National Disability Insurance Scheme (NDIS) costs

• The National Disability Insurance Scheme (NDIS) is a complex and highly valued national reform. If implemented well, it will substantially improve the wellbeing of people with disability and Australians more generally.
• The level of commitment to the success and sustainability of the NDIS is extraordinary. This is important because ‘making it work’ is not only the responsibility of the National Disability Insurance Agency (NDIA), but also that of governments, participants, families and carers, providers, and the community.
• The scale, pace and nature of the changes that the NDIS is driving are unprecedented in Australia. To reach the estimated 475 000 participants in the scheme by 2019-20, the NDIA needs to approve hundreds of plans a day and review hundreds more. The reality is that the current timetable for participant intake will not be met. Governments and the NDIA need to start planning now for a changed timetable, including working through the financial implications.
• Based on trial and transition data, NDIS costs are broadly on track with the NDIA’s long term modelling, but this is in large part because not all committed supports are used. While some cost pressures are emerging (such as higher numbers of children entering the scheme), the NDIA has put in place initiatives to address them. The benefits of the NDIS are also becoming apparent. Early evidence suggests that many (but not all) NDIS participants are receiving more disability supports than previously, and they have more choice and control.
• In the transition phase, the NDIA has focused too much on quantity (meeting participant intake estimates) and not enough on quality (planning processes), supporting infrastructure and market development. For the scheme to achieve its objectives, the NDIA must find a better balance between participant intake, the quality of plans, participant outcomes, and financial sustainability.
  • Greater emphasis is needed on pre-planning, in-depth planning conversations, plan quality reporting, and more specialised training for planners.
• A significant challenge in the transition phase is developing the supply of disability services and growing the disability care workforce. It is estimated that 1 in 5 new jobs over the next few years will need to be in disability care, but workforce growth remains way too slow.
  • Emerging shortages should be addressed by independent price monitoring and regulation, more effective coordination among governments to develop markets (including intervening in thin markets), a targeted approach to skilled migration, and equipping participants to exercise choice.
• The interface between the NDIS and other disability and mainstream services is critical for participant outcomes and the financial sustainability of the scheme. Some disability supports are not being provided because of unclear boundaries about the responsibilities of the different levels of government. Governments must set clearer boundaries at the operational level around ‘who supplies what’ to people with disability, and only withdraw services when continuity of service is assured.
• NDIS funding arrangements should better reflect the insurance principles of the scheme. Governments need to allow flexibility around the NDIA’s operational budget and commit to establishing a pool of reserves.

NDIS costs on track, but some challenges

The National Disability Insurance Scheme (NDIS) is a better way of providing disability support and care. Once fully implemented, it is expected that around 475 000 people with disability will receive individualised supports, at an estimated cost of $22 billion each year, with improved prospects of employment and social participation.

'If implemented well, the NDIS will substantially improve the wellbeing of people with disability, and Australians more generally,' Social Policy Commissioner Richard Spencer said.

The Productivity Commission today released a final study report which shows that while NDIS costs are broadly on track with the National Disability Insurance Agency’s (NDIA’s) long-term modelling, this is mainly because participants are not using all the supports in their plans.

The Australian and State and Territory Governments agreed at the establishment of the NDIS that the Commission would review NDIS costs in 2017.

'The scale, pace and nature of the changes that the NDIS is driving are unprecedented. A key concern that has emerged from our extensive consultations is the speed of participant intake. This is impacting on planning processes, the quality of plans, supporting infrastructure and market development,' Commissioner Angela MacRae said.

The report calls for governments and the NDIA to start planning for a slower intake of participants, and ensure current support is not withdrawn too early. It also states that there needs to be greater emphasis on pre-planning, in-depth planning conversations, reporting on the quality of plans, and more specialised training for planners.

'Key challenges identified in the study report include development of support services that will be needed under the new scheme and growing the disability care workforce,' Mr Spencer said.

The Commission recommends:

• a shift towards price monitoring and regulation, independent of the NDIA
• better coordination among governments to develop markets
• a targeted approach to skilled migration to increase the disability workforce
• better equipping participants to exercise choice.

'There is enormous goodwill behind the NDIS. Now is the time to put the goodwill into action,' Mr Spencer said.

The full study report about National Disability Insurance Scheme (NDIS) Costs can be accessed from the Commission’s website at www.pc.gov.au

Chapter 1 provides relevant background to the study.

Chapter 2 examines how scheme costs are tracking and chapter 3 looks at the evidence, to date, on scheme benefits.

Chapters 4 and 5 discuss two of the key cost drivers for the scheme — eligibility (which determines the number of participants in the scheme), and what supports scheme participants receive (as determined by the rules relating to support coverage and the planning process).

Chapter 6 looks at how the NDIS interfaces with non NDIS disability services and mainstream services and the ways in which this impacts on the financial sustainability of the scheme.

Chapters 7 to 9 look at the supply side of the equation. Chapter 7 assesses whether providers will be able to meet demand for disability service. Chapter 8 examines price caps for the NDIS; and chapter 9 considers workforce issues.

Chapter 10 looks at whether participants can successfully engage with the scheme.

The last three chapters of the report cover governance arrangements (chapter 11), funding (chapter 12) and data and evidence (chapter 13).