The NDIS was within budget for the first three years of trial and also for the first year of transition (2016-17). The Productivity Commission estimate of $22 billion a year at full Scheme (2019-20) remains the best estimate of the longer-term cost of a well-managed NDIS.
Monitoring of financial sustainability has indicated the following:
- Higher than expected numbers of children are entering the Scheme (0-18 year olds).
- Plan budgets are increasing over and above the impacts of inflation and ageing.
- Higher than expected numbers of individuals are continuing to approach the Scheme in sites that commenced during the trial period.
- Lower than expected numbers of children are exiting the Scheme and being supported in mainstream and community settings.
- A mismatch exists to some extent between benchmark package costs (typical support packages) and actual plan budgets.
- Boundaries between the NDIS and other mainstream supports are not always well-defined (for example in the areas of health and mental health).
Differences from expectations are not unexpected in the early stages of the Scheme, and the insurance approach has allowed these differences to be identified early.
Importantly the Participant and Provider Pathway Review that is currently being undertaken recognises financial sustainability as a critical factor in the success of the Scheme, and improved pathways are being designed considering insurance principles. Some specific initiatives already underway to manage financial sustainability are outlined below.
Managing early intervention
The Agency implemented the Early Childhood Early Intervention ( ) approach in response to higher than expected numbers of children entering the Scheme. While it is still too early to assess the impact of the approach, it is expected that it will provide a meaningful benefit for children with disabilities. The approach aims to both assist with Scheme sustainability by reducing lifetime costs and help build the capacity of the mainstream and community systems.
Refining typical support packages and the planning process
The typical support package and planning process is a method for better aligning a participant’s support need with their funded support when they first enter the Scheme. The Agency will continue to refine this process to ensure that appropriate assessment tools and questions are used during the planning process. This approach assists with financial sustainability as plan budgets will be more in line with benchmark amounts and plan inflation will also be more in line with expectations.
The Agency is implementing a plan review strategy which aims to align better plan budgets to support need and typical support packages for participants already in the Scheme. The strategy also aims to apply a risk-based approach to plan duration. Some plans will require earlier review than others based on the characteristics of participants and the supports in plans. For example, children receiving early intervention support may require earlier review to understand progression against outcomes, compared with some participants whose disability and circumstances are unlikely to change in the near future.
Providing quality assurance
The Agency is implementing additional quality assurance processes so decisions are consistent, equitable and sustainable. The Agency is undertaking file reviews and audits to assist in understanding differences between emerging experience and expectations. This assists in developing management responses to financial sustainability.
Staff and Partner training on core capabilities is ongoing and includes training on insurance principles, Scheme sustainability, reasonable and necessary decision-making, typical support packages, and quality.
As recognised by the Productivity Commission, clarifying boundary issues with mainstream services, including those that exist in the areas of health and mental health, will be essential. The state, territory and Commonwealth governments are responsible for implementing the National Disability Strategy which aims to remove barriers for people with a disability accessing mainstream services. The Agency will encourage the use of mainstream and community supports in the planning process to achieve both better outcomes for participants, and also financial sustainability.