1. Background
The National Disability Insurance Scheme Amendment (Getting the NDIS Back on Track No. 1) Bill 2024 (Bill) was introduced into Federal Parliament on 27 March 2024 and marks the first of the foreshadowed changes to the NDIS laws following the NDIS Royal Commission Final Report. The Bill proposes several changes to (amongst other matters) participant funding which could have big impacts on NDIS provider cash flows and debt risk management.
2. Current system
NDIS funding currently operates at an individual support item level. Participants who exhaust funding for a support item often cannot reallocate unused funds to pay for that support. They can seek a review, which is a time consuming process with no guaranteed outcomes. Providers in the meantime are in a difficult situation, faced with the choice of cutting off services or continuing to support the participant in circumstances where they may never recover payment for what is provided.
3. New system
A key recommendation from the NDIS Royal Commission was to set participant budgets at a 'whole of person' level, and the Bill introduces these new concepts:
a. Flexible Funding. Participants are allocated an amount of flexible funding and have more choice about how it is spent, so they can spend more on services that get the most benefit from. The CEO can place restrictions on this spending, for example where the participant has a history of over-spending.
b. Stated Supports. Distinct from flexible funding, stated supports cater to specific high-cost needs such as assistive technology, home modifications or supported independent living. New NDIS Rules will prescribe which supports will fall under this category.
c. Roll-overs of unspent funding between years. Participants have the opportunity to use extra supports in later years as needed. This gives providers the opportunity to deliver that extra support.
These provisions are intended to give participants more choice and make it easier for them to understand and keep track of their funding. They may also present new opportunities for providers – including opportunities to:
a. Provide more supports to clients who need them and see value in them.
b. Reduce the risk of not being paid for providing necessary supports after funding has been exhausted, although it is still unclear exactly how much the changes would reduce this risk. Much depends on how new funding arrangements work in practice, and whether the flexibility would overcome the common contributor to these risks arising (e.g. delays in the plan review process, and a concern that stopping supports will cause harm).
4. What should NDIS providers do now
It is not yet clear whether the Bill will become law, at all or in its current form. At this stage, prudent providers should monitor the progress of the Bill and consider how the Bill (if made law) could impact the marketing, sales, operations and financial aspects of their business. If the Bill is enacted as law, changes may need to be made quickly across several areas of the business.
5. Need Help?
We are NDIS law experts and can give you tailored strategic advice throughout the law reforms that follow the Royal Commission. To find out more about how we can help, reach out to us at 02 9199 4563 or via email at info@kinnylegal.com. In the meantime, subscribe to Kinny Legal updates for regular insights into how NDIS changes will impact providers.