Providers and peak bodies have welcomed a planned crackdown on fraud and other criminal activity inside the national disability insurance scheme, warning organized gangs and dodgy services have for too long undermined the system and disadvantaged vulnerable people.
The new Labor government has also been urged to quickly engage with state governments on better-integrating disability support into mainstream education, health, and employment systems, with concerns over neglect of “tier 2” supports for people who can’t access the NDIS.
“The NDIS, when it works, is transformational. But it’s not working well for everyone,” said Mary Sayers, CEO of Children and Young People with Disability Australia (CYDA).
“Disability is way bigger than the NDIS, and disability policy needs to be bigger than the NDIS.”
NDIS minister Bill Shorten said the new Labor government would crack down on fraud and rip-offs inside the scheme. The Herald Sun reported on Sunday that the Australian Crime and Intelligence Commission claimed as much as 5% of the $29bn plan – or $1.45bn – was being stolen each year by fraudsters and organized crime gangs, including falsified bookings, inflated invoices, or invoices charged through stolen information.
Approached for comment, the ACIC’s CEO, Michael Phelan, would not speak directly on fraud in the NDIS but said his organization “has intelligence on serious and organized criminals targeting commonwealth-funded programs.”
“This is classified information and not available to the public,” Phelan said.
“Professional facilitators, including criminally complicit accountants and registered tax agents, are assisting serious and organized crime groups in defrauding government programs and schemes … Serious and organized crime groups will continue to look for vulnerabilities in Commonwealth-funded programs to exploit the system.”
In an interview on ABC’s Insiders program on Sunday, Shorten confirmed he was concerned by the “disturbing” trend and that the incoming Labor government would take action.
“There are very few things more despicable in life than crooks taking money, which is due to go to disabled people,” he said.
Shorten said Labor had “all options on the table to ensure we protect taxpayer money”, claiming the former Coalition government had not done enough to stop fraud or investigate criminals targeting the disability sector.
Laurie Leigh, CEO of National Disability Services, backed moves to address fraud in the system.
“Such criminal activities undermine the important role that genuine providers play in meeting the significant needs of people with disability and divert resources from NDIS participants who rely on the scheme,” she said.
Mary Mallett, CEO of Disability Advocacy Network Australia, said the crackdown was overdue.
“Advocates around the country see some low-level versions of what he’s talking about with fraud. We don’t necessarily see the organized crime, but we’ve heard of it,” she said.
Mallett said her organization more commonly saw people being overcharged for services or not having services delivered at all. She was also concerned that some unscrupulous service providers are not giving greater choices to the people they work with.
“Providers are incentivized to hang on to the people worth the most money. The incentive is problematic now because the providers don’t want people with the highest packages to have a choice and leave them,” Mallett said.
Shorten, on the ABC, decried a lack of “transparency” in NDIS pricing and said the scheme should have “a pricing system which makes sense”.
Mallett said greater transparency in pricing would help address fraud or scams, including providers having a “twin rate” – one price for people without an NDIS package and another higher price for those with government support.
“We’d welcome more work being done on fair pricing. People expect it to be reasonable, but some NDIS participants feel like they’re being ripped off at every turn,” she said.
“[Twin rates] happen, and we often hear about it. Some people prefer to book services without saying they’re NDIS participants. It’s ridiculous they have to do it, to hide that the money is coming from the NDIS, but it’s what people have to do.”
Shorten described the NDIS – set up by the Gillard Labor government in 2013 – as “a bureaucratic nightmare” and “a maze of red tape”, hinting at changes to accreditation and registration requirements for service providers and relaxing rules around assessment of disability claims.
He also warned the scheme “can’t subsidize everyone in Australia”, flagging an expansion of secondary disability services outside the top-tier framework. Shorten said the NDIS was currently “the only lifeboat in the ocean for Australians who live with a disability”, suggesting changes to how schools, hospitals, and health systems cater to people with disabilities.
“It’s aimed for the most profoundly impaired and severely disabled Australians … So the challenge there is to sit down with our brothers and sisters in the states and say, what are you doing in the school system to provide additional support for kids with special needs? The NDIS can’t replace the school system,” Shorten said.
“I’m not saying there should be fewer participants, but I am saying that one of the contributing factors to people doing whatever they can to get into the scheme is it’s a wasteland outside it.”
Sayers welcomed a renewed focus on so-called “tier 2” supports, or interface areas between disability services and mainstream services like schools and employment.
“If you’re not on the NDIS, there’s nothing. Education systems are failing students with a disability,” she said.
“For the last nine years, there’s been very little done in that tier 2, mainly state and territory governments. So Shorten is right in saying the states need to pay serious attention to mainstream systems they run.”
Shorten made huge promises about the NDIS before the election; now, he says it’s the responsibility of the States. This is a remarkable change of tone. Australians expect this Govt to deliver what they promised just a few weeks ago.
— Michael Sukkar (@MichaelSukkarMP) June 11, 2022
Opposition NDIS spokesperson Michael Sukkar tweeted criticism of Shorten’s comments on Sunday.
“Shorten made huge promises about the NDIS before the election; now he says it’s the responsibility of the States. This is a remarkable change of tone,” he claimed.
