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have been without the ERO. With the ERO fully phased in, future growth in the SCHADS Award is likely to align with national minimum wage determinations.

Figure 11: NDIS DSW Price Limit Compared to SCHADS Award and ERO Growth Since 2013

Index (2013 = 100)

DSW Cap	SCHADS 2.3 (inc ERO)	WPI
	SCHADS 2.3 (exc ERO)

Source: Fair Work Commission, the NDIS & the ABS

Scheme statistics

In the six-months to December 31, 2023, a total of 283,406 participants, which represents 44% of the 646,449 active participants as of December 31, 2023, received DSW-related supports through their plans. This is an increase from the previous period (July to December 2022), with the number of participants rising by 12%. Active providers also saw growth, with a 21% increase from 101,459 to 122,857.

Payments on DSW-related supports during this period reached $13 billion, accounting for 64% of all NDIS payments, which totalled $20.4 billion. This is a 27% increase in DSW-related support payments compared to the same period in the previous year, indicating growing market for DSW-related supports and services. Table 3, Table 4, Table 5 and Figure 12 further illustrate this growth.

Table 3: DSW-Related Supports Scheme Statistics — All Providers

Statistics	July - December 2022	July - December 2023	Percentage Change
Number of NDIS participants	253,558	283,406	+12%
Number of active providers	101,459	122,857	+21%

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Statistics	July - December 2022	July - December 2023	Percentage Change
Amount claimed by active providers of DSW-related supports ($ billion)	$10.3	$13.0	+27%
Average amount claimed by all active providers of DSW-related supports	$101,324	$106,180	+5%

Table 4: DSW-Related Supports Scheme Statistics – Registered Providers

Statistics	July - December 2022	July - December 2023	Percentage Change
Number of active registered providers of DSW-related supports	9,286	8,697	-6%
Amount claimed by registered providers of DSW-related supports ($ billion)	$7.9	$9.4	+19%
Average amount claimed by registered providers of DSW-related supports ($ million)	$0.9	$1.1	+27%

Table 5: DSW-Related Supports Scheme Statistics – Unregistered Providers

Statistics	July - December 2022	July - December 2023	Percentage Change
Number of active unregistered providers of DSW-related supports	92,490	114,777	+24%
Amount claimed by unregistered providers of DSW-related supports ($ billion)	$2.3	$3.6	+54%
Average amount claimed by unregistered providers of DSW-related supports	$25,340	$31,348	+24%

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Source: NDIS internal administrative data

Note: The totals for registered and unregistered DSW-related providers don’t match the overall active provider count due to two factors: 1) Some providers offer both registered and unregistered supports within the same period, 2) A small fraction of providers with unspecified registration status are included in the total count but not detailed in the table.

NDIS Expenditure on DSW-related Supports since January 2021 Relative to Total NDIS Expenditure

Year	Total Payments for DSW-related Supports (b)	Percentage of Total Scheme (%)
January - June 2021	$7.3 b	58.6%
July - December 2021	$8.0 b	60.3%
January - June 2022	$8.9 b	57.5%
July - December 2022	$10.3 b	61.3%
January - June 2023	$11.8 b	64.0%
July - December 2023	$13.0 b	63.8%

Source: NDIS internal administrative data

Over the past three years, providers offering DSW-related supports have shown a diversified approach to generating revenue, often billing for services across multiple registration groups within the NDIS. Specifically, DSW-related supports have accounted for approximately 77% of the total NDIS payments received by registered providers and about 83% for unregistered providers. In 2023, the primary sources of payments for registered providers delivering DSW-related supports concentrated in three areas:

• Daily Activities (56% of payments)
• Social Community and Civic Participation (22% of payments)
• Capacity Building Daily Activity (10% of payments)

Temporary Transformation Payment (TTP)

The TTP for many DSW-related supports was introduced on 1 July 2019 to assist registered NDIS providers with transitioning their businesses into the NDIS. Transitional price levels represented the price necessary to attract new providers to enter the market or to reduce exits from the market. They represented the price

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required to attract economic resources to expand supply. Transitional price levels were above sustainable price levels at the time, and those price limits were adopted where a significant expansion of supply was required.

In line with the NDIS Pricing Strategy, the base price limits for supports delivered by disability support workers have, since 1 July 2019, been set in line with the estimated efficient costs of delivery at the time of updates. The TTP loading has been used to adjust these efficient prices to transitional levels. The level of the loading was initially set at an amount equal to the difference between the estimated efficient cost of delivery and the estimated average cost of delivery. It was always intended that this amount would decrease over time as providers became more efficient.

Given there are more than 150 different lines of supports related to TTP, more information on the specific price limits for the TTP loadings can be found in the Pricing Arrangements and Price Limits published on the NDIS website.

Figure 13 displays the number of providers claiming TTP items has been relatively steady between the half-years starting January to June 2022 and ending July to December 2023. In addition, it shows that additional amount from the TTP loading has been reducing, driven by the 1.5% rate reduction deployed at the beginning of each financial year. The TTP loading is due to be phased out on 1 July 2024.

Figure 13: Expenditure on Temporary Transformation Payment (TTP) supports and provider numbers - claiming TTP items, January 2021 to December 2023

	Number of Providers	TTP Amount
January - June 2021	$67.5m	$92m
July - December 2021	$74m	$70.8m
January - June 2022	$73m	$76.48m
July - December 2022	$57m	$82.02m
January - June 2023	$55m	$78.39m
July - December 2023	$31m	$80.78m

Source: NDIS internal administrative data

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Participants

In the six months to 31 December 2023, a total of 283,406 participants accessed DSW-related supports. The most common DSW-related supports accessed by participants are for:

• Access Community Social and Recreational Activities Standard: utilised by 179,356 participants, with 77,568 providers claiming $2.2 billion in payments
• Assistance with Self-Care Activities Standard: utilised by 123,248 participants, with 73,555 providers claiming $2.7 billion in payments.
• Group Activities Standard: Utilised by 38,617 participants, with 8,773 providers claiming $204.9 million.
• Activity Based Transport: utilised by 141,551 participants, with 30,664 providers claiming $175.7 million in payments.
• Capacity Building and Training: utilised by 54,834 participants, with 24,223 providers claiming $168.8 million in payments.
• Provider Travel: utilised by 123,248 participants, with 37,139 providers claiming $113.6 million in payments.

Further detail is found in Table 6. The average payments per participant between 1 January 2020 and 31 December 2023 have increased from $52,300 in 2020 to $62,700 in 2023, a 6.2% increase per annum. Specifically, average payments are nine times higher for participants in Supported Independent Living (SIL) than those not in SIL ($405,400 versus $43,700 respectively, in the year to 31 December 2023). Average payments are also higher for adults compared with children ($71,400 for participants not in SIL aged 25 to 64 versus $20,100 for those aged 0 to 14 years, in the year to 31 December 2023), by a factor of almost 4 times.

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Table 6: Top 10 largest DSW-related supports, July to December 2023

Support Delivered	Total payments ($ million)	Number of Participants	Number of Providers
Assistance in Supported Independent Living Standard	$3,861	33,198	4,559
Assistance With Self-Care Activities Standard	$2,740	123,248	73,555
Access Community Social and Recreational Activities Standard	$2,239	179,356	77,568
Access Community Social and Rec Activities Standard — TTP	$761	68,867	4,585
Short Term Accommodation (STA) And Assistance	$537	37,365	14,438
Assistance in Supported Independent Living High Intensity	$509	4,918	1,122
Assistance With Self-Care Activities Standard — TTP	$496	29,660	3,935
Group Activities Standard — TTP	$370	35,066	1,653
Assistance With Self-Care Activities High Intensity	$294	6,092	4,692

Source: NDIS internal administrative data

Providers

In the six months to 31 December 2023 the number of active registered providers of DSW-related supports decreased by 6%, from 9,286 to 8,697. The amount claimed by these registered providers rose by 19% to $9.4 billion, and the average amount claimed per registered provider grew by 27%, from $850,843 to $1,081,264.

On the other hand, active unregistered providers of DSW-related supports increased by 24%, from 92,490 to 114,777, with the amount claimed by these providers experiencing a significant 54% increase, from $2.3 billion to $3.6 billion. Consequently, the average amount claimed by unregistered providers also rose by 24%, from $25,340 to $31,348.

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In the same six-month period to December 2023, 283,406 providers submitted claims for DSW-related services. Among these, the supports most frequently claimed included Access Community Social and Recreational Activities Standard by 77,568 providers, Assistance With Self-Care Activities Standard by 73,555 providers, followed by Provider Travel (37,139), Activity Based Transport (30,664), Capacity Building and Training (24,223), STA And Assistance (14,438), and Group Activities Standard (8,773).

Providers market share

Figure 14 shows that between January 2021 and December 2023, the market share attributed to the top 10 providers, in terms of DSW-related support payments, has seen a decrease from 10.8% to 7.2%. Over this period, it is also observed the number of unregistered providers continue to grow and therefore the corresponding a decrease in market share among registered providers (from 80% to 72%).

Figure 14: Top 10 Providers’ Market Share Against Overall Provider Growth on DSW-related Supports, January 2021 to December 2023

Provider Count	Top 10 Market Share (%)	Market Share (%)
66,153	10.8%	10.8%
79,523	10.0%	10.0%
89,621	9.4%	9.4%
101,459	8.3%	8.3%
112,678	7.8%	7.8%
122,857	7.2%	7.2%

Further analyses demonstrates that the share of top ten providers by payment amounts received across very remote, remote, and non-remote areas all have a steady downward trend (Figure 15).

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Figure 15: Top 10 Providers’ Market Share by Remoteness for DSW-related Supports, January 2021 to December 2023

	Non-Remote	Remote	Very Remote
January - June 2021	11%	55%	41%
July - December 2021	10%	48%	37%
January - June 2022	9%	43%	36%
July - December 2022	8%	39%	35%
January - June 2023	8%	36%	34%
July - December 2023	7%	34%	31%

Source: NDIS internal administrative data

Providers distribution by geographic areas

Table 7 shows, in the second half of 2023, there was a continued decrease in the number of registered providers in non-remote areas, contrasted with

Table 8 showing the growth of unregistered providers across all geographic areas. When comparing the half-year ending December 2022 with the half-year ending December 2023, the number of active registered providers of DSW-related supports decreased by 6%, from 9,286 to 8,697. In contrast, the amount claimed by the registered providers rose by 19% to $9.4 billion, and the average amount claimed increased by 27%, from $850,843 to $1,081,264.

On the other hand, the active unregistered providers of DSW-related supports increased by 24%, from 92,490 to 114,777 providers, with the amount claimed by these providers increasing by 54%, from $2.3 billion to $3.6 billion. Consequently, the average amount claimed by unregistered providers rose a comparable percentage of 24% (from $25,340 to $31,348).

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Table 7: Registered Providers by Remoteness for DSW-related Supports, January 2021 to December 2023

Remoteness	January - June 2021	July - December 2021	January - June 2022	July - December 2022	January - June 2023	July - December 2023
Non-Remote	7,686	8,406	8,745	9,196	8,807	8,612
Remote	369	416	430	420	380	388
Very Remote	206	241	224	233	227	236
Total for Registered	7,748	8,474	8,814	9,286	8,893	8,697

Table 8: Unregistered Providers by Remoteness for DSW-related Supports, January 2021 to December 2023

Remoteness	January - June 2021	July - December 2021	January - June 2022	July - December 2022	January - June 2023	July - December 2023
Non-Remote	58,047	70,522	80,125	91,417	103,028	113,419
Remote	679	864	1,020	1,093	1,199	1,374
Very Remote	379	438	473	530	582	622
Total for Unregistered	58,770	71,391	81,152	92,490	104,263	114,777

Source: NDIS internal administrative data

Note: The totals for registered and unregistered DSW-related providers do not match the overall provider count due to providers offering multiple support types under different registration statuses, a small proportion of providers with indeterminate registration status not detailed in the table, and the unavailability of participant location data at the time of transactions which affects the determination of provider remoteness.

Herfindahl-Hirschman Index

The Herfindahl-Hirschman Index (HHI) is a metric that assesses the level of concentration in a market by examining the market share among businesses. A higher HHI points to a market with less competition, whereas a HHI under 1,500 signals a competitive marketplace. A HHI which is low, potentially indicates a healthy market where no single provider can disproportionately influence market conditions.

Over the period from January 2021 to December 2023, the HHI for DSW supports across varying degrees of remoteness has been on a downward trajectory, revealing

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a decrease in concentration. As shown in Figure 16, the HHI has dropped from nearly 500 for very remote areas and about 300 for remote areas to below 200 for providers in both remote and very remote areas by the end of December 2023. This suggests a significant decrease in market concentration over the past three years, in line with the observed decrease in market share held by the top ten providers.

Figure 16: Herfindahl-Hirschman Index by Remoteness for DSW-related Supports, January 2021 to December 2023

Market concentration

More 800 [Remote @Very Remote 400 300 200 100 Less January - July - January - July - January - July - June December June December June December 2021 2021 2022 2022 2023 2023

Source: NDIS internal administrative data

Note: Adjustments were made to HHI as the overall size of the Australian market and providers’ financial statements are unknown at the time of the analysis. Therefore, the NDIA assumed that the size of the market is equal to the total amount of payments made to providers for DSW-related supports.

Providers claiming below the price limit

Approximately 36% of DSW-related supports were claimed below the price limit. Table 9 provides a detailed comparison of pricing below the limit for both registered and unregistered providers. Over the past three years, there has been a decrease in the percentage of DSW support claims below the price limit for both registered and unregistered provider. The period to December 2023 observed a significant shift in this pattern, especially amongst unregistered providers. The overall pricing behaviour of providers in relation to price limits has demonstrated a consistent trend, noting a decrease in the proportion of claims by registered providers from 82% in the period from July to December 2021 to 68% in the same period in 2023.

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Table 9: Claiming Patterns at Price Limit Analysis for DSW-related Supports January 2021 to December 2023

Claiming patterns – At price limit	January – June 2021	July – December 2021	January – June 2022	July – December 2022	January – June 2023	July – December 2023
Registered	68%	66%	71%	71%	73%	69%
Unregistered	37%	38%	51%	47%	56%	50%
All Providers	63%	61%	67%	65%	68%	63%

Source: NDIS internal administrative data Note: All Providers above are inclusive of providers with the unknown registration status at the time of the transaction.

Business dynamism of registered providers

This section looks at the dynamics of the DSW market among registered providers, given registered providers account for 72% of the total value of payments in the six months leading to December 2023. Business dynamism, characterised by the entry and exit of businesses, as well as the capacity of service providers to adapt to changing market conditions. This dynamism serves as an important indicator of the market’s health.

Figure 17 shows the number of registered and unregistered DSW providers with payments between January 2021 and December 2023 respectively, split by the number of half-year periods in which each provider received a payment. As seen in this figure, 5,335 out of 14,016 (38%) registered providers have received payments in all six half-years between January 2021 and December 2023. These providers account for almost 75% of total DSW support payments across the three-year period. In contrast, only 11% of unregistered providers received payments in the six half-years, implying that registered providers exhibit greater continuity of activity.

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Figure 17: Provider Continuity by Registration Status and Percentage of Total Payments. Registered Providers (Left) and Unregistered Providers (Right), January 2021 to December 2023

Number of Half Years with Payment	Number of Providers	Percentage of Total Payments
1	redacted: s47B - Commonwealth-State relations	80%
2	redacted: s47B - Commonwealth-State relations	60%
3	redacted: s47B - Commonwealth-State relations	40%
4	redacted: s47B - Commonwealth-State relations	20%
5	redacted: s47B - Commonwealth-State relations	0%
6	redacted: s47B - Commonwealth-State relations	0%

Despite a slight decrease in the number of registered DSW-related support providers, they still accounted for a significant 72% of total DSW payments in the latter half of 2023. The following section will focus specifically on registered providers.

In the six months to 31 December 2023, 1,202 registered DSW providers stopped claiming payments for DSW services. Among these providers, 78% continued to receive payments for other types of support within the same timeframe. It’s also notable that 73% of these inactive DSW providers had historically received less than $10,000 per half-year in payments for the last three years.

Figure 18 presents a breakdown of registered providers based on the number of participants they serve and the percentage of their claimed services. This figure highlights a trend towards registered providers serving more participants from the first half of 2021 to the second half of 2023. In particular, the proportion of providers supporting 11 or more participants increased from 37% to 44% among registered DSW providers over this period, indicating a shift towards providers catering to a larger number of participants.

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Figure 18: Registered Providers of DSW-related Supports and Number of Participants that Claimed, January 2021 to December 2023

Participants	January - June 2021	July - December 2023
1 Participant	1846 (0.1%)	1636 (0.2%)
2-5 Participants	2102 (0.8%)	2135 (1.5%)
6-10 Participants	901 (1.5%)	1058 (2.6%)
11-20 Participants	828 (3.8%)	1205 (6.8%)
More than 20 Participants	2071 (93.7%)	2663 (88.9%)

Source: NDIS internal administrative data

An analysis of payment activity for registered providers from January 2021 to December 2023 shows an evolving provider market. ‘New Activity’ within a half-year period is identified when providers who were inactive in the previous half-year begin to receive payments. Conversely, ‘Inactivity’ is noted when providers that received payments in one half-year do not in the subsequent one. These fluctuations are measured as a percentage of the total payments made within that half-year, or the previous one, in the case of inactivity. While the NDIA recognises that this methodology may not perfectly capture market exits, it serves as the best available proxy.

Figure 19 shows that inactive registered providers account for 0.2% or less of the total payments in any half-year period. In comparison, newly active registered providers account for 0.3% to 1.3% of total payments for the corresponding timeframe, with a notable decline in 2023.

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Figure 19: DSW-related Registered Provider Activity Movements, January 2021 to December 2023

1.5%	1.3%	1.1%	1.0%	0.8%	0.5%	0.5%
January - June 2021	July - December 2021	January - June 2022	July - December 2022	January - June 2023	July - December 2023
New Activity as Percent of Total Half-Year Payments	Inactivity as Percent of Prior Total Half Year Payments	New Activity as Percent of Total Half-Year Payments	Inactivity as Percent of Prior Total Half Year Payments	New Activity as Percent of Total Half-Year Payments	Inactivity as Percent of Prior Total Half Year Payments

Further analysis indicates that 87% of inactive registered providers received less than $5,000 in DSW related payments in the half-year prior to becoming inactive. In contrast, active registered providers received on average $999,749 of payments in each half-year period, highlighting the substantial difference in activity between providers that are on the verge of become inactive and those that remain active.

4.4 The Ability Roundtable Benchmarking Survey

The Ability Roundtable has provided the Agency with workforce and financial data from 55 organisations, of which 54 disclosed that they were registered with the Australian Charities and Not-For-Profits Commission (ACNC), for analysis of key metrics. The sample represents organisations with a combined revenue of over $6.0 billion for the 2022-23 financial year, of which NDIS revenue represented $4 billion, and with a workforce exceeding 55,000 personnel. Collectively, these organisations delivered services to over 65,000 unique NDIS participants. More information on this survey and its results are available on The Ability Roundtable’s website.

The analysis of the survey results provided by Ability Roundtable reveals several key insights into the financial performance and workforce dynamics of registered NDIS providers across Australia. For the analysis, the organisations were grouped into one of five bands, with organisations increasing in size from Band 1 to Band 5.

Larger organisations appeared to benefit from economies of scale and lower operating expense ratios, with Band 5 organisations’ operational expenses equating to 19% of their total revenue compared with Band 3 organisations’ 30% of their total revenue. The largest organisations also appeared to have lower permanent staff turnover and are more likely to pay above Award rates (Table 10). Note,

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approximately 50% of participating organisations pay their staff under Enterprise Bargaining Agreements (EBAs).

Table 10: Turnover Percentage of Permanent Casual Workers, as well as Percentage of Organisations that Pay DSW Staff Above the Award Rate

Band Number	Permanent Staff Turnover	Casual Staff Turnover	Percentage paying above Award
Band 1	26%	32%	60%
Band 2	22%	49%	45%
Band 3	23%	32%	55%
Band 4	21%	43%	27%
Band 5	16%	34%	74%
Average	21%	38%	50%

Source: NDIA analysis

The organisations showed general increases in non-current assets alongside increases in non-current liabilities. It is difficult to determine why there was an increase from data alone. This may come from a range of reasons, such as the increasing value of non-current assets. However, it was seen that of those surveyed, only Band 1 (organisations with the smallest revenue size) and Band 5 (organisations with the largest revenue size) reported increases in total equity levels in 2022-23.

In 2022-23, Ability Roundtable’s submission to the APR suggested 36% of sampled organisations recorded a profit. This is a 4.4 percentage points increase from 2021-22. Of all sampled organisations, the data showed the median profitability result to be -2.1% in 2022-23, 0.5 percentage points higher than the result in 2021-22. Of the sampled organisations that made a loss, the data shows a median loss of -5.9% in 2021-22 and -4.9% in 2022-23.

Disability Services Financial Benchmark Report

StewartBrown conducts a Disability Services Financial Benchmark Report that provides an overview of the financial performance of the disability services sector in Australia. It is based on the results of the 51 participating organisations for the 12 months to 30 June 2023. This report can be found on StewartBrown’s website.

The sample represents a combined revenue of $2.5 billion for 2022-23, delivering services to over 26,500 NDIS participants. This survey extends beyond DSW supports, also including Allied Health (Therapy) and Support Coordination supports.

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Australian Charities and Not for Profit Commission (ACNC)

Charities and not-for-profit (NFP) organisations represent a significant segment of the provider market delivering supports to NDIS participants. All entities classified as charities or NFPs are legally required to disclose their annual financial statements. This financial data is made available by the ACNC.

To assess the financial health of charitable and not-for-profit NDIS providers, the Agency undertook an analysis of the financial data from 100 such organisations that have claimed a NDIS payment for at least six months in each of the last four fiscal years. These organisations generated around $2 billion in total revenue in 2022-23, of which around 50 percent of this was generated by claiming for NDIS services.

To conduct the analysis, the 100 organisations were separated into four bands based on their total revenue collected in 2021-22 (the middle year of the data)

To be eligible for the population, a provider must have received a payment for six months, every year for the past four fiscal years from 2019-20 to 2022-23.

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collected*°). Band 1 consists of the 25 organisations with the lowest total revenue base, with Band 2 consisting of the next 25 smallest organisations by revenue, and so on.

It is acknowledged that assessing the financial health of charitable and not-for-profit NDIS providers is challenging. Financial reports do not distinguish between NDIS and non-NDIS activities. This complicates analysis as many organisations serve a wide array of sectors, not solely NDIS participants. The distinct financial characteristics of not-for profit organisations also hinder comparisons and inferences with for-profit organisations’ financial health. For example, for-profit organisations typically do not use volunteer staff to fulfill operational demands and have different tax obligations.

Summary of results

From 2020-21 to 2022-23, of the organisations sampled, there was almost a doubling in the number of NDIS payments that were made, with a 33% increase in the total amount of NDIS revenue claimed over that period. There has also been an increase in the number of NDIS claims made by each organisation. Only 4% of organisations sampled reported a loss in each of the three financial years. Among the organisations analysed, 65% reported a profit in the 2022-23 financial year, marking an increase from the previous year, where only 60% achieved profitability. This is a decline in terms of profits from the 2020-21 financial year, during which a notable 88% of sampled organisations recorded a profit. The result in 2020-21, however, can be largely explained by the temporary increase in price limits given to NDIS providers and wage supplements and government support during the COVID-19 pandemic.

Table 11 details the profitability of the sampled organisations across the three financial years. The average financial performance across the three financial years

45 2021-22 was chosen as the base year, as total revenue of organisation moved in such a way that organisations saw movement between bands far more frequently if 2020-21 or 2022-23 were used as base years.

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was healthy with positive average and median profits across the sample size in each year.

Table 11: Financial performance across 2020-21 to 2022-23

Financial Year	Number that recorded a loss	Number that recorded a profit	Average Profit/Loss	Median Profit/Loss
2020-21	12	88	$1,505,156	$476,943
2021-22	40	60	$565,434	$76,974
2022-23	35	65	$580,586	$76,831

Source: NDIA analysis using ACNC data.

There are other indicators showing the financial health of the NFP industry. Organisations across all revenue bands reported a working capital ratio above the industry benchmark (1.5*°) and consistently maintained debt ratios below 0.5 (a ratio below 0.5 suggests that organisations hold at least double the amount of assets as it does liabilities). The data also suggests that despite the varying scales of operation, the NFP sector has seen growing levels of average revenue generated per Full Time Employee (FTE) over time (Figure 20).

46 National Disability Services Financial Ratio Tool

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Figure 20: Average Revenue per FTE Across 2020-21 to 2022-23

Band Number	Assets	Liabilities	Equity
Band 1	$87,510	$1,367	$86,143
Band 2	$454,496	-$54,670	$509,166
Band 3	$415,590	-$230,466	$646,055
Band 4	$6,966,584	$2,651,625	$4,314,959
Median	$325,819	$44,571	$344,806

Source: NDIA analysis

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Feedback from consultations

A total of 79 provider submissions were received regarding the suitability of the methodology and parameters used in the DSW Cost Model. The majority of feedback received from stakeholders regarding the DSW Cost Model raised concerns about its alignment with the actual costs and complexities faced by the sector in delivering disability support services. It was suggested that the DSW Cost Model may not fully account for the real-world operational and corporate overheads, suggesting a possible underestimation of the financial requirements necessary for service provision.

Concerns raised about the accuracy of assumed overhead costs within the DSW Cost Model are suggested to be a discrepancy between theoretical assumptions and the operational realities experienced by providers. This misalignment extends to the costs associated with ensuring service quality and meeting regulatory compliance, which stakeholders suggest are not sufficiently considered in the current model. The sector called for a revised approach that more accurately reflects the varied and significant needs of service delivery in the disability support sector.

There were also challenges raised regarding workforce management. Particularly in recruiting and retaining skilled personnel for complex care needs and recognising the recent Aged Care Award wage increases, both claimed to have impacts on providers.

See Appendix A for more details on common themes raised in submissions to the 2023-24 APR Consultation Paper.

Discussion

Acknowledgement of concerns raised on the DSW Cost Model

The NDIA acknowledges the complexities of updating the DSW Cost Model, particularly in ensuring that data are recent, reliable, and representative. The last Financial Benchmarking Survey conducted for the 2021-22 financial year is due for an update to better reflect current economic conditions. Stakeholders have raised several issues with the DSW Cost Model:

• Potential underestimation of corporate overheads and operational costs, such as insurance premiums and regulatory compliance.
• The model lacks differentiation and may not fully account for the services or staff needed by clients with higher or specialised needs.
• Setting parameters at the 25th percentile for ‘efficient’ levels may not cover current providers’ costs adequately.

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In response to these critiques, the NDIA has incorporated more comprehensive and representative data sources in the current report, including surveys by Ability Roundtable and StewartBrown. Despite challenges with sample size and representativeness, these efforts aim to better capture the financial experiences of organisations.

The new data provide valuable insights into providers’ financial performances from various perspectives, enriching the NDIA’s decision-making process. As a market steward, the NDIA actively monitors and tracks the financial health of providers to ensure that the diverse and evolving conditions of the NDIS provider market are considered.

Building on the insights from previous surveys, the NDIA has expanded its data analysis this year to include mandated data from not-for-profit organisations, as reported to the ACNC. However, differentiating financials between NDIS-specific activities and broader organisational functions remains complex, particularly given the differing financial structures of for-profit and not-for-profit entities.

The NDIA is committed to continue to collaborate with the sector, providers, and other stakeholders to refine pricing arrangements for Disability Supports. This includes exploring methods to obtain objective information to inform potential approaches.

The NDIA’s ongoing pricing work aligns with broader pricing reform initiatives across the Australian Government. This includes the Department of Social Services’ ’Pricing and Payments Framework’ and the Independent Health and Aged Care Pricing Authority (IHACPA)’s planned work for 2024-25, aimed at reforming NDIS pricing arrangements, reviewing existing pricing approaches, and developing a pricing data strategy.

47 Commonwealth Treasury. (2024). Budget 2024-25: Budget Strategy and Outlook Budget Paper No. 2, page 173. https://budget.gov.au/content/bp2/download/bp2_2024-25.pdf

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Recommendations

Analyses suggest significant variability in the financial performance and growth potential of organisations providing DSW-related supports. Additionally, the labour market for the health and care sector remains tight, which could continue to put upward pressure on the supply of DSWs.

In the financial year 2024-25, the Australian Government has allocated $5.3 million to the Independent Health and Aged Care Pricing Authority (IHACPA), to work with Department of Social Services (DSS) and the National Disability Insurance Agency (NDIA), to undertake the initial work to reform the National Disability Insurance Scheme (NDIS) pricing arrangements. The primary objective of this initiative is to enhance the efficiency and effectiveness of NDIS pricing structures. The initial work is expected to conduct a comprehensive review of current NDIS pricing mechanisms, as well as develop a new pricing data strategy.

On balance, it is considered appropriate to pass on minimum Award wages and national employment standard changes to superannuation at this time. This includes employer superannuation contributions, which will rise from 11% to 11.5% from 1 July 2024.48

Recommendation 1

The NDIA, subject to any specific recommendation arising from the current Annual Pricing Review, should increase the price limits for supports that are determined by the NDIS Disability Support Worker Cost Model from 1 July 2024 to reflect any changes in the minimum wages specified in the Social, Community, Home Care and Disability Services Industry Award 2010 (SCHADS Award) following the Fair Work Commission’s Annual Wage Review and any increase in the Superannuation Guarantee Charge.

48 As determined by the Australian Tax Office

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The temporary loading of 2% was introduced on 1 July 2022 to the DSW Cost Model as a short-term measure to assist providers in managing the increased costs associated with COVID-19 and changes stemming from the SCHADS Award changes. As COVID specific supports continue to wane in other sectors in the economy, it is recommended that this temporary measure to end as scheduled as recommended in the 2022-23 APR.

Recommendation 2

The NDIA should cease the temporary loading applied to the NDIS Disability Support Worker Cost Model from 1 July 2024.

The NDIA recognises there are supports that are not within the scope of the 2023-24 APR. Notably, nursing supports fall into this category, alongside other core and capacity-building supports like personal domestic cleaning and house or yard maintenance.*9

Given the recent aged care reforms, which include up to a 25% wage increase for aged care workers and potential future adjustments to the Nursing Award, it is crucial that these supports remain in line with their applicable markets. Failing to adjust the price limits, particularly nursing supports, could risk the adequacy of support for NDIS participants. Therefore, it is proposed that the price limits for these supports be increased, following the methodology used in previous years’ indexation. It should be noted that capital items are excluded from the APR and is addressed by a separate process.

Recommendation 3

The NDIA, subject to any specific recommendation arising from the current Annual Pricing Review and any future reviews, should increase the price limits for nursing and other supports, not covered by Disability Support Worker-

*9 This does not include Plan Management supports.

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related supports or Capital supports, on 1 July 2024 in line with the weighted movement over the previous twelve months in the ABS Wage Price Index (Australia, total hourly rates of pay excluding bonuses) and the ABS Consumer Price Index (All Groups, weighted average of eight capital cities) over the 12 months to the March Quarter immediately preceding the indexation date (with an 80/20 weighting). This recommendation does not include Plan Management.

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Therapy Supports

Context

Therapy supports play an important role in assisting participants to achieve their personal goals. Early therapeutic interventions enhance participant outcomes and reduce long-term cost by building capacity and independence. These supports are delivered by a diverse range of professionals, such as Occupational Therapists (OT), Speech Pathologists (SP), Psychologists, Physiotherapists, and many others, including therapy assistants who operate under the supervision of therapists. This ensures a broad and inclusive delivery of therapeutic interventions, that meet the diverse needs of the NDIS participants.

Therapy supports are organised into several registration groups, with the majority of therapy supports delivered under three main categories - Therapeutic Supports for improving functional skills (0128), Early Intervention Supports for Early Childhood for children with developmental delays (0118), and Exercise Physiology & Personal Wellbeing Activities for physical health (0126). There are other additional categories provide supports for specific needs like behaviour management and hearing services.

Pricing for therapy services under the NDIS varies by service type, delivery method, location, and whether the services are provided to individuals or groups (see Table 13). The Scheme also allows for claiming of non-face-to-face supports, travel and cancellations. This structure supports the delivery of personalised, effective therapy services to NDIS participants, aiming to improve their independence and participation in daily activities. Additional information on the Pricing Arrangements and Price Limits for therapy supports can be found here.

This chapter reviews the pricing arrangements for therapy supports in the NDIS, assessing their alignment to comparable schemes, and with the private therapy support market.

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Table 13: Price Limits for Therapy Supports as at 1 January 2024

Type of Therapist	NSW / VIC / QLD / ACT	SA / WA / TAS / NT	Remote	Very Remote
Art Therapist, Audiologist, Developmental Educator, Dietitian, Music Therapist, Occupational Therapist, Orthoptist, Podiatrist, Rehabilitation Counsellor, Social Worker, Speech Pathologist, and Other Professional	$193.99	$193.99	$271.59	$290.99
Counsellor	$156.16	$156.16	$218.62	$234.24
Exercise Physiologist	$166.99	$166.99	$233.79	$250.49
Physiotherapist	$193.99	$224.62	$314.47	$336.93
Psychologist	$214.41	$234.83	$328.76	$352.25
Therapy Assistant - Level 1	$56.16	$56.16	$78.62	$84.24
Therapy Assistant - Level 2	$86.79	$86.79	$121.51	$130.19

Source: NDIS Pricing Arrangements and Price Limits 2023-24

Scheme statistics

5.2.1 The number of therapy providers continues to grow

In the six months to 31 December 2023, 379,296 participants, representing 59% of the total 646,449 active participants, as of 31 December 2023, purchased therapy supports through their plans. Table 2 shows that the number of providers delivering therapy supports increased during this period, with 52,736 providers receiving payments, a 14% rise compared to the year before. The total amount claimed by unregistered providers in the six months to 31 December 2023 grew by 60% compared to the same time the previous year. However, most of the total amount claimed for provision of therapy supports is still through registered providers (65%, or $1.3 billion, of therapy supports claimed).

Refer to Table 14, Table 15 and Table 16 for further breakdown of the number of registered and unregistered providers delivering supports to NDIS participants.

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Table 14: Therapy Supports Schemes Statistics – All Providers

Statistics	July – December 2022	July – December 2023	Percentage Change
Total number of NDIS participants	325,319	379,296	+17%
Total number of active providers	46,326	52,736	+14%
Total amount claimed by active providers of Therapy supports	$1.6 billion	$2.1 billion	+28%
Average amount claimed by all active providers of Therapy supports	$35,028	$39,257	+12%

Table 15: Therapy Supports Scheme Statistics – Registered Providers

Statistics	July – December 2022	July – December 2023	Percentage Change
Number of active registered providers of Therapy supports	8,778	7,392	-16%
Total amount claimed by registered providers of Therapy supports	$1.2 billion	$1.3 billion	+15%
Average amount claimed by registered providers of Therapy supports	$132,541	$180,913	+36%

Table 16: Therapy Supports Scheme Statistics – Unregistered Providers

Statistics	July – December 2022	July – December 2023	Percentage Change
Number of active unregistered providers of Therapy supports	38,206	45,961	+20%

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Statistics	July – December 2022	July – December 2023	Percentage Change
Total amount claimed by unregistered providers of Therapy supports	$0.4 billion	$0.7 billion	+60%
Average amount claimed by unregistered providers of Therapy supports	$11,764	$15,651	+33%

Source: NDIS internal administrative data

Please note a discrepancy in the total number of ‘active’ therapy providers, attributable to two factors. 1) some providers offer a mix of registered and unregistered supports, leading to their classification in both categories. 2) a small fraction of providers with undetermined registration status contributes to total payment figures but is excluded from detailed tabulation, representing less than 1% of the overall financial transactions.

Figure 21 shows NDIS payments on therapy supports in the six months to December 2023, which amounted to $2.1 billion. This expenditure accounts for just over 10% of the NDIS’s total expenditure of $20.4 billion during this six-month period, reflecting a 28% increase from the previous year’s spending on therapy supports.

Figure 21: NDIS Expenditure on Therapy Supports Since January 2021 Relative to Total NDIS Expenditure

	January - June 2021	July - December 2021	January - June 2022	July - December 2022	January - June 2023	July - December 2023
Total payments for therapy	$1.1 b	$1.3 b	$1.3 b	$1.6 b	$1.8 b	$2.1 b
Percentage of Total Scheme	8.8%	9.7%	8.7%	9.7%	9.5%	10.1%

Source: NDIS internal administrative data

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Over the last three years payments for therapeutic supports have comprised about 14% of total NDIS payments to registered therapy support providers and about 37% of payments to unregistered therapeutic providers. From January to December 2023, the top three payment support categories for registered providers for therapy supports were:

• Daily Activities (51% of payments)
• Social Community and Civic Participation (22% of payments)
• Capacity Building Daily Activity (13% of payments)

Participants

Participants access a broad range of therapies. In the six months to 31 December 2023, participants claimed therapy supports, predominantly from Occupational Therapists ($441.6 million from 214,271 participants), followed by Early Childhood Professionals ($357.9 million from 93,154 participants), Behavioural Therapists ($287.7 million from 53,064 participants), Physiotherapists ($202.2 million from 95,095 participants) and Speech Pathologists ($198.2 million from 109,829 participants). See Table 17 for more information.

The average payment for a participant receiving therapy supports was $5,458, a 9% increase from the previous period, while the average claim per provider was $39,257, up 12%. This data underlines the significant role of therapy supports in the NDIS, highlighting both the extensive use of these services by participants and the corresponding financial investment by the Scheme.

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Table 17: Scheme Expenditure by Type of Therapy, July to December 2023

Type of Therapist	Total Payments ($ million)	Number of Participants	Number of Providers
Occupational Therapist	$441.6	214,271	8,633
Early Childhood	$357.9	93,154	13,881
Behavioural Therapist	$287.7	53,064	1,454
Physiotherapist	$202.2	95,095	10,134
Speech Pathologist	$198.2	109,829	5,733
Psychologist	$173.9	99,042	12,660
Other Professional	$156.0	101,727	24,139
Exercise Physiologist	$76.9	41,765	4,712
Therapy Assistant	$42.5	40,393	4,045
Counsellor	$27.4	19,966	4,364
Social Worker	$22.9	13,842	2,141
Dietitian	$20.4	23,672	2,053
Travel	$20.1	104,182	11,146
Podiatrist	$10.7	28,251	2,738
Miscellaneous	$9.4	5,135	2,914
Music Therapist	$8.1	5,208	1,039
Art Therapist	$6.9	4,787	1,272
Development Educator	$5.9	3,316	440
Orthoptist	$0.7	1,250	234
Rehabilitation Counsellor	$0.7	724	314
Audiologist	$0.4	840	152

| TOTAL | $2,070.3 | 379,296 | 52,736 |

Source: NDIS internal administrative data

Note: The total for both the number of participants and providers represent unique counts with the July to December 2023 period. ‘Other Professional’ refers to a diverse group of therapy providers offering services such as assessments, recommendations, and group therapies, which may encompass a variety of therapy disciplines not individually listed.

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5.2.3 Providers

Market growth ensures diverse therapy options for expanding participant demand

In the six months to 31 December 2023, as shown in Table 3, 52,736 providers received payments for therapy supports. Most claims were made by ‘Other Professionals’ (24,139 providers), Early Childhood Professionals (13,881 providers), Psychologists (12,660 providers), Physiotherapists (10,134 providers) and Occupational Therapists (8,633 providers).

Registered provider numbers decreased by 16% from 8,778 to 7,392 providers in the six months to 31 Dec 2023. Of the $2.1 billion paid to providers, $1.3 billion was paid to registered providers (Table 15). This is an increase of $174 million from the six months to 31 December 2022. The decline in registered providers, as shown in Figure 22, is attributed to 1,562 providers switching to unregistered status and 1,470 registered providers no longer receiving therapy related payments in the six months to 31 December 2023. In contrast to the decline, 1,327 new providers registered to deliver therapeutic supports in the NDIS in the six months to 31 December 2023 compared to the same period in the previous year.

Figure 22: Registered Therapy Provider Volume Change Between July to December 2022 and July to December 2023

Number of Providers	A = Registered therapy providers July to December 2022	B = Transitioned to unregistered	C = No therapy payments July to December 2023	D = Transitioned to registered	E = New registered therapy providers	F = Registered therapy providers July to December 2023
8,778	-1,562	redacted: s47B - Commonwealth-State relations	-1,470	319	1,327	7,392

Source: NDIS internal administrative data

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Figure 23 shows the distribution of NDIS therapy payments by provider registration status for half-year periods from January 2021 to December 2023. Over this period, therapy payments made to unregistered providers has increased from 18% to 35%. Moreover, payments made to registered providers still accounts for 65% of the totally payment for therapy supports six months to 31 December 2023.

Figure 23: Total Payments for Therapy Support Items by Provider Registration Status, January 2021 to December 2023

	January - June 2021	July - December 2021	January - June 2022	July - December 2022	January - June 2023	July - December 2023
Providers with Unknown Registration	$75 million (18%)	$23 million (1%)	$25 million (1%)	$28 million (1%)	$31 million (1%)	$35 million (1%)
Unregistered Provider	$0.9 billion (75%)	$0.6 billion (23%)	$0.74 billion (25%)	$0.72 billion (28%)	$0.68 billion (31%)	$0.65 billion (35%)
Registered Provider	$0.9 billion (75%)	$0.6 billion (23%)	$0.74 billion (25%)	$0.72 billion (28%)	$0.68 billion (31%)	$0.65 billion (35%)

Source: NDIS internal administrative data

In the six months to 31 December 2023, the five leading therapy categories by total NDIS payments, excluding ‘Other Professionals’, were Occupational Therapists ($441.6 million), Early Childhood Professionals ($357.9 million), Behavioural Therapists ($287.7 million), Physiotherapists ($202.2 million), and Speech Pathologists ($198.2 million). Together, these categories represented $1.5 billion in claims, accounting for approximately 72% of the NDIS’s $2.1 billion expenditure during this period as detailed in Figure 24.

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Figure 24: Largest Ten Therapy Types Based on Total NDIS Payments, January 2021 to December 2023

Counselling	Therapy Assistant	Exercise Physiology	Other Professional	Psychology	Speech Pathology	Physiotherapy	Behaviour	Early Childhood	Occupational Therapy
January - June 2021	July - December 2021	January - June 2022	July - December 2022	January - June 2023	July - December 2023

Source: NDIS internal administrative data

Note: Before July 2022, the NDIS grouped various therapies under ‘Other Therapy’ support. Post-categorisation changes, expenditure on specific therapies like Occupational Therapy and Speech Pathology were more distinctly tracked.

Top 10 providers sustain market share despite a drop in market share

As detailed in Figure 25 and Figure 26, the market share of the top ten registered therapy providers has seen a modest decline, from 14% to just under 11% from January to December 2023. This shift occurred alongside an expansion of the therapy market, with an overall increase of $174 million in payments to registered providers in the six months to December 2023 compared to the same period in the previous year. Although there has been a notable increase in unregistered providers, this does not necessarily indicate a downturn for registered providers, who are still experiencing substantial business growth. The rising number of unregistered providers suggests a broadening of the market landscape rather than a displacement of the existing registered providers’ activities, as the total payments to and number of participants serviced by registered providers continue to grow, demonstrating an expanding and robust NDIS therapy provider market.

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Figure 25: Top 10 Providers’ Market Share Against Overall Provider Growth for Therapy Supports, January 2021 to December 2023

60,000	50,000	40,000	30,000	20,000	10,000
January - June 2021	July - December 2021	January - June 2022	July - December 2022	January - June 2023	July - December 2023
Provider Count	46,326	49,503	52,736	36,001	40,660

Source: NDIS internal administrative data

Figure 26: Top 10 Providers’ Market Share by Remoteness for Therapy Supports, January 2021 to December 2023

	Non-Remote	Remote	Very Remote
January - June 2021	50%	35%	49%
July - December 2021	12%	37%	46%
January - June 2022	11%	34%	44%
July - December 2022	11%	32%	40%
January - June 2023	11%	29%	43%
July - December 2023	11%	27%	43%

Source: NDIS internal administrative data

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The increase in unregistered providers is common for all areas

Table 18 highlights a decrease in the number of registered therapy support providers in non-remote areas, with a drop from 8,509 providers in the six months to 30 June 2021 to 7,326 in the six months to 31 December 2023. Conversely, unregistered providers have risen in all areas, growing from 27,528 to 45,543 in non-remote areas within the same periods (Table 19). This growth in unregistered providers contributes to the declining market power of the top ten providers which may signal increasing a less concentrated market. This is further explored in the market concentration section with the Herfindahl-Hirschman Index (HHI).

Table 18: Registered Providers by Remoteness for Therapy Supports, January 2021 to December 2023

Remoteness	January – June 2021	July – December 2021	January – June 2022	July – December 2022	January – June 2023	July – December 2023
Non-Remote	8,509	8,695	8,552	8,735	8,252	7,326
Remote	537	553	534	520	522	519
Very Remote	268	288	282	300	298	324
Total for Registered	8,552	8,745	8,595	8,778	8,302	7,392

Table 19: Unregistered Providers by Remoteness for Therapy Supports, January 2021 to December 2023

Remoteness	January – June 2021	July – December 2021	January – June 2022	July – December 2022	January – June 2023	July – December 2023
Non-Remote	27,528	31,964	34,090	37,940	41,938	45,543
Remote	407	511	583	660	775	944
Very Remote	169	209	250	299	346	427
Total for Unregistered	27,740	32,205	34,350	38,206	42,260	45,961

Source: NDIS internal administrative data

Note: The total for registered providers of therapy supports and total for unregistered providers of therapy supports does not align with the total number of therapy support providers. The reasons for this are: 1) One provider can provide multiple supports, being registered for some supports and unregistered for others (different registration groups) in the same period, so they are accounted for in both groups of providers; 2)

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Providers with unknown registration are captured in total amounts but not presented in this table as they make up a very small percentage of total payments; and 3) Some participant location details at the time of transaction were not available, so provider remoteness could not be determined.

Herfindahl-Hirschman Index - Increasing provider diversity signals less

concentration in the therapy market

The Herfindahl-Hirschman Index (HHI) measures market concentration and offers insight into the competitive dynamics of therapy support providers within the NDIS from January 2021 to December 2023. A HHI below 1500 signals a concentrated market, and the observed decrease in the HHI during this timeframe indicates a growing level of concentration. This trend has correlated with the diminishing market share of the top ten providers, which has dropped to just under 11%, and the growth in the market share of unregistered providers, which has almost doubled from 18% to 35%.

Adjustments to the HHI have been made, assuming the total market is equivalent to the sum of payments made to providers for therapy supports, due to the absence of comprehensive financial data for the Australian market and individual providers’ financial statements. This approach offers a practical snapshot of the market’s competitive environment, as visually represented in Figure 27.

The adjusted HHI index has remained low for non-remote areas between the observation period of six months to June 2021 and six months to December 2023. The perceived lack of concentration of providers has been most pronounced in the very remote areas; however, this situation has improved over the observation period. This is one metric to assist the Agency understand the health of the therapy market, with this trend suggesting an increasing diversity in provider options and potential benefits for NDIS participants in the therapy market.

Figure 27: Herfindahl-Hirschman Index for Therapy Supports, January 2021 to December 2023

Market concentration More 500 =Remote Very Remote 375 250 125 Less 0 » , wo . wave January - July - January - July - January - July - June December June December June December 2021 2021 2022 2022 2023 2023

Source: NDIS internal administrative data

Note: Adjustments were made to HHI as the overall size of the Australian market and providers’ financial statements are unknown at the time of the analysis. Therefore, the NDIA assumed that the size of the market is equal to the total amount of payments made to providers for DSW-related supports.

Provider claiming analysis — Unregistered providers are more likely to be charging below price limits

Approximately 34% of services are paid under the published price limit, showing a slight decrease over recent periods across all providers. These claiming patterns are shown in Table 20 that distinguish between services priced at the price limit for both provider types. This shows a consistent increase in the proportion of services billed at the price limit across all providers, with registered providers more likely to charge at the limit compared to unregistered ones.

While this trend is common to both registered and unregistered providers, unregistered providers more frequently offer services below the price limit (57% claimed at the price limit compared to registered providers’ 70% in the six months to December 2023). Compared to total claims, the share of payment claims by unregistered providers has almost doubled from 18% to 35% from the first half of 2021 to the end of the 2023.

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Table 20: Claiming Patterns at Price Limit Analysis for Therapy Supports, January 2021 to December 2023

Claiming patterns – At price limit	January – June 2021	July – December 2021	January – June 2022	July – December 2022	January – June 2023	July – December 2023
Registered	64%	66%	68%	69%	70%	70%
Unregistered	41%	45%	49%	52%	56%	57%
All Providers	59%	61%	63%	64%	65%	66%

Source: NDIS internal administrative data

Note: All Providers above are inclusive of providers with the unknown registration status at the time of the transaction.

Business dynamism in the NDIS therapy support market

This section assesses the activity and change among providers in the therapy market. Business dynamism is gauged by the frequency of new providers joining and existing ones becoming inactive in the market, which serves as an indicator of the market’s overall health, and market competition.

To further assess the market dynamics, the NDIA reviewed the payment activities of registered providers over a three-year period from January 2021 to December 2023. ‘New activity’ is characterised by providers receiving payments in the half-year who did not receive payments in the preceding half-year. Conversely, ‘inactivity’ refers to providers not receiving payments in a half-year after having received payments in the previous one. Each provider’s activity is quantified as a percentage of the total payments within that half-year for new activity, or the prior half-year for inactivity. The NDIA recognises that this method does not perfectly measure market exits but provides the best estimation with the data available.

Despite a decrease in the number of registered therapy providers, they still accounted for 65% of total payments in the six months to 31 December 2023. This, in conjunction with the HHI findings, suggests that while the market is contracting in registered provider numbers, it continues to remain an important part of the therapy market.

Among registered therapy providers, 1,086 providers became inactive during this period; however, just under 840 providers of this group remained financially active by receiving payments for other services. Further analysis shows that 78% of these inactive therapy support providers had consistently received payments under $10,000 every six months, indicating that smaller providers could have contributed to the NDIS therapy market’s fluctuation.

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Figure 28 displays the change in registered provider activity between January 2021 to December 2023. Over the past three years, inactive registered providers in each half-year contributed to less than 0.4% of total payments. In contrast, registered providers with new activity in a half-year have contributed between 0.5% and 1.2% of total payments for that same period. The trend in the chart shows new providers receiving a smaller portion of total therapy support payments in 2023.

Figure 28: Registered Therapy Provider Activity Movements, January 2021 to December 2023

January - June 2021	July - December 2021	January - June 2022	July - December 2022	January - June 2023	July - December 2023
New Activity as Percent of Total Half-Year Payments	1.2%	1.2%	0.7%	0.9%	0.5%
Inactivity as Percent of Prior Total Half Year Payments	0.2%	0.3%	0.4%	0.3%	0.3%

Additional analysis reveals that inactive registered providers had relatively smaller claims averaging $3,129 in each half-year before becoming inactive, of which 88% receiving less than $5,000. This contrasts sharply with active registered providers, who claimed an average of $139,542 each half-year. This difference in payments underscores the extent of market diversification and the relative financial weight of new versus established providers.

Figure 29 offers a more granular look at the number of participants supported by registered providers, showing a trend towards a larger client base in the period between January to June 2021 and July to December 2023. Despite a reduction in the number of registered therapy support providers over this period, the number of providers servicing more than 20 participants increased, with these providers receiving 96.2% of payments in July to December 2023.

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Figure 29: Registered Providers of Therapy Supports and Number of Participants that Claimed, January 2021 to December 2023

Number of Participants	January - June 2021	July - December 2023
1 Participant	1459 (0.2%)	1412 (0.2%)
2-5 Participants	2076 (1.2%)	1486 (0.6%)
6-10 Participants	1093 (1.7%)	772 (0.9%)
11-20 Participants	1176 (3.7%)	843 (2.2%)
More than 20 Participants	2748 (93.2%)	2879 (96.2%)

Source: NDIS internal administrative data

Figure 30 shows the number of registered therapy providers receiving payments from January 2021 to December 2023. Notably, 6,342 (48%) of 13,239 registered providers consistently received payments in all six half-year periods, which made up 94% of total payments. This data points to a common operating model adopted by large, registered providers which serves more participants.

Figure 30: Provider Continuity by Registration Status and Percentage of Total Payments. Registered Providers (Left) and Unregistered Providers (Right), January 2021 to December 2023

Number of Half Years with Payment	Number of Providers	Percentage of Total Payments
1	5000	40%
2	6000	80%
3	7000	100%

Source: NDIS internal administrative data