‘Green shoots’ in cutting runaway NDIS costs

Has the agency running the $42bn National Disability Insurance Scheme kicked the cost can down the road by doing fewer plan reassessments in the last quarter?

The NDIS has seen a significant drop in plan reassessments.

The National Disability Insurance Agency reassessed tens of thousands fewer NDIS plans in the March quarter than a year earlier as it flagged success in bringing cost growth in the $42bn scheme under greater control.

An analysis of NDIS data shows that in the quarter to March 2024 there were 40,708 plan reassessments completed compared to 71,160 in the March 2023 quarter, a drop off of more than 30,000.

But with the data showing 71 per cent of plan reassessments between July 2023 and March 2024 resulted in a budget increase, there is concern the slower ­assessment rate might be playing a role in reducing the rate of NDIS cost growth.

The latest NDIS quarterly ­report noted annualised plan ­inflation had dropped to 7.5 per cent, the lowest in three years and below the 8 per cent cost growth target set by national cabinet last year.

In her report commentary, NDIA chief executive Rebecca Falkingham said the figures ­revealed the “green shoots of NDIS cost stabilisation”.

It is understood the drop off in reassessments was caused primarily by a steep recent increase in NDIS participants, often through a plan manager or provider, ­requesting plan “top ups” having exhausted their funding allocation.

These unscheduled requests require more administrative scrutiny, and time, than those that reach the end of the plan period and are more likely to be “rolled over”.

The increased volume is also leading to the NDIA falling behind its participant service guarantees. In the March quarter just 21 per cent of plan reassessments were actioned within 21 days compared to its participant service guarantee target of 95 per cent.

In last year’s March quarter the rate was 79 per cent.

Grattan Institute disability program director Sam Bennett said he had some sympathy for the NDIA, as the scheme had become ­“impossible to administer in its current form”.

“The recent decrease in plan inflation should be read with caution since it appears to largely result from operational collapse, given that legislated service standards have recently nosedived,” Dr ­Bennett said.

“The agency needs to be given the tools it needs to make predictable, objective and consistent decisions within the funding envelope set by the government.”

Greens senator Jordon Steele-John said the NDIA’s decision to “put the brakes on plan reassessments is leaving disabled people and our families in limbo”.

“I’m hearing people are having to resort to plan reassessments ­because the agency has cut their NDIS plans, and had failed to listen to disabled people’s needs,” Senator Steele-John said.

Grattan Institute's Disability Program director Sam Bennett.

An NDIA spokesman said that “since late 2023 we have received a significant increase in the volume of requests (around double) from participants asking for a change to their NDIS plan (and) this has ­impacted the agency’s capacity to meet participant service guarantee time frames over the recent quarter”.

“Many of these requests are driven by overspending of plan budgets,” he said.

The spokesman said approximately two-thirds of the unscheduled ­requests for review “don’t have the required evidence to successfully initiate a reassessment of ­supports, which is contributing to them taking considerably longer to process”.

“We are providing greater clarity and education for participants about what evidence they need to be eligible for an unscheduled review,” he said. “We expect this to have an impact on the volume of requests.”

The spokesman said plan inflation had been trending down since September 2022 due to factors such as more children with developmental delay transitioning out of the scheme and a stabilising of those using supported independent living.

The sustainability of the NDIS is one of the government’s most pressing budgetary concerns, with NDIA projections in 2023 that annual scheme costs could head to more than $100bn within a decade.

An independent review of the scheme reported last December with a series of recommendations around sustainability. The government has yet to formally respond to the review but has undertaken a number of reforms since late last year.

NDIS Minister Bill Shorten has moved to crack down on fraud and waste in the scheme and proposed new legislation to stop participants, mostly through third parties, exhausting the funds early then seeking an automatic “top up”.

That legislation has been ­delayed in the Senate until after the parliamentary winter break, which the minister says will cost more than $1bn and threaten ­national cabinet’s cost target.

Dr Bennett said targeting fraud and waste would not be enough to set the NDIS on a sustainable path.

“The focus should be on urgent scheme redesign around who is eligible and how funding is determined,” he said. “That’s the work that needs to happen now. Of course, driving out fraud is important but it won’t touch the sides of what is needed here.”