Ministerial Submission for Noting

MS#: 00024

fOI 24/25-2310

The National Disability Insurance Agency (NDIA or the agency) continues to improve the experience of participants in Administrative Appeals Tribunal (AAT) through key initiatives under the Dispute Resolution Improvement Strategy (DRIS). These initiatives have reduced external legal expenditure for FY23/24. More recently the agency is experiencing an increase in new AAT applications with work underway to understand the drivers of this increase and extent this is linked to scheme reform.

the NDIA is working closely with DSS and the AGD led Administrative Review Taskforce to progress critical transition activities to align with the new Administrative Appeal’s tribunal (ART) settings on 14 October 2024, The amendments to the new trial processes are anticipated to have positive impacts for participants of the Scheme.

the NDIA progressing six Federal Court appeal regarding the tribunals interpretation of current national disability insurance scheme legislation.

Recommendation(s): Decision: That you:

Note the information outlined in this brief about the AAT, ART and the federal court appeals. Noted Please discuss

Media Considerations: The agencys’s AAT caseload and approach has previously been the subject of adverse media attention following considerable effort since 2022 reduce previous backlog & improve participant experiences there little media attention at present. Agency is progressing activity prevent another backlash should will get any media activity. Talking points have prepared shouuld be reviewed bout process made in the aat program (att Attachment).

signature w M Wrtto Bill Shorten date 15/1/2024

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ndis OFFICIAL | Sensitive | Legal Privilege

MS24-00024

the NDIA is proactively responding to the current increase and mitigate the potential associated increase in external legal spend. The NDIA has commenced immediate activities to address case resolution rates including increasing focus on AAT matters that can be resolved quickly through Early Assessment teams, and cross-Agency reviews existing caseloads.

The NDIA is continually reviewing matters that remain active in the AAT for over 12 months. As at 31 August 2024, the NDIA has 590 active AAT applications that are greater than 12 months old, which is 17% of all active applications. This is a reduction from a peak of 722 in April 2023.

Administrative Review Tribunal Reform

e The NDIA supports improvements the current AAT process and the new Administrative Review Tribunal (ART) with new ART processes anticipated to have positive impacts for participants of the Scheme. Among the amendments, the Administrative Reviews Tribunal Act 2024 expressly requires that the ART pursues the objective of providing administrative review that is accessible and responsive to the diverse needs of parties.

The NDIA is working closely with DSS and the AGD-led Administrative Review Taskforce to progress critical transition actions to align with the new ART settings for a commencement date of 14 October 2024. The NDIA will focus on accessibility take a co-design approach to policy development to ensure the disability community perspectives are represented.

Federal Court Matters

The NDIA has initiated three of the active Federal Court appeals. These include:

a. an appeal (NDIA v Sutherland), challenging the Tribunal’s view that the NDIS Operational Guidelines: Applying to the NDS (Access Guidelines,) 1 February 2021 are inconsistent with the National Disability Insurance Scheme Act 2013 (NDIS Act). This is relevant to whether prospective participant is likely to require support under the scheme from birth lifetime or whether those supports need are more appropriately met by other systems; grant access to Ms Caitlin Jones understands territories. b. an appeal at the AAT’s decision such as provide planned states and early intervention psychosocial recovery services that are the responsibility for the health system rather than areas of care functions in the NDIS, which would be considered out of scope; c. a further hearing concerning matters arising from the Barlow case where there were allegations against NSW FACS relating to children in its care who have disabilities. It seeks clarification about how decisions should be made when considering requests for review involving vulnerable people seeking assistance through the ART. d. seeking permission to file a special leave application regarding the matter of Re Garrett; [redacted] e. appealing orders issued on 7 May 2024 in relation to ongoing litigation proceedings between NDIA & another [

federal court cases - summary

The Federal Court appeals currently being progressed include:

a. National Disability Insurance Agency v Sutherland – challenging an earlier Tribunal determination related to applying Operational Guidelines b. Appeal re: Barlow Case- clarifying responsibilities around state/territory agencies’ roles with respect to families experiencing vulnerabilities c. Re Garrett– Seeking clarity over specific legal principles applicable during administrative reviews

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MS24-000024 Attachment A: Talking Points on the AAT Program

The Government is committed to improving dispute resolution processes in the National Disability Insurance Scheme (NDIS) and has reduced the backlog of legacy cases before the Administrative Appeals Tribunal (AAT) by 98 per cent since 1 June 2022.
This has been achieved through efforts by the NDIA to improve internal review decisions with a focus on early resolution of complaints and supported by the Independent Expert Review (IER) trial.
These initiatives have (at 31 August 2024):
- Resolved 10,895 cases since 1 June 2022
- Resolved 98% of the legacy AAT matters (active June 2022)
- Resolved 97% of AAT matters without proceeding to a substantive hearing
- Reduced the active caseload from 4,501 cases at 27 May 2022 to 3,420
- Decreased disputation rate, from a peak of 1.52% of participants in FY2022 Q2 to a 3 year low of 0.42% in FY2024 Q3. This figure has since increased in FY2024 Q4 to 0.71%.
Since June 2024, there has been an increase in new AAT cases. The increase is primarily for planning-related matters, with access matters remaining steady across this period. There are a number of factors that may be contributing to this, including a significant increase in the number of internal reviews within the NDIA. Public discourse on significant legislative reform underway may also be impacting participant behaviour and contributing increased appeals in the AAT.
The Government is addressing this as a priority. The NDIA is committed to working with NDIS participants through a participant centred approach to alternate dispute resolution to AAT matters so that participants have earlier outcomes to reduce the need for matters to be considered by the AAT.
The Government will continue looking for ways to improve NDIS dispute resolution processes and provide a better experience for participants.
We have implemented a range of alternative dispute resolution initiatives to continue reducing the AAT caseload, improve transparency and find alternative, less costly ways to resolve disputes without the need to engage external legal services.
This includes through:
- Building internal capability to reduce reliance on external legal representation. This ensures participants have direct engagement with a case manager and internal lawyer, with a focus on recruiting staff with disability to work in our AAT program.
- An intensive review of matters over 12 months old. As at 31 August 2024, the NDIA has 599 active AAT applications that are greater than 12 months old, which is 17% of all active applications. This is a reduction from a peak of 722 in April 2023.
- Increasing consistency and transparency in decision making through continuous improvement based on model litigant obligations and in-house litigation oversight and governance.
- Transition to a new, select panel for external legal service providers, under a new contract that ensures external legal services are disability focused and aligned with the Agency’s human-centred dispute resolution approach. This has reduced the number of law firms from 11 firms to 4 ongoing legal service providers.
- Implemented the Agency’s Legal Service Provider Framework and new Standing Instructions that provide a comprehensive approach to legal service provider management.

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The National Disability Insurance Agency.

Administrative Review Tribunal Reform

The Government worked closely with the Attorney-General’s Department to ensure the new Administrative Reviews Tribunal (ART) it is fit for purpose for people with disability.
The NDIA re-affirmed its support and improvements already made to the current AAT process and how it will support the new Administrative Review Tribunal (ART) into the Senate Standing Committee on Legal and Constitutional Affairs inquiry into Administrative Review Tribunal Bill 2023 and related bills.

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As at 31 August 2025, there are 14 active Federal Court appeals and 14 active Guidance and Appeals Panel (GAP) matters. The Federal Court has recently delivered two NDIA-initiated appeal decisions under pre-reform law.

Agency.Key Issues:

Drivers of the increase in internal reviews and reviews through the ART include broader decision-making activity (access, first plans, reassessments), which is attributable to the recruitment of an additional 1,300 frontline staff over the past 12 months, leading to a significant increase in the volume of decisions made across the NDIA. This increased volume of decisions is resulting in a proportionate increase in participants and prospective participants seeking reviews.
The NDIA has seen a 169% increase in access decisions and a 238% increase in first plan approvals compared to the previous year. This has led to a corresponding increase in requests for administrative review of decisions, which has also resulted in an increase in the NDIA’s legal expenditure for 2024–25.
In October 2024, the Australian Government released the lists of what National Disability Insurance Scheme (NDIS) participants can and cannot spend their funding on (section 10). Over time, this has supported the NDIA to work with participants to narrow the scope of supports under review. To date, the introduced legislation has had minimal impact on the number of planning matters for which a review is sought through the ART.
In addition, upcoming NDIS reforms including the introduction of a New Planning Framework will create new types of decisions that participants can review. The NDIA will closely monitor the timing and scale of these changes and will assess and report on their impacts on reviews in due course.
The Federal Court has delivered two recent NDIA-initiated appeal decisions:

In Warwick, the Full Federal Court found against the NDIA. While not fully endorsing the earlier Federal Court decision, the Full Federal Court largely maintained a narrow interpretation of ‘day-to-day living costs’ under the NDIS (Supports for Participants) Rules 2013 (Support Rules). However, the effect of the Warwick decision is limited, given the decision applied the NDIS Act prior to 3 October 2024 legislative changes. The impact of this decision is limited to some extent, in that the Transitional Rules are now likely to exclude some of these supports, such as stamp duty.
In Jones, the Federal Court found in favour of the NDIA’s appeal, overturning the ART’s decision granting NDIS access. The Federal Court confirmed that decision makers must identify early intervention supports when applying section 25 of the NDIS Act.

The Federal Court decisions are being remitted to the ART to re-determine and remain ongoing.

Background:

In June 2022, the NDIA developed the Dispute Resolution Improvement Strategy 2022–2025 (DRIS) to deliver on the key 2022 Government commitments to strengthen the NDIS review process. Specifically, clearing ART appeals backlog, introducing an expert review body, improving the dispute resolution process, and reviewing the “excessive” use of external lawyers.
The NDIA has successfully delivered on these commitments including establishing an Early Assessment team, completing an Independent Expert Review (IER) trial, and establishing a model litigant framework.

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Official: Sensitive Legal Privilege

The key initiatives implemented under the DRIS have resulted in the resolution of 99.8% of the legacy caseload active in June 2022 and reduced the number of active matters to 2,674 in April 2024.

The NDIA is undertaking a range of initiatives to strengthen dispute resolution, address the increase in ART applications, manage case resolution rates and improve outcomes. Agency. This includes:

expanding the early assessment teams
building internal legal capability to manage more ART cases in-house without requiring external lawyers
consolidating the number of external firms engaged for consistency and cost effectiveness Disability
updating ART standing Instructions to streamline engagement with external legal service providers.

The NDIA has also strengthened engagement with the disability sector to further embed a participant-centred approach to dispute resolution. This ongoing engagement continues drive continuous improvement in decision making to better inform operational and policy improvements.

As a result of the significant increase of matters, immediate activities are underway to address case resolution rates, with a focus on participant-centred resolution initiatives, including:

prioritising new ART matters for quick resolution, as well as prioritising efforts towards final hearing or resolution of matters greater than 12 months old
improving internal efficiencies and escalations with external legal service providers to drive better outcomes for participants
expedited recruitment and alternative short-term surge resourcing to support the increase in applications, including seconding specialist staff from other areas of the NDIA to provide support.

As at 31 August 2025, initiatives aimed at reducing ART Applications have:

Resolved 16,166 cases since 1 June 2022
Achieved a 99.8% reduction in legacy ART matters that were active in June 2022
Resolved 96.2% of ART matters without proceeding to a substantive hearing in 2024–25.

Media considerations:

The NDIA’s ART caseload and approach has previously been the subject of adverse media attention. Following intensified effort since 2022 to reduce the previous backlog and improve participant experience, there has been less media attention. However, with the return of increased volumes, the risk of media attention is increasing. The NDIA has prepared talking points at Attachment B to enable proactive commentary where required.

The recent Federal Court decisions have not attracted any media attention. The NDIA will continue to brief you on any media activity and will work with your Office to prepare a media release and talking points, to respond to issues if they arise.

Sensitivities: Nil

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Financial Impacts:

-- Due to the success of the DRIS in 2023–24, the NDIA’s total legal expenditure decreased by 12% to $71 million from $80.8 million in the previous financial year. This consists of external spend of $59.7 million (84%) and $11.3 million (16%) on internal legal spend. -- However, in 2024–25, the NDIA’s total ART legal expenditure increased by 28% from $53.1 million to $68.1 million from the previous financial year. The significant increase in external legal costs for 2024–25 is attributable to an increased reliance on external legal support to manage the higher volume and complexity of ART matters beyond the NDIA’s internal capacity. -- While the legal expenditure for 2024–25 has increased, the implementation of the DRIS has significantly improved the efficiency and cost-effectiveness of the NDIA’s dispute resolution processes.

External Consultation:

-- The NDIA is engaging with the Department of Health, Disability and Ageing (the Department) regarding the interpretation of the NDIS Act in the broader context of the ART program. The NDIA will consider, in consultation with the Department, any amendments to operational policy guidance to re-align policy following the decisions.

Regulatory Implications: Nil

Attachments:

A: ART Monthly Dashboard – August 2025 B: ART media talking points

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Attachment B – Talking Points

The NDIA is committed to a participant centred approach ensuring fair and timely outcomes for participants.
This includes working with NDIS participants and their representatives through a participant-centred and trauma-informed approach to alternative dispute resolution of Administrative Review Insurance Tribunal (ART) matters.
The NDIA has seen an increase in volumes of administrative decision making over the last 12 months, which has seen an increase in internal and external review applications.

This increase has seen the Administrative Reviews Tribunal (ART) case load grow from 3,415 on 31 August 2024 to 5,738 active matters as at 31 August 2025.

The NDIA is addressing the increase and case resolution rates as a priority and immediate activities to address this are underway, with a focus on participant-centred resolution initiatives, including:

o prioritising Tribunal matters that can be resolved quickly by the Early Assessment teams

o intensive and regular case reviews aimed at progressing and resolving matters where possible to reduce the time that matters are held

o review of internal processes to improve efficiencies and drive better outcomes for participants, including a review of performance data to identify best practice and opportunities for continuous improvement

o commencement of work to identify different Tribunal matter pathways to improve timelines and participant experience including identifying matters that can be heard on the papers

o expedited recruitment, exploring alternative short-term surge resourcing options to support the increase in applications.

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