Powers to automate some decisions in the National Disability Insurance Scheme (NDIS), a new civil penalty scheme and a wider test to require participants to exhaust “all other options” before gaining access will form part of the overhauled NDIS.
A so-called “permanence” test already exists in the NDIS to ensure there are no available or known treatments that could alleviate the need for someone to join the major disability support scheme.
Under legislation introduced this morning by NDIS Minister Mark Butler, that test will now also apply to the cohort that was previously granted automatic access, and will clarify that alternative treatments will have to be “exhausted” before the disability is deemed permanent.
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“The NDIS was designed for people with permanent and significant disability. If a person can access treatment that will treat or alleviate the impact of an impairment, the NDIS is not the appropriate service system,” a spokesperson for Mr Butler said.
Mr Butler has committed to reducing NDIS spending, saving $35 billion from the scheme over a decade and removing at least 160,000 participants, while reducing funding amounts from others.
The government says spending must be reined in to “save the NDIS from itself”, before the public loses faith in what could fast become the Commonwealth’s most expensive payment program.
The Greens have already made clear they will not support the reforms, meaning the government will need the Coalition’s agreement to pass the legislation.
The Coalition has offered in-principle support, recognising the need to curb growth. The bill has been referred to the Senate for inquiry with a reporting date of June 16.
First steps for new ‘functional capacity’ test
The bill lays the groundwork to introduce a new “functional capacity” test to replace how people gain access to the NDIS, ending the “access lists” that grant some people automatic eligibility while requiring some others to sometimes pay thousands for multiple reports to prove their impairment.
It also formally defines functional capacity for the first time, as someone’s ability to undertake an activity without support from other people, assistive technology or modifications, in the areas of mobility, communication, social interaction, learning, self-care and self-management.
The work to flesh out that new test will be undertaken by a new advisory group and phased in from January 2028, after agreement with the states and territories.
NDIS eligibility changes explained
Mr Butler said the government would consult on what costs the government would cover and what prospective participants would have to pay.
Additionally, new rules will limit how a person’s needs are funded to clarify that where multiple impairments or comorbidities exist, only the support needs from impairments that qualify for NDIS support will receive funding, and not those that indirectly add to a person’s impairment.
Powers to cut funding
A new power will allow the minister to cut funding amounts across the board for some supports, such as to community participation budgets, meaning funding could be reduced without needing to reassess participants plan-by-plan.
For example, if the minister made a determination to cut community participation budgets by 25 per cent, a participant with a $40,000 community participation budget would have it reduced to $30,000 at their next plan reassessment (or 25 per cent less than whatever the assessor deems that person requires).
The government acknowledges this means “funding for some NDIS supports may be less than the actual cost of providing or acquiring the support, while still being reasonable and necessary”.
However, the minister will only be able to cut funding to a group of supports to ensure the “financial sustainability” of the NDIS and must consider the safety of participants, including whether a funding reduction could place participants “at risk of neglect, crisis or loss of essential functioning”.
With stricter pricing caps to be imposed on unregistered providers compared to registered providers, the government says it will incentivise participants away from unregistered providers.
New penalties, automation powers
The bill also creates new powers to allow the National Disability Insurance Agency (NDIA) to investigate suspected criminal activity — something it has been restricted from doing — and impose fines on providers for low-level rule breaches.
New civil penalties would be created for claiming for services not provided, failing to keep records or provide information, or breaches of privacy.
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And a controversial move to allow the NDIA’s chief executive to automate some decision-making will enable some processes to be sped up, possibly including some administrative decisions as part of the new “functional capacity” tests.
Automated decisions have faced fierce resistance since the so-called Robodebt scandal, in which automated debts were wrongly raised against Centrelink recipients, a scheme ultimately deemed illegal and which led to a royal commission.
But Mr Butler said the government had learned from Robodebt that the human element of important decisions must be retained.
“Being able to automate some of these basic administrative functions frees up our highly qualified public servants frankly to do more work with actual interaction with human beings,” Mr Butler said.
“We’ve all learned the lessons of not over-relying on automated decision-making. We are stepping carefully into this.”
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