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We have considered the key challenges

In June 2023, we released our What we have heard report. After carefully reviewing all the evidence, we identified five key challenges that had to be addressed:

  1. Why is the NDIS an oasis in a desert?
  2. What does reasonable and necessary mean?
  3. Why are there many more children in the NDIS than expected?
  4. Why aren’t NDIS markets working?
  5. How do we ensure the NDIS is sustainable?

The What we have heard report also identified additional areas for improvement, including quality and safeguards and housing and living.

Addressing these key challenges and areas for improvement is essential to creating a trusted and sustainable NDIS that puts people with disability at its centre.

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Why is the NDIS an oasis in the desert?

The NDIS was designed to be one part in an ecosystem of supports to ensure Australians with disability were able to enjoy the same opportunities as others in the Australian community.

Every government in Australia - including local councils - committed to the goals outlined in the National Disability Strategy 2011-2020 and again in Australia’s Disability Strategy 2021-2031. Despite these repeated commitments, there appears to have been insufficient progress in making mainstream services more accessible and inclusive.8

In addition, the Productivity Commission in 2011 recommended all people with disability or affected by disability would have access to information, linkage and referral services to ensure support from any system outside the NDIS, including mainstream and community services. It also recommended community capacity building activities to support people with disability to participate in their local communities, and the continuation of home and community care services for people with lower-level needs or shorter-term disability. These have not been fully delivered.

The significance and complexity of introducing the NDIS saw governments prioritising its rollout and getting people into the scheme as quickly as possible. While understandable, this came at the expense of continuing to reform mainstream services to make them more accessible and inclusive.

Important programs and services that supported all people with disability were also rolled into the scheme, leaving those who were not eligible for the NDIS without many former supports. While governments may have hoped the Information, Linkages and Capacity Building (ILC) program would meet the needs of people with disability outside the scheme, its wide scope, limited funding and reliance on small, short-term grants meant gaps remained. In addition, Local Area Coordinators, who were meant to support those outside the scheme and have a role in inclusion and building social and community capital, were diverted into planning for NDIS participants.

The ramifications are felt throughout the NDIS and in the wider disability community today.

The failure of tier 2 has left significant support gaps and seen the closure of many community services. More and more organisations are only interested in offering services to those with NDIS plans and certain line items in those plans.

– Carer 9

In trying to correct for the underfunded, inconsistent and unfair arrangements that existed prior to the NDIS, governments have come to rely on the NDIS as the dominant, and in some cases only, source of supports for people with disability - the oasis in the desert. This is to the detriment of all people with disability, particularly those outside the scheme, and is contributing to ongoing inequality between participants and those who are not eligible for the NDIS.

It seems to be a box ticking process. If your disability is listed then you get some support, but if it isn’t then the answer is simply no help required. There seems to be no support to help those with a disability that is permanent and cannot be cured that affects ability to learn at school when the education department does nothing to help either… My children cannot get the support they need to be successful and meet their potential at school because I cannot afford private tutoring or technical supports for them to use whilst at school and home. Their specific learning disabilities are not recognised by NDIS

– Carer for person with disability not on the NDIS 10
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What does reasonable and necessary mean?

Problems with the NDIS access and planning process were the most commonly raised issues during this Review. At best, people described the planning process as confusing and frustrating. At worst, it was described as traumatic.

As we outlined in our What we have heard report, we believe a lack of clarity about what supports should be considered reasonable and necessary is at the heart of many of the scheme’s issues including:

  • stressful, time-consuming and poor planning experiences
  • inconsistent and inequitable decisions about funding
  • disputes between participants and the NDIA.

It has contributed to a breakdown in trust between participants and the NDIA. It has also placed pressure on the sustainability of the scheme.

The criteria for reasonable and necessary supports were deliberately kept broad, to make sure supports can be tailored to the individual. However, this has made it difficult for NDIA decision‑makers to make consistent decisions. Participants don’t understand what supports are considered reasonable and necessary or how the NDIA applies it when making decisions. They don’t know what evidence to provide to show their supports are reasonable and necessary, or how evidence will be used. Inconsistent and unclear decisions are making participants feel untrusted, disempowered and angry.

Arbitrary rules - what is reasonable and necessary to me is not the same as it is to my planner… Being told a service is not reasonable and necessary by your planner but knowing someone (whom is in the exact same situation) else's planner has approved it.

– Participant 11

This type of inconsistency frequently arises when arbitrary tests of what may be deemed reasonable and necessary (or not) are applied to the costs of every individual support, rather than to the whole budget, based on a participant's agreed needs. This adds unnecessary layers of complexity to decision-making within an already complex process. It reduces participant choice and control. By breaking things down to the smallest level, we have lost sight of the big picture and the whole person.

In addition, applicants for the NDIS have to put forward the worst versions of themselves to gain support. The access and planning process uses a deficit model that is disempowering and counter to the vision for the NDIS to uplift and empower people with disability to participate socially and economically.

The process to determine a participant’s reasonable and necessary supports is now a contested, disempowering, stressful argument. It creates rigid plans that prevent participants from responding to changes over time. Such inflexibility acts as a perverse incentive to seek reviews of plans. It may result in wasteful expenditure on reports to justify a new or more of a specific type of support when, in fact, time and money would be saved if there were greater flexibility within a whole budget approach to reasonable and necessary support.

As a participant I have found the whole process stressful & defeating

– Participant 12

These failings are compounded in First Nations and culturally and linguistically diverse communities, who are routinely subject to decisions being made without recognition and understanding of their culturally specific concepts of care, disability and community obligations.

This narrow, adversarial approach is one of the reasons why there has been a breakdown of trust between people with disability and the NDIA. The NDIA is considered not to value the experience and insights or trust the motives of participants; and participants lose trust in the motives, processes and personnel of the NDIA. Rebuilding this trust is essential to fixing the NDIS.

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Why are more children in the NDIS than expected?

In our What we have heard report, we found many more children are entering the scheme than was expected. This partly reflects overall higher rates of disability among young children than was expected by the Productivity Commission in 2011. It is also a consequence of fewer supports for children with disability in mainstream settings.

With so few supports outside the NDIS, it is not surprising that parents are fighting to get their children with developmental concerns or disability into the NDIS. After receiving early intervention supports, they are reluctant to leave the scheme for fear of being left without support. In addition, early intervention has not always been based on best practice and there has been too little support for families. All have combined to produce poor outcomes for children and families. These failings have also placed financial pressure on the scheme.

The prevalence of disability and developmental concerns in children, currently 20 per cent of all Australian children, makes this a mainstream issue requiring a mainstream response. With children making up half of all NDIS participants, it is clear mainstream supports aren’t meeting the needs of children and families, who are turning to the NDIS as the only source of support.

Because there are so few services offered outside the NDIS, families are forced to push for access to the NDIS and maximum plan funding - even when that model might not lead to the best outcomes for their child.

– Healthy Trajectories Child and Youth Disability Research Hub 13

This starts with inconsistency across mainstream services for identifying disability and developmental concerns early. It leaves some children missing out on critical early intervention that can improve their life outcomes.

Within the NDIS, supports are skewed towards those delivered in clinical settings. This does not reflect best practice, where effective support is primarily delivered in natural settings, where children live, play and learn. With little guidance or information about how best to support their child, families are often left isolated and stressed.

My kids miss out on social/community participation opportunities with kids like them and instead spend huge amounts of their free time and school time doing draining one on one therapy with the clinics that we can get a spot in - where the practices are not necessarily neuro-affirming.

– Carer 14

Providing an individualised budget does not address the ways in which mainstream services are failing to adequately support children with disability and developmental concerns. It is producing poor outcomes. Australian children and their families deserve better.

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Why aren’t NDIS markets working?

Markets in the NDIS have not worked as originally imagined. Competition has not encouraged innovation or increased the diversity of services for all participants in all locations. In some cases, it has led to poor, or even no services. Of greatest concern is that a failure of competition and regulation has opened the door to exploitation and abuse. As the Disability Royal Commission has rightly identified, this cannot be allowed to continue.

Critically, the focus on market competition has neither driven inclusion nor helped to nurture connections with family, friends and community. In fact, sometimes the exact opposite has occurred.

Workforce quality, training, and retention are also major issues. These failings undermine outcomes for participants and contribute to increasing scheme costs.

Workforce shortages are real and impacting the sector across the board. It reduces the capacity of support providers to provide consistent and reliable supports.

– Provider 15

NDIS markets are not like other markets. They are social markets that need effective stewardship. Poor market design is creating perverse incentives and regulatory oversight is not proportionate to risk. The current fee-for-service model rewards providers for the volume of supports they deliver, with little incentive to improve quality, be innovative or responsive to the needs of all participants. Price caps have become price floors.

I try to use mainstream services and products rather than go to disability specific market due to the ridiculous prices charged by providers. As has been stated time and again, an able bodied person can go to an allied health professional and be charged $90, but I go for the same service and because I am NDIS funded I get charged more than $200 … Not only is it discriminatory but also costs the government more dollars, and the person with disability gets less support

– Participant 16
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The NDIS must be sustainable

It is in the interests of everyone in the disability sector - including people with disability, service providers and governments - to secure the future sustainability of the NDIS.

In 2013, just as the NDIS was being launched, Dr Simon Duffy, a British social policy reformer visited Australia. He warned:

Another economic issue that has bedevilled public services and individualised funding is the impact that any new system has on demand for that funding. It is clear that if you design a system in the wrong way you can invite new levels of demand, generate inflationary expectations and increase costs in ways that seem totally detached from the real level of need in the community. Often this money goes into services - but does not benefit people

– Dr Simon Duffy 17

This year, Dr Duffy and NDIS participant Dr Mark Brown were invited by the Disability Advocacy Network Australia to review the NDIS. They concluded:

The most important problem is that the growing cost of the NDIS will eventually break the bond of trust between people with disabilities and society as a whole. Unless these problems are addressed economic pressure will almost certainly undermine political support for the NDIS. In fact a strong case can be made for treating sustainability as a fundamental foundation of any system of human rights.

- Dr Simon Duffy and Dr Mark Brown18

They make the point that a human right which cannot be sustained is a human right denied.

We share their concern. Despite not yet reaching maturity, the NDIS already supports more than 610,000 people (101,000 more participants than projected by the Productivity Commission in 2017) and costs Australian taxpayers more than $35 billion in 2022-23 ($8 billion more than projected in 2017). Based on current policy settings, the scheme is projected to continue growing to be $92 billion in 2032-33, significantly exceeding the 2017 estimates made by the Productivity Commission. 19

We also know that there remains unmet and unrevealed demand in some areas that could lead to further growth in costs in the near-to-medium-term. For example, we know First Nations and culturally and linguistically diverse people are underrepresented in the scheme. People with disability in regional and remote Australia are also underrepresented in the scheme. There is a large group of people with disability with high support needs that are being cared for by elderly parents. They will need greater support from the NDIS in the future.

There is no single issue driving the growing cost pressure of the NDIS.

The lack of foundational supports and lack of accessible and inclusive mainstream services available to people with disability pushes people towards the NDIS. Other service systems also push people towards the NDIS because it is uncapped, and what is considered reasonable and necessary isn’t well defined.

The lack of trust between participants and the NDIA, driven by the adversarial planning process, and at times a ‘use it or lose it’ approach by the NDIA, has encouraged people to fight for as much support as possible. It is a rational response to fear that support will be taken away at the next planning meeting. People also do not trust the NDIA to respond in a timely or adequate way if circumstances change.

Service providers have responded to market settings that reward the volume of supports provided rather than quality of supports or outcomes for participants. Prices that do not always reflect the full cost of complexity also drive provider behaviour. Because there is not enough visibility of transactions, fraud is difficult to identify.

As we have said, there is no single factor driving increased costs. And as a result, there is not one simple solution. Both poor design and implementation issues are driving the behaviour of everyone in the system. These flaws have to be addressed. Everyone has a role to play to ensure the scheme is sustainable. Reform must start now.

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Understanding and responding to intersectional needs

In our What we have heard report, we emphasised that recognising the complexity of identity and need is essential to building a responsive, safe and inclusive society for people with disability.

First Nations people with disability, women with disability, people from culturally and linguistically diverse and LGBTIQA+SB communities experience intersecting layers of individual and structural discrimination impacting all aspects of their lives. This discrimination means some people are less likely to seek help.

Our disability support system is underpinned by western concepts of disability and care. This means our policies, programs, institutions and services often respond poorly to culturally and racially diverse concepts of disability and care. This further compounds experiences of inequality and discrimination, especially for First Nations people who face ongoing impacts of colonisation and a history of dispossession, not only of culture and Country, but of their bodies.

This supports a cycle of discrimination and disadvantage that affects the accessibility, quality and safety of supports received. This lack of safety can incite fear, trigger trauma, re-traumatise people and lead them not to seek available supports.20 We must do more to break these cycles of discrimination and disadvantage.

People with disability do not fit neatly into the three support tiers envisaged by the Productivity Commission in 2011. All mainstream services, institutions and systems must become accessible and responsive to the needs of all people with disability. We need to work in new ways which focus better on the intersectional needs of the people that these systems serve.

In response, we have taken a deliberately intersectional approach across the development of each recommendation and action. Rather than addressing these issues in siloed ways, we have woven them into a vision for the future of disability supports, which sees each individual with a disability as a whole person with interconnected needs, challenges and strengths that are recognised and valued throughout Australian society.

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A question of balance

In summary, what we have been told and what we have observed is a disability support system which is out of balance. This is in many ways not surprising, given the disruption caused by introducing the NDIS. The fact that it is world-leading has meant that there was no ‘guide book’ before the scheme commenced.

Governments have come to rely on the NDIS as the dominant, and in some cases only, source of supports for people with disability. 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 of mainstream and foundational supports.

We have gone from a rationed system with few options, no choice and almost no control. Now, we have a system where the rhetoric of choice and control is not supported by the experiences of people with disability. For many, poor availability of services, complexity of navigating what is available and difficulty in moving between providers means, in practice, there is little to no choice and control.

Before the NDIS, disability supports were largely generic and did not always cater to people’s individual needs and circumstances. Now, in an attempt to respond to the diversity of people’s needs and circumstances, the scheme has become incredibly complex and confusing.

The quality of supports across NDIS markets are highly variable, and as the Disability Royal Commission concluded, sometimes lead to harm. There is little to no measurement or transparency of the quality of supports, making it difficult for people to make informed decisions. Unintended consequences of the payment model have incentivised activity rather than participant outcomes.

A good life is one enriched by connections to family, friends and community. These connections need to be nurtured by the scheme. This means individualised, market-based delivery needs to be balanced with approaches that build social capital.

The strongest feedback we have received is that people want an end to the complexity and uncertainty. They want a system that is easier to navigate, fairer, and more consistent. They also want more support outside the NDIS.

Our reforms are designed to return balance to the system.

We want a better balance between the NDIS and the rest of the disability ecosystem. We want a better balance between individualisation and complexity. We want a better balance between individualised, market-based delivery and approaches that build social capital. A better balanced system will be a more sustainable system.

Our recommendations, therefore, seek to create a better balanced system by responding to the challenges identified in the What we have heard report.

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