Linda Reynolds’ new NDIS plan shows a ‘ridiculous’ understanding of the scheme

Minister for the National Disability Insurance Scheme Linda Reynolds is calling for states and territories to increase their contribution to the scheme, arguing the program is coming over cost and was never intended to function as a “welfare scheme for life”.

But experts say there are several issues with Reynolds’ claim. Firstly, the NDIS is not welfare, and has never functioned as such. Secondly, there is limited data to explain the “cost blowout” the Coalition have complained about in recent months. 

Where’s the evidence? 

CEO of Physical Disability Council NSW Serena Ovens told Crikey the states would likely take issue with being told to pay more — especially on the basis of limited evidence. The scheme started out with a 50-50 financial split between the Commonwealth and the state and territory governments combined, though states and territory contributions were later capped at a 4% annual increase.

NSW, Ovens said, shoulders $3.2 billion a year as part of their obligation. Many state-run community disability and mental health services have been defunded to support the NDIS.

“If the NDIS truly is underfunded and everyone needs to put in more to make it work properly, we’d need absolute evidence on where the costs are and where the states are falling down,” she said. 

“But we’re seeing huge numbers [of cost blowout] with no evidence at all.” 

Reynolds and NDIS CEO Martin Hoffman previously pointed to the increase in average payments to NDIS participants rising from $39,600 to $52,300 between 2018 and 2020.

But this is in line with 2012 Australian Government Actuary estimates. The modelling estimated the NDIS would provide care to 441,000 people at a cost of $22 billion a year or $50,000 a person. There are 10,000 fewer people on the scheme than anticipated.

Ovens said it’s rare for someone to use 100% of their plan package value, reducing costs. 

Reynolds also pointed to a drop in participants classified as “high functioning” and an increase in “low functioning” participants who need more support as proof the NDIS was failing. But data shows the number of participants categorised as low functioning remained steady at the time. 

“Welfare system for life” 

In order to be eligible for the NDIS, people have to prove they have a permanent disability. In short, the NDIS is largely supposed to be a lifelong support scheme. 

Fewer people are exiting the NDIS as planned, a 2017 review by the Productivity Commission found — but this is because fewer are dying or entering residential aged care — which overall is a win, not a loss. 

“[Reynolds] calling it a welfare scheme shows she misunderstands it,” Ovens said. “It’s an insurance scheme to allow people to have control and independence over their lives and be fully engaged and included in communities.” 

Emeritus Professor at Sydney University’s Centre for Disability Studies Trevor Parmenter told Crikey the idea that some people would improve under the scheme was based on a very limited cohort. 

“It was the idea that if a support scheme was introduced, support would enable people to not be influenced by the environmental causes of disability,” he said. This could include rehabilitation for physical injuries or support for some psychosocial disabilities. 

“But it doesn’t work for blind people, people with Fragile X syndrome or many other disabilities,” he said, adding it wasn’t applicable to the NDIS. “The idea some people would cost less is ridiculous.”

People with disabilities are also living longer due to advances in health science and may experience physical or mental fragility earlier than the rest of the population, increasing support costs. 

“This is where [Reynolds] doesn’t seem to understand the scheme and makes it out as failing,” he said.

“We don’t have anyone giving advice [to the government] who understands what disability means and how we can support them optimally and economically.”