Sustainability Committee meeting of 30 July 2025 | FOI document library

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Meeting:	Sustainability Committee, 30 July 2025
Agenda Item:	5. Draft June 2025 Scheme Projections
Paper Type:	For Discussion
SLT Sponsor:	David Gifford, Scheme Actuary
Link to Corporate Plan:	Key Activity 1: Improve participant experience and outcomes with a financially sustainable scheme
Previous Engagement:	Feedback from earlier discussions is reflected in the set of results presented in this paper.
Legislative Authorisation:	NDIS Act 2013 section 180B(2) At least once each quarter, the scheme actuary must make estimates of the future expenditure of the National Disability Insurance Scheme and advise the CEO of the estimates.

1. Purpose

1.1. For the Sustainability Committee to provide comments and feedback on the draft June 2025 Scheme Projections.

2. Recommendation

2.1. The Committee discuss the draft June 2025 Scheme Projections, as the latest view of financial sustainability and the basis to inform the 2024-25 Annual Financial Sustainability Report (AFSR).

3. Key Insights

3.1. Draft June 2025 Scheme Projections forecast Scheme expenses over the 4 year forward estimate period (2025-29) to reduce by $1.5 billion compared with the June 2024 projections over the same period.

3.2. This includes $15.0 billion of estimated savings from the future impacts of Scheme Reforms which are planned or underway (with the impacts already observed in Scheme experience being allowed for in the projection before these savings). It also includes allowances for the estimated impacts of the Sustainability Initiative which the Agency launched in May 2025 to better manage plan inflation, particularly in the short-term while the New Planning Framework (NPF) is being rolled out.

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4. Background

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4.6. These updated projections also allow for Scheme Reforms as well as the Sustainability Initiative which was launched by the Agency in May 2025 to better manage plan inflation through a set of operational measures. The impacts of reform activities that have already been observed are incorporated in the starting position of the projections. Reforms and initiatives which are in the process of being implemented or under development are allowed for in assumption setting. More detail on these assumptions are included in Attachment A, and key risks to the estimated savings are discussed in Attachment B.

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DOCUMENT 2.1

The contents of this document are OFFICAL: - SENSITIVE Agenda Item 5: Attachment A

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In the June 2024 projections, this was allowed for via reductions over time in the additional growth assumption. These reductions were assumed to occur due to management action and the 2023-24 Budget Initiatives (Reform for Outcomes).
For the June 2025 projections the moderation in plan growth is more explicitly allowed for via the estimated impact of the Sustainability Initiative.

More detail is provided on each Reform and the Sustainability Initiative in Section 12. In Section 12 we also provide the assumptions for Additional Growth in Committed Supports and Utilisation Adjustments. These have been determined allowing for the estimated impacts of Reforms and the Sustainability Initiative.

End of Section 3

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Section 12 Reforms and the Sustainability Initiative – Further Details

Section 3 provided on overview of allowances for Reforms and the Sustainability Initiative in the projections. Further details are provided in this section. We also provide the assumptions for Additional Growth in Committed Supports and Utilisation Adjustments.

New Planning Framework

As part of the Scheme reforms announced in the 2024-25 Budget, the Agency is in the process of implementing a New Planning Framework informed by a support needs assessment. Under the New Planning Framework participant budgets will be determined based on a rule set to establish funding based on assessed support needs. The new process will achieve more consistency as the assessment and budgeting process will be delivered the same way across the entire Scheme.

The New Planning Framework was originally targeted to commence in September 2025 with the full rollout across all new and existing participants expected to occur over a period of 3 years. Since the June 2024 projections, a delay in the commencement date has been assumed. For these projections we have assumed a revised commencement month of July 2026, and the rollout now assumed to occur over a period of 4.5 years.

Although significant work has been undertaken over the last twelve months, the Agency is yet to finalise the support needs assessment or budget model rulesets for the New Planning Framework. As such, the estimated impact of this reform has been based on that used for the 2023-24 AFSR adjusted for the current expected commencement date and rollout period.

Funding Periods

The “NDIS Amendment (Getting the NDIS Back on Track) Bill 2024 No.1” introduced in 2024 included changes designed to support participants to spend in accordance with their plan. One key component was the introduction of funding periods which will enable the availability of funding for supports to be distributed over the course of a plan.

From 9 October 2024, the NDIA applied funding periods to all new and reassessed plans, with funding periods set to a default 12-months. From 19 May 2025, process changes allowed for a range of funding periods to be applied for new and reassessed plans of 1-month, 3-months, 6-months or 12-months.

As funding periods will support participants to spend in line with their plan and reduce the risk of funds being exhausted early in the plan, overutilisation of plans is expected to reduce, with an expected $4.3bn decrease in Scheme costs in the four years to 30 June 2029.

The total expected cost of plan overutilisation in the Scheme is estimated to be $2.2-2.4bn per year. The amount of overutilisation that can be reduced through funding periods is based on the total overutilisation, adjusted for:

Roll out - Funding periods are rolled out in line with first plans and plan reassessments. By 30 June 2027, it is expected that around 76% of participants will have funding periods in their plans, with these participants representing around 91% of total Scheme payments.

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Remaining overutilisation - Participants can still overutilise with funding periods in their plans. The amount of overutilisation will depend on the length of the participant’s funding period. As a result, it is assumed that only 60% of overutilised payments are removed from the Scheme under funding periods

Scheme Integrity Measures

The NDIA is pursuing a multi-pronged strategy to strengthen fraud prevention and detection in the NDIS. It co-leads the cross-agency Fraud Fusion Taskforce with Services Australia, established in November 2022 to address fraud and serious non-compliance.

Building on this, the NDIA launched the Crack Down on Fraud (‘CDoF’) program in February 2024, which focuses on developing new IT platforms and systems to enhance the agency’s prevention and detection capabilities.

Estimated savings are determined from four components of the reform:

Savings from providers that are banned or subject to payment reviews Savings are based on projected volumes of providers affected and historical intervention outcomes.
Manual payment reviews by the Payment Integrity Team Savings are estimated by applying historical cancellation rates to projected FTE capacity in the Payment Integrity team.

System enhancements

A proportion of payment requests are assumed to be rejected or deterred by system enhancements – in particular the implementation of invoice matching.

Automated cancellations and system prompts

A subset of transactions were identified as suitable for automated system responses – either automatic cancellation or generation of a system prompt to influence payment requestor behaviour.

Allowances are also made for re-utilisation – i.e. that a proportion of payments avoided or cancelled will subsequently be spent on legitimate supports.

Foundational Supports

There remains a joint government commitment in place for the development and implementation of Foundational Supports, which will result in improved access to supports provided outside the NDIS. This is to better support individuals who are not Scheme participants, including children with early intervention needs who are relatively high functioning and have lower support needs.

The introduction of Foundational Supports was assumed to commence during 2025-26 in the June 2024 projections. However, as the design and scope of Foundational Supports to be provided by States/Territories are still yet to be agreed, commencement is now assumed to be from 2026-27.

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Higher Plan Inflation on Unscheduled Reassessments for Old Framework plans of 18% compared to the 15% adopted from the impact of the Sustainability Initiative.
Higher volumes of Unscheduled Reassessments compared to the assumptions for the impact of the Sustainability Initiative. The scenario is for unscheduled reassessment volumes³⁶ reducing by around 10% from recent levels instead of the reduction of 20% in the projections.
Lower utilisation which may occur if the utilisation adjustment relating to plan changes discussed above does not emerge over time.
Higher utilisation which may occur if the utilisation due to plan changes is greater than anticipated, and/or the reforms relating to utilisation are less effective than anticipated. For this scenario we have assumed a change in utilisation that is double the current allowance for plan changes.

End of section 12

End of report

³⁶ In total for Old and New Framework Plans

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DOCUMENT 2.2

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Item 5: Attachment B

Key assumptions and risks associated with Reforms and Initiatives

1.1. The overall scheme growth rate is assumed to moderate from 10.8% in 2024-25, to 9.4% in 2025-26 and to average of 7.2% over 2026-27 to 2028-29. Key drivers of this moderation are the Reforms and Initiatives underway in the Scheme or which will have an impact on the Scheme.

1.2. New Framework plans (including Budget Models) are assumed to commence in July 2026 and are subject to a 4.5-year transition period. The projected impacts of the New Planning Framework assumes that the rollout occurs in line with these timeframes. It also assumes that Budget Model parameters can be set to deliver an overall impact on Scheme expenditure with a high degree of certainty.

1.3. The New Planning Framework provisions are assumed to take effect from July 2026, with approximately 15% of “full effect” in 2026-27 scaling up to “full effect” by the end of 2029-30 (a 6.5% reduction in Scheme expenditure relative to the projection before allowance for Budget Models).

1.4. The Sustainability Initiative which launched in May 2025 is a significant driver of the moderating scheme growth over the next two years and beyond. The key assumptions include unscheduled reassessment volumes reducing by around 20% compared to recent levels, and plan inflation on unscheduled reassessments for Old Framework plans reducing from 23% to 15%. If these outcomes are not achieved there is a risk that Scheme growth rates, especially in the next two years, are materially higher than those currently projected.

1.5. The introduction of Funding Periods to support participants to spend in line with their plan and reduce the risk of funds being exhausted early in the plan is another material driver of the moderating Scheme growth over the next two years. A key assumption is the distribution of funding periods applied to participant plans across the Scheme (i.e. 1-month, 3-month, 6-month or 12-month). The strength of controls on overutilisation increases as the funding period becomes shorter. If more plans receive longer funding periods than assumed, then estimated savings are expected to reduce.

1.6. The effectiveness of Funding Periods to control overutilisation of plans is also dependent on the volume plan change requests. Participants maintain their right to request a plan change at any time. If more participants than expected are successful in receiving a plan change to increase their plan value, and/or longer funding periods, this may also reduce the potential savings.

1.7. It is assumed that from 1 July 2026, 50% of the highest functioning children aged under 9 who would otherwise enter the Scheme will instead be better supported with Foundational Supports outside the Scheme. This means that a proportion of children with developmental delay and Level 1/Level 2 autism would not enter the Scheme from 1 July 2026, reducing the number of new entrants compared with those projected before proposed reforms. The design of Foundational Supports

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has not yet been agreed by the Commonwealth and States/ Territories and so this assumption reflects a plausible scenario of how Scheme participants may be impacted but may be different from the final design.

1.8. Savings from Scheme Integrity Measures to strengthen fraud prevention and detection in the NDIS have been allowed for in the Scheme projections. These savings are dependent on the effective rollout and implementation of these measures including the implementation of system uplifts. Should the initiatives be delayed, underperform, or fail to deliver the expected outcomes then the projected Scheme expenditure may be higher than currently estimated.

1.9. The projections allow for an increase in utilisation in 2027-28 and 2028-29 as participants may spend a larger proportion of their plans as plan growth moderates. Furthermore, supports can be used more flexibility under the New Framework Planning, which may also lead to increases in utilisation. It is possible that the increase in utilisation may be higher than assumed which would increase Scheme costs.

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