Unpacking the NDIS Review

The National Disability Insurance Scheme Review has published its final report. The report contains 26 recommendations and 139 actions, many of which relate to creating a unified system of support for people with disability. But does the review go far enough? Is it going to deliver better outcomes for people with disability that rely on the NDIS, while creating a plan to manage spiralling costs?

Listen to host Kat Clay, in conversation with Sam Bennett, Disability Program Director, and Hannah Orban, Associate, about what the NDIS review means for disability services in Australia.

Read the NDIS review

Transcript

Kat Clay: The National Disability Insurance Scheme Review has published its final report. The report contains 26 recommendations and 139 actions, many of which relate to creating a unified system of support for people with disability. But does the review go far enough? Is it going to deliver better outcomes for people with disability that rely on the NDIS?

With the scheme projected to cost over $41 billion this financial year, we’re wondering if the review offers solutions to addressing spiraling costs. And that’s the question we’re going to be tackling on today’s Grattan podcast. I’m Kat Clay, and today I’m chatting to Sam Bennett, our Disability Program Director, and Hannah Orban, Associate, about what the NDIS review means for disability services in Australia. So Sam, the review did have some specific goals that it set out to achieve. But what I’m really interested in is whether the review has achieved what it was meant to do.

Sam Bennett: Hot on the heels of the Disability Royal Commission. Last week, the review landed, and I think a fair way to judge whether it’s shaped up against its objectives is to look back at what those, what those were. First was to restore, restore trust. Second was to understand how to put participants at the center, which is really shorthand for improving outcomes from the scheme, and participants experience of it.

And then the third was to make the scheme, sustainable, which is to say that people have confidence that the right people are getting what they need, that the outcomes are commensurate with the level of investment, and that the contributors, the funders here, think that the costs are affordable and under control.

And I think with the first of those, restoring trust, it’s worth saying the review put an awful lot of effort into that. The time it took to listen to people, to engage with peak bodies, to speak to, providers across the sector, that, that kind of thing. And one would have to say that the positive reception.

And by and large of the final report, with a few notable exceptions, it must be said, is a good indication that there is goodwill around what the report says, and also the way that it was, was done.

On the second point, putting participants at the centre, well, look, I think the proof will be in the pudding with that. But again, there’s some really encouraging proposals and some justifiable positivity in the mood music coming out of the National Cabinet meeting regarding states and territories being back around the table to provide what they’re calling foundational supports outside the scheme.

These are things that are going to be very good for people with with disability. There’s good stuff in there about early intervention. There’s great stuff about, better supporting people with psychosocial disability in the scheme. And some important changes to the participant pathway, which we’ll touch on. On whether this report makes the scheme sustainable. Look, I have some reservations about that that we’ll talk about.

Kat Clay: So the report is meant to outline a plan and with these recommendations on, on how to proceed with the NDIS, has it outlined a detailed enough plan here or does it need more work?

Sam Bennett: This is where I have concerns, because I would say this review report is rather stronger on problem definition than it is on readily implementable answers.

It’s actually pretty light on technical detail.

The NDIS review is not wrong, but it hasn’t substantially moved the conversation along on something that was clear to policymakers at least four years ago, and in reality, probably a lot longer than that. To have done so, it would have needed to provide answers rather than just outlining the problem. So why is that a problem?

Well, look, it’s worth noting the experience of the scheme in the intervening years between that 2019 Tune Review and last week’s review. The number of participants with an active plan in that period grew by over 290, 000 people from just under 334, 000 in December 2019 to over 631, 000 at the end of Q1 quarter one of this financial year. That includes more than 100, 000 kids with active plans, though changes in the reporting from zero to seven to zero to nine make that comparison harder to draw. But we do know now we’ve got 12 percent of all young boys in Australia aged five to seven on the scheme.

The cost of the scheme grew within that period from 16. 1 billion in the full 19 20 financial year to what’s projected as being $41.2 billion at the end of the current financial year. So that’s growth in costs over that period of 24 billion. There is much about that that we should be celebrating. Many tens of thousands of participants and families getting support for the first time, many achieving life changing outcomes with that and that is a fabulous thing. I am simply pointing out that for that entire period of exponential growth, That has occurred through the application of key criteria for eligibility for the scheme that we know have been flawed. The NDIS review doesn’t provide the detail of what should be done here, so we still remain some considerable distance from a solution.

Kat Clay: You know, National Cabinet has a target to moderate the scheme growth to 8 percent by 2026. I think I probably know the answer to this, but does this plan help in any way with moderating this growth?

Sam Bennett: Well, much for the same reason as I was just explaining before, the ability of the review recommendations to deliver those outcomes and to moderate growth to the national cabinet target of 8 percent by 2026, really has to be taken as a matter of faith at this stage because there is little detail and no supporting modeling provided which bears it out.

The co chairs of the review and the minister have stated their confidence that it will have the desired impact. But the detail isn’t there in terms of how different measures will impact on costs, when that impact will be realized, or what the net impact is of a lot of changes that would appear on surface level to actually be cost additive.

We just don’t know. And perhaps that’s okay. It will unquestionably be a good thing for there to be foundational supports outside the scheme that deliver better outcomes. than individualized funding within it would have done. But at present, that’s a commitment to an unknown constant of money to deliver a level of general and targeted supports that’s not defined.

I don’t want to pour too much cold water on the general direction of reforms outline cause I think that direction is encouraging in, in many ways. I just think it’s worth being clear. This is not yet a convincing blueprint for a sustainable NDIS and that the work to turn it into one while improving the scheme and maintaining the trust that’s been built is actually going to be a lot more difficult than the work that the review has just done because so much of the heavy lifting is still to come.

Kat Clay: Hannah, one of the things that’s come up in the review is this mention of foundational supports, including for kids with developmental delay and autism. For me personally, I hadn’t heard of this before, and I was wondering if you could explain what these are, and, how these would actually work.

Hannah Orban: Yeah, that’s a great question, Kat. And the fact that you’ve never heard of foundational supports before and you don’t know what they are, let me assure you that you’re not alone. It’s actually a new term that the NDIS review has so you probably haven’t heard of it before. Essentially foundational supports are services for people, with disability and they’re called foundational because they’re the sort of basic services that you need to live a good life.

So the NDIS review you know, it doesn’t tell us a lot about what foundational supports will be, but what it does tell us is that, it will include services like information and advice. It will connect you into disability services. It’ll include advocacy and things like disability employment services to help you get a job.

So they’re very different to NDIS. services, which are highly specialized and very individualized. They’re more general and community level supports that all people with disability need to access. In addition to that, the review has actually introduced two streams of foundational support.

So there’s general foundational supports, which will be available for the two and a half million people with disability under the age of 65 in Australia. And then there are targeted foundational supports, and there’s really not very much in the review that tells us what foundation targeted foundational supports will be and who will get them.

But at a very high level, they’ll include things like home and community care for people who need a little bit of domestic help, but not 24/7 support like some NDIS participants. It will include early childhood support for children with developmental delays, potentially some children with autism.

And that’ll likely come through early childhood centers and schools. And it will also include things like psychosocial support and aids and equipment to help people live independently at home. It really makes sense to take these services out of the scheme, these services, and a lot of the cohorts that have been using them have been a big source of cost drivers in the NDIS and that makes sense. People need these services. But over the last 10 years, these services have dried up as all government funding and effort has been directed towards the NDIS and so it’s really time to develop this sector again, to open it up to the millions of people with disability who need them and to take some of the pressure off the NDIS .

Kat Clay: With the foundational supports, is that part of passing disability support services onto the States as well?

Sam Bennett: This is really the part of the report, and possibly the most important part of the report that deals with this issue that the co-chairs have talked about, for a long time of the NDIS as, the oasis in the desert. And the language might be new in terms of foundational supports, but, but the concept will probably be familiar to those, at least, that, were around in 2011 when the Productivity Commission put out its original, report that outlines the intended design. It was always supposed to be the case that there would be different tiers within the scheme, and that there would be some support that was out there, available to all people with disability, and then a more intensive level of support through individualized funding, for those that met the eligibility criteria.

That was the intended design, but it never really got implemented. Everything became focused on. The scheme, and the individualized funding, that would be provided to those that were eligible for it. There has been an erosion in disability services available about outside the NDIS.

States and territories argument would be, well we gave the funding, into this, combined pot with the Commonwealth to cover this. But the counterargument would be there was always supposed to be supports outside. To one side of the NDIS, we’ve had Australia’s disability strategy now in its second decade long iteration, which commits states and territories to a range, of actions to make mainstream services more inclusive and to improve outcomes in a in a range of important areas So yes, I think foundational supports provides the the vehicle. For the full scheme that was originally envisaged to now be now be realized.

Kat Clay: Sam, I mean, one of the big questions coming out of the report is whether this means changes to the definition of reasonable and necessary in the NDIS. Can you explain a little bit about how this works and how it’s worked and how this is going to change?

Sam Bennett: There are a number of really important concepts that underpin the way that the NDIS works, relating to the key decisions, that happen within the participant pathway. Some of those relate to eligibility for the scheme, so how participants enter it.

And then the other reasonable and necessary concept relates to how the supports in a participant’s plan, once they enter the scheme, are determined and and agreed. The way that works is, at the moment, is that there is a test applied through a number of criteria defined in the legislation, which are applied to each support that might be funded, or that a participant or their family has requested that these are set out in Section 34 of the NDIS Act, and they include things like whether that support relates to the person’s disability, whether it’s likely to be beneficial, whether it represents value for money in comparison to any alternatives there may be, or whether that support is more appropriately funded outside of the NDIS by another service system. Now, the issue with that is that those are highly subjective criteria. They’re pretty complex to apply, and the legislation beyond that high level doesn’t help very much in providing further guidance on how the criteria should be considered. They’ve been highly inconsistent in their application so that people with similar levels of need get very different support, really depending on who they end up speaking to on any given day and how well they can advocate for their position. The Administrative Appeals Tribunal have concluded that reasonable people can disagree on what is reasonable and necessary. And that, that sort of exemplifies the problem that we’ve got. And those issues have got worse as the scheme has got bigger because the time available for those sorts of decisions, many of which are complex, has decreased because the number of staff within the agency to make those decisions has nowhere near kept pace with participant growth. Above and beyond the challenges implementing those criteria in a way that’s remotely consistent, this is a huge design flaw in the scheme overall.

And it’s the reason for almost all the complaints and legal challenges, and it’s at the root of the sustainability issue the scheme faces. because it’s proved to be a woefully ineffective cost control mechanism, as well as a a torturous and highly stressful, way of setting a budget that participants really hate.

Kat Clay: Sam, I mean, It’s sounding like maybe a Medicare style MBS kind of listing would be a better system here in the NDIS, which would at least provide some kind of level of consistency of assessment.

Sam Bennett: That was one option open to the review. It could have responded to the issues I’ve just described by codifying every single item that might ever be deemed reasonable, and necessary. But thankfully it hasn’t done that. It hasn’t tried to actually define reasonable and necessary in those terms. I think that would have been a thankless task.

What they have said, which I think is absolutely the right thing, is that reasonable and necessary should apply not to each individual support, but to the level of funding that is derived from a process of standardized assessment and that once that funding level that reasonable and necessary level of funding has been determined, participants should then have greater flexibility, actually, than they do now over how that funding is then then utilized.

Effectively, that separates the processes of calculating funding from the task of planning, which is a great thing because it will free participants up to do real person centered planning for the first time under the NDIS, and with parallel recommendations in the review that they should have more support for that process.

There’s reasons for optimism about a much improved participant experience, which is, which is really critical. And once operational, this should also assist in making funding levels more consistent, costs more predictable, and that can only be a good thing. So that’s the good news, but yes, as with the other recommendations, the lion’s share of the work here still needs to be done on what I believe is the single most important change required to put the scheme on a sustainable path.

Kat Clay: Hannah, I want to ask you too, because there have been some controversial recommendations in the report and specifically relating to housing and supports for people with higher levels of need. What is being proposed and why are people worried?

Hannah Orban: Home and living supports in the NDIS, are an incredibly expensive kind of support. They’re really important because we’re talking about providing people with accessible housing that they can live in with their disabilities. And we’re also talking about In home support. So support workers coming into your home and helping you with whatever you need to live independently.

So this is a really core form of support for the NDIS, which is a scheme that’s about creating choice and control and independence for people with disability. The trouble is that it costs an incredibly large amount of money. Supported independent living, which is at home support for about 30, 000 people with disability in this scheme, last year cost around 9 billion.

 In addition to that, specialist disability accommodation, which is the actual housing stock. So building apartments, and, and housing for people cost 230 million in payments. So this is a, a huge source of cost for the NDIS budget.

So one of the big changes is for funding. So the NDIS review is proposing that everyone will get as a default level of funding, what they call one to three. So that’s when you are sharing your support worker with two other people with disability. So you’re splitting the costs of the support worker. So say you have someone come in overnight to provide passive support while you’re asleep in case you need help.

And then you have two support workers come in during the day, eight hour shifts at a time to help you with whatever you’re doing during the day. If you live in a house with two other people with disability, You get one support worker coming in and you can split the costs together. So there’s an economy of scale there.

 The trouble with this model is that it basically, creates group homes. And group homes is when people with disability are living with other people with disability. They usually have the same person providing their housing and their support workers. So if they don’t like their support worker and they want to leave, they also have to leave their home, which is really hard for people.

And they often don’t get to choose who their support workers are or who they live with. So it’s a model of housing that really takes away people’s choice and control, and it can also really, hamper their independence. We’re not really clear at this point on how the NDIS Review’s proposal to have default funding at 1 to 3 is going to move away from the group home model.

It really seems like a kind of funding that will perpetuate that. The one positive side from this is that the Review has said people should get this money. As sort of flexible funding, so we’ll give you the equivalent cash for a one to three support, but you can decide which kind of housing you want to spend that in.

So, if you want to maybe live with some friends from school, maybe people who don’t have disability. And maybe you subsidize their rent and in return, they cook you dinner and they clean the flat as a kind of in kind support. That’s one way to spend that money. So we’re hoping that with some market stewardship and with some really good policy design, we can create some models of housing that are better for people and different to group homes but this funding model is a little bit alarming.

Sam Bennett: So, another aspect that’s proved quite contentious, in the recommendations that is relevant in home and living, but actually has broader implications across the whole scheme is around the requirement for some level of mandatory registration. It’s been a principle of the NDIS that participants can choose to self manage their plan, or to use a plan manager, or to have the agency manage a plan on their behalf.

If you’re self managed at the moment, You’re able to choose unregistered providers, rather than be limited to, to registered providers. The same applies if you’re, if you’re, if you’re plan managed. You’re able to negotiate rates directly. You can employ staff directly without them needing to be registered by, the NDIS Quality and Safeguards Commission.

The recommendation here is that there be different levels of registration applied. Depending upon the level of real or perceived risk right through from mandatory registration, which I think is absolutely what there should be for providers that are providing supported independent living, supports, right through to just an enrollment process, for people that might be providing support in.

With, with gardening or some supports in the home, on one level, you can see that there’s some, justification here, the visibility this provides to the system of, who is providing support, and the accountability, that is implied in that. Is why the review has made this change.

The counterargument, however, is that it really does start to threaten one of the fundamental design principles of the scheme, which was to enable participants to have choice and control over how they, design their supports and who they engage. To do that. That’s not something to be taken lightly. I would say it looks a little bit like the review is using a sledgehammer to crack a nut on this one.

Kat Clay: Yes, Sam, it’s obviously a fine line to walk between giving people self autonomy and also cracking down on unscrupulous providers, which we’ve certainly heard about in the news in the past year.

I know there’s a lot that we could go into with the NDIS review and also a lot of work to be done. And Grattan will certainly be doing research on that in the future, but where do we go now? I mean, where does the government go?

Sam Bennett: There are a number of things in the review that talk to a five year transition. So the review recommends that, an implementation roadmap is developed. It doesn’t provide one. It says that one is, is needed. So the first task is to get on with developing that. As I said earlier, government already considering across departments, the, recommendations from the Disability Royal Commission.

They’re due to do that by March of next year. They’ll need to be work done to ensure that all of the recommendations government is grappling with are dealt with in a way that is coherent. So bringing these things together. Under some implementation governance that spans both, is something I think that is, is going to be important, and indeed, aspects of what that governance should look like in terms of the ongoing involvement of, people with disability themselves and their organizations are proposed in the review.

Another thing the review says and that the minister’s talked about in his speeches subsequently, and I believe it was also referenced in the outcome from national cabinet just before the report was released is the intention to legislate, changes to enable implementation of these recommendations in the first half of, the next calendar year.

That’s a very, very tight roadmap, but it’s a necessary one if the changes are going to be brought in, in advance of electoral cycles,. And then specifically in the case of foundational supports that we’ve talked about the expectation there is that the Commonwealth, together with the states and territories, will have agreed on a foundational support strategy, again, within the first half of, the next financial year.

So it’s going to be an incredibly busy period in starting to flesh out, the implementation of both of these major reforms that will have implications for the way people with disability are supported in Australia from many, many years to come.

Kat Clay: Thank you so much, Sam and Hannah, for discussing the NDIS review on this podcast. If you’d like to look at the review yourself, please do so.

It’s in the show notes below. And we look forward to discussing more about disability program on the podcast. in 2024. If you’d like to support our work, we do rely on donations from our lovely listeners like you. Please go to grattan.edu.au/donate. We’ve turned 15 this year, so please do consider giving us a birthday present. As always, please do take care and thanks so much for listening.