NDIS: Major final report proposes intensive overhaul to disability services

A landmark review into Australia’s National Disability Insurance Scheme has called for a five-year legislative overhaul to transform an “out of balance” system that rewards competitive behaviour among providers and gives people with disability little to no control over which services they access.

The long-awaited probe, which was released on Thursday – a decade after the scheme was first established, said significant changes were needed to ensure eligible participants can access services.

It has called for funding under the scheme to be based on functional capacity, rather than medical diagnosis.

“Governments have come to rely on the NDIS as the dominant, and in some cases only, source of support for people with disability,” the report said.

“This has resulted in an unbalanced disability support system that relies too heavily on the NDIS at the expense of an inclusive, accessible and thriving broader disability support ecosystem.”

In total, the report proposed 26 recommendations and 139 actions to “restore trust and pride” in how disability services are funded and to ensure their sustainability for future generations.

It has called for the government to immediately focus on attracting, retaining and training disability workers to meet future workforce demands and invest in greater support outside of the NDIS.

A raft of legislative changes will be needed to underpin the scheme’s reforms, the report said, including legislation to improve eligibility and access, as well as an early intervention pathway for children.

“With children making up half of all NDIS participants, it is clear that mainstream supports aren’t meeting the needs of children and families, who are turning to the NDIS as the only source of support,” it said.

It proposed the NDIS be reworked into a three-tiered system, with the first level offering targeted individual support for those most in need delivered through the NDIS, and the second tier providing “foundational supports” outside the scheme to cover those with disabilities needing less intensive support.

One of the report’s key recommendations called on the national cabinet to agree to fund a coherent set of foundational disability supports outside individualised NDIS budgets. Reaching the government’s desired budget reduction target to $87bn in 2032-33 would be “impossible” without significant investment from outside the scheme, it said.

Despite supporting nearly 600,000 participants, annual spending on the NDIS reached $35bn in 2022-23.

At the current growth rate of about 14 per cent each year, costs are projected to rise to $97bn by 2032-33.

On Wednesday, state and territory ministers agreed to cap their share of NDIS funding from 4 per cent to 8 per cent by 2026.

The Commonwealth will fund all cost blowouts from July 1 2026.

The report highlighted “significant problems” with how the NDIS interacts with mainstream health service systems, including the aged care sector, hospitals, jails and mental health systems.

It has proposed a new, dedicated approach for people living with a psychosocial disability and called to improve access to mental health services.

It recommended the introduction of navigators to help people with disability find and access all services available to them across mainstream services, community supports, foundational supports and the NDIS.

Government Services Minister Bill Shorten said the report’s release marked a “significant moment in Australian history”, particularly for people with disability and their families.

“The objectives of the review were to restore trust, ensure sustainability and give participants a better experience and more control, by making the NDIS more about people and less about bureaucracy through greater equity, transparency and consistency,” he said.

“It is important that Australians understand changes are not going to happen overnight and any reforms adopted by the Albanese Government will be developed with the disability community to ensure a better NDIS.”

Mr Shorten said the full government response to the review would be released in 2024.

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