators and stop systemic fraud. This move follows reports that organized crime groups have infiltrated the scheme to launder money using cash kickbacks, and coercion.
Starting in July, providers offering special accommodation packages must undergo independent audits, worker screening checks, and regular reporting.
These measures target high-cost services, as approximately 41,000 participants currently utilize disability accommodation or supported independent living.
Impact on Children and Future Cohorts
State governments are preparing for more children under 18 to be transitioned away from NDIS services. This extends beyond the “Thriving Kids” program announced in August last year, which supports children with developmental delays and autism.
As of March last year, children aged 18 and under represented 52% of the 717,000 participants, yet they received only 19% of total payments, totaling $8.37 billion.
Minister Butler has previously indicated that adults with psychosocial disabilities could be the “second big cohort” to shift from the NDIS to outside services.
Redirecting Funds to Aged Care
Some of the savings generated from the NDIS will be redirected to assist older Australians. This includes funding for essential services such as dressing support, showering, and continence management.
Labor will remove out-of-pocket costs for non-clinical services within the Support at Home scheme. Minister for Aged Care Sam Rae stated these changes will accept effect on October 1 next year.
While the government describes these as “basics of ageing with dignity,” the move has faced criticism from experts and aged care providers who argue these services are vital for maintaining independence at home.
Future Outlook
The government may face continued friction with state governments, particularly Queensland, which has not yet signed an operating deal for the Thriving Kids program due to begin in October.
Further adjustments to eligibility could be likely as the government attempts to limit annual growth to between 5% and 6%.
The scheme may also see a gradual transition of more participants toward foundational supports as the government implements recommendations from last year’s landmark review.
Frequently Asked Questions
Why is the government introducing character checks for NDIS providers?
Character checks are intended to stop waste and remove “dodgy” operators involved in systemic fraud, including organized crime groups that have used the scheme to launder money.
How will the NDIS changes affect children under 18?
Eligibility rules for children under 18 will be tightened, and more children in this age group may be transitioned away from NDIS services toward other supports.
Where will some of the NDIS savings be spent?
Some savings will be used to provide essential aged care services, such as showering and continence management, by removing out-of-pocket costs for non-clinical services in the Support at Home scheme.
Do you believe the focus on fiscal sustainability outweighs the risks of transitioning vulnerable participants away from the NDIS?
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