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Specifically, Psychologists saw a 24.3% increase, and Physiotherapists increased by 25.9%, reflecting a growing workforce responding to heightened healthcare demands, including from NDIS participants.

Figure 5: Number of Registered Therapists from 2018 to 2022

Jobs and Skills Australia considers many NDIS-related occupations (relevant for the broader HCSA too) to be in shortage - aged and disabled carers, personal care and special care workers, physiotherapists, speech professionals and audiologists, occupational therapists, and psychologists²⁰, supported by record high numbers of

^{20 Jobs and Skills Australia. (2024). Jobs and Skills Atlas. https://www.jobsandskills.gov.au/jobs-and-skills-atlas-dashboard?nav=state&region=aus&tab=state-occupations; an occupation is in shortage when employers are unable to fill or have considerable difficulty filling vacancies for an occupation or}

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vacant positions in NDIS-related occupations. There were 13,000 vacant positions in February 2024 for these NDIS-related occupations (see Figure 6)²¹. The occupations with the highest number of vacancies were aged and disabled carers, nursing support and personal care workers and occupational therapists²². Figure 7 shows the comparison between job vacancies and total employees for each occupation in the NDIS-related occupations. The occupations with the highest proportion of vacancies relative to their total occupational employment levels are speech professionals and audiologists, occupational therapists, and physiotherapists.

Figure 6: Job Vacancies in NDIS-related Occupations from 2015 to 2023

Vacancies 20,000 16,000 Special Care Workers Speech Professionals and Audiologists 12 ,000 Occupational Therapists Welfare Support Workers 8,000 Nursing Support and Personal Care Workers 4,000 Physiotherapists Aged and Disabled Carers &

Source: Jobs and Skills Australia

cannot meet significant specialised skill needs within that occupation, at current levels of remuneration and conditions of employment and in reasonably accessible locations.

²¹ Nowcast of Employment by Region and Occupation. https://www.jobsandskills.gov.au/data/nero/nero-dashboard

²² ibid

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Figure 7: Job Vacancies compared to Total Occupational Employment at November 2023

Per Cent
20
15
10

Source: Jobs and Skills Australia; ABS Labour Force, Australia, Detailed

Data from Jobs and Skills Australia in December 2023 indicates that there may have been an improvement in matching community and personal service workers to vacancies, in line with a softening of tight labour market conditions. Over the quarter,

fill rates (percentage of advertised vacancies filled by occupation) for vacant positions, applicants per vacancy, qualified applicants per vacancy‘, and suitable

23 Note psychologists have not been included as the employment data available also includes psychotherapists.

24 Qualified applicants are the applicants who are assessed by employers as meeting the required qualification criteria of an advertised vacancy.

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• Applicants per vacancy improved (25), particularly in regional areas (26). This trend is the same for all occupations (27).
• Continued net immigration could alleviate some of the current labour supply pressures in the care and support economy workforce, as could growth in the education and training for these occupations. Overseas-born workers comprise a large and growing proportion of the care and support workforce in Australia (40%) (28). Migration levels have recovered strongly since 2020-21 (COVID-19 related border closures), although levels are forecast to reduce significantly due to increased visa requirements (29). Those studying health-related subjects (all students studying at higher education institutions) increased by 4.2% per annum on average between 2012 and 2022 (30).
• The disability workforce is expected to increase significantly to support the forecast growth in the NDIS and the HCSA sector. The Australian Government projects

References

25 Suitable applicants are those who are deemed by employers to be suitable for the job advertised. 26 Jobs and Skills Australia. (2024). Skills Shortage Quarterly Report - December 2023. https://www.jobsandskills.gov.au/publications/skills-shortage-quarterly-december-2023 27 ibid 28 Jobs and Skills Australia. (2021). Care Workforce Labour Market Study Report Summary. https://www.jobsandskills.gov.au/sites/default/files/2023-11/care_workforce_labour_market_study_- _report_summary.pdf 29 Australian Bureau of Statistics. (2023). National, state and territory population June 2023. https://www.abs.gov.au/statistics/people/population/national-state-and-territory-population/latest-release; Commonwealth Treasury. (2023). Mid-Year Economic and Fiscal Outlook 2023–24. https://budget.gov.au/content/myefo/download/myefo2023per centE2per cent80per cent9324.pdf; Crowe, D. (2023, December 11). Australia’s migrant intake blew out to 510,000. Students are central to the plan to halve that. Sydney Morning Herald. https://www.smh.com.au/politics/federal/australia-s- migrant-intake-blew-out-to-510-000-students-are-central-to-the-plan-to-halve-that-20231210-p5eqcg.html 30 Department of Education. (2024) Student Data. https://www.education.gov.au/higher-education-statistics/student-data

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employment in the HCSA sector to grow by 257,300 people (or 12.1%) over the five years to May 2028, the fastest growth of all 19 Australian and New Zealand Standard Industrial Classification (ANZSIC) industries*! and more than double the next closest sector in the economy (Professional, scientific, and technical services) (Figure 8). Employment growth for aged and disabled carers is expected to be 42,600 people between May 2023 and May 2028, equating to a total growth rate of 14.3%°2. Employment projections show a 17.2% growth for therapy professionals by 2028 (see Table 1).

Figure 8: Projected Employment Growth for Five Largest Sectors from May 2023 to May 2028

’000s Workers	Health Care and Social Assistance	Professional, Scientific and Technical Services	Education and Training	Manufacturing	Accommodation and Food Services
257	117	82	73	59

• Australian Government. (2023). Employment Projections. https://labourmarketinsights.gov.au/our-research/employment-projections/ °2 Australian Government. (2023b). Employment Projections. https://www.jobsandskills.gov.au/data/employment-projections

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Table 1: Employment Numbers and Projected Employment Growth for Therapy Sector

Occupation Code	Occupation	Employment Level — May 2023 (’000)	Projected employment level – May 2028 (’000)	Projected employment growth – five years to May 2028	Projected employment growth – five years to May 2028 (%)
2527	Audiologists and Speech Pathologists/Therapists	15,100	17,600	2,500	16.6%
2522	Complementary Health Therapists	8,400	9,800	1,400	17.0%
2721	Counsellors	29,700	34,200	4,500	15.1%
2511	Nutrition Professionals	8,200	9,500	1,200	15.1%
2524	Occupational Therapists	26,000	30,400	4,400	16.9%
2525	Physiotherapists	37,300	43,900	6,500	17.5%
2526	Podiatrists	5,900	7,000	1,000	17.6%
2723	Psychologists	41,800	48,600	6,800	16.3%

Source: Job and Skills Australia

Australian Government. (2023). Employment Projections. https://labourmarketinsights.gov.au/our-research/employment-projections/

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Wage growth

The rate of wage growth in the economy has been increasing since June 2020. Wage growth (as measured by the all-industries’ Wage Price Index excluding bonuses) rose to 4.3% in the year to December 2023, its fastest annual rate since 20094. The Commonwealth Treasury projects wage growth to be 4% in 2023-24 before decreasing in the following three years.

The HCSA sector had significant wage growth of 5.5% in the year to December 2023, above the all-industries’ growth rate, suggesting strong upward pressure on wages for care and support sector workers (see Figure 9)%°.

One of the reasons for wage inflation in the sector has been increases in Award wages, such as a 15% increase in minimum wages for direct care employees working in aged care*” (Social, Community, Home Care and Disability Services (SCHADS) Industry Award, Aged Care Award, and Nurses Award) from 1 July 2023, an increase in the national minimum award wages of 5.75% from 1 July 2023, and an increase in the minimum wage from 1 July 2023*8.

The transferability of skills and qualifications across the care and support economy and the HCSA sector means that NDIS providers need to compete for workers with

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aged care, health care and childcare services. This competition is influenced by various factors such as relative wages.

Figure 9: All Industries and HCSA Sector Wage Price Index from 2015 to Forecasted 2027

Per Cent
6	HCSA
4	~
Se	-o—
o-	lat co n ° ~ m a wn io ~ rh a a a a a c c c c c c c c c c c c 4 c
_	3 = s = = _ = =

Source: ABS National Accounts, Commonwealth Treasury

Disability support worker wage inflation

The Award wage system is one of the determinants of wages for disability support workers (DSWs), and thus the cost of many related NDIS supports. Many DSWs delivering NDIS supports are paid under Schedule B of the SCHADS Award.

Minimum weekly payments for DSWs continue to be above the comparable industries in the care and support economy when considering a similar type of worker (Figure 10). Note, it is considered reasonable to match a DSW with the Aged Care Award Level 4 worker. The NDIA does acknowledge some supports delivered to NDIS participants could be delivered by other types of workers classified across other types of aged care employees, such as level 3 or level 5. This matching is based on the type of work generally performed by this type of worker (personal care tasks by a “personal care worker grade 3”) and personal care support provided require working under limited supervision. Further the Aged Care Award level 4 worker can require a qualification at Certificate 3 or higher, while the SCHADS Award Level 2 worker requires a Certificate 4 or higher.

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Figure 10: Weekly Minimum Wage for SCHADS Award, Aged Care Award, Children Services Award for Comparable Workers

Source: Fair Work Ombudsman

Table 2 displays a comparison of wage data from major job platforms as of February 2024, demonstrating that DSWs earn, on average, higher hourly wages compared to aged care and children services workers.

Occupation	Employed	Seek	Indeed	PayScale
Disability support worker	280,000 (2021-22)	$35 - $40	$36.79	$29.37
Aged care worker	195,000 (2020)	$20 - $30	$33.69	$24.83
Children services worker	216,000 (2021)	$25-$30	$31.29	$24.47

Source: NDIS Review, Department of Education, Committee for Economic Development of Australia (CEDA). Estimates exclude nurses and allied health professionals. Wages from Seek, Indeed and PayScale

3.8 Aged Care Award wage changes

On 15 March 2024, the Fair Work Commission (FWC) made the decision for further adjust wages for direct care and indirect care employees in the aged care sector of between 18.2% to 28.5%, inclusive of the interim 15% increase already awarded

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from 1 July 2023°°. It is still too early to determine the impacts of this decision on wage increases for aged care workers, which brings aged care workers roughly on par with disability workers, but this warrants ongoing monitoring. The NDIA’s DSW Cost Model uses the SCHADS Award, social and community services employee, Level 2, pay point 3 as the basis of setting the standard disability support worker. The 2022-23 Annual Pricing Review considered this to be appropriately matched with the Aged Care Award Level 4 worker.

In the proposed amendments to the Aged Care Award classifications and definitions found in Schedule | (page 68) of the draft determination and award mark-up, the current “Aged care employee — direct care — level 4” will translate into the proposed classification of “Aged care employee — direct care — level 3 - Qualified”.4°

This matching is based on the type of work generally performed by this type of worker, personal care tasks and personal care support requiring working under limited supervision. Further, the proposed Aged Care Award “Aged care employee — direct care — level 3 — Qualified” requires a Certificate III in Individual Support (Ageing) or equivalent, while the SCHADS Award Level 2 worker requires a certificate 4 or higher.

The NDIA does acknowledge some supports delivered to NDIS participants could be delivered by other types of workers classified across other Schedules or Awards. For instance, the proposed new classifications for aged care employee — direct care - level 2 or level 4.

Comparison of these Award worker minimum wages show the wage difference between comparable workers continue to narrow between the disability and aged care sector. From 1 July 2023, the weekly pay rate for the full and part time

---

39Fair Work Commission. (2024). Summary of Decision 15 March 2024: Work value case — Aged care industry — Stage 3. https://www.fwc_gov.au/documents/decision-summaries/2024fwcfb150-

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40 Draft determination and award mark-up - Aged Care Award 2010 (fwc.gov.au)

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SCHADS Award Level 2, pay point 3 was $1,300.60 ($34.23 per hour). The equivalent to the full and part time Aged Care Award “Aged care employee — direct care — level 4” from 1 July 2023 was $1,144.20 ($30.11 per hour).

The proposed increase to the full and part time Aged Care Award “Aged care employee — direct care — level 3 — Qualified” is expected to raise the minimum wage for this worker to $1223.90 ($32.21 per hour), a proposed pay increase of 23% from prior to these Aged Care reform, inclusive of the previous 15% interim increase. This would equate to a difference of $76.7 (approximately $2.02 per hour), with the SCHADS Level 2.3 worker wage rate being 6.7% higher.

Overall, the NDIA acknowledges that adjustments to Aged Care worker wages and other reforms being undertaken in aged care. However, given the pay of disability support workers still considered being competitive, on balance the NDIA expects the impact of these changes to the cost of similarly skilled workers to be limited in the short run. Moreover, these changes may impact workforce availability across the broader care sector, so the NDIA should continue to monitor these reforms as suggested in 2022-23 APR.

41 Social, Community, Homecare And Disability Services Industry Award 2010 pay guide effective 1 July 2023 found at Pay guides - Fair Work Ombudsman.

42 Aged Care Award 2010 pay guide effective 1 July 2023 found at Pay guides - Fair Work Ombudsman.

43 Draft determination and award mark-up - Aged Care Award 2010 (fwc.gov.au)

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Disability Support Worker related supports

Disability Support Workers (DSWs) are an essential part of Australia’s care and support workforce, bridging the gap between healthcare services and daily living assistance for individuals with disabilities. DSWs represent the sectors diversity, working across various settings, from private homes to community-based programs, providing personalised support that enhances the independence of NDIS participants.

DSW Cost Model

The NDIA uses the Disability Support Worker Cost Model (DSW Cost Model) to estimate the cost that a reasonably efficient provider would incur in delivering a billable hour of support. Its primary aim is to ensure that pricing reflects the cost-of-service delivery.

Parameters of the DSW Cost Model

In 2022, the NDIA simplified the DSW Cost Model. The simplification was prompted by a recognition that the model’s specificity could inadvertently encourage rigid adherence to its parameters as de facto targets, potentially restricting innovation, and adaptability of providers. By consolidating the cost categories into direct worker employment costs, operational overheads, and corporate overheads, the NDIA aimed to reflect the nuanced ways providers manage their resources. The current parameters of the cost model are outlined below:

• Base salary and shift loadings: The cost model is based on permanent worker costs. These are linked to Social, Community, Home Care and Disability Services Industry Award 2010 (SCHADS Award) wage levels 2.3, 2.4/3.1, 3.2 and 4.4.

• Direct on-costs: Includes Superannuation entitlements (currently 11%, 11.5% from 1 July 2024), Annual Leave entitlements (20 days), Personal Leave entitlements including domestic and family violence leave (10.3 days), Long Service Leave entitlements (4.3 days), and Employee Allowances.

• Operational overheads: Covers supervision, quality and safeguarding, training, and workforce rostering costs, alongside provisions for utilisation rates and the mix of permanent versus casual staff and the extent to which overtime is utilised.

• Corporate overheads: Accounts for essential business functions such as accounting, human resources, information technology, legal, and marketing.

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• Margin: Which represents the return that the provider makes because of the provision of working capital to the business.
• Temporary loading: Acknowledges additional costs arising from COVID and SCHADS Award adjustments, introduced on 1 July 2022.

The DSW Cost Model is driven by the relevant SCHADS Award wage movements, operates on a multiplicative basis where operational and corporate overheads, as well as profit margins, are determined as a percentage of the direct costs, including wages and on-costs. Any changes in the wage rates directly affects the entire model’s cost structures. Moreover, temporary adjustments, applied as a percentage of all costs at the end of calculations, recognise additional variables like COVID-19 impacts and SCHADS Award updates.

In setting NDIS price limits for DSW related supports, the model is an important approximation, considered alongside market dynamics, award conditions, and regulatory requirements such as minimum wages and superannuation contributions.

Applicable industrial award

The national award for DSWs is the SCHADS Award. The NDIA recognises that some DSWs are classified as Home Care Employees and others are classified as Social and Community Services Employees under the SCHADS Award, and some DSWs are employed under Enterprise Bargaining Agreements (EBAs). However, these EBAs must leave the worker no worse off than they would be under the applicable industry Award. The NDIA therefore considers the conditions set out in the SCHADS Award to be the appropriate foundation of the DSW Cost Model.

The NDIA recognises that providers can employ DSWs with different skill levels and levels of experience to meet the different needs of participants. The Cost Model therefore has different sets of cost assumptions for four types of workers (DSW Level 1, DSW Level 2, DSW Level 3 and DSW Level 4). This does not mean these are the only types of workers who can deliver NDIS supports through DSW-related supports.

DSW price limit growth

Standard DSW-related supports in the Cost Model use the SCHADS Award, at Schedule B, level 2.3. Level 2.3 has seen, on average, an annual increase of 6.1% since 2013, outpacing the Wage Price Index (WPI) by over 2% (see Figure 11). These rises, mandated by the Fair Work Commission (FWC) through the Award system, account for approximately 80% of the increase in NDIS DSW price limits.

The Equal Remuneration Order (ERO), issued by the FWC in 2012, has significantly influenced the SCHADS Award growth. The ERO addressed gender-based pay disparities in community service roles, mandating special pay rises in addition to the regular annual increases through the Award System until 2020. As a result, the SCHADS Award’s minimum pay rate for level 2.3 is now 23% higher than it would be.

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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

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.

Figure 12: NDIS Expenditure on DSW-related Supports since January 2021 Relative to Total NDIS Expenditure

	$7.3 b	$8.0 b	$8.9 b	$10.3 b	$11.8 b	$13.0b
January - June 2021	July - December 2021	January - June 2022	July - December 2022	January - June 2023	July - December 2023

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)

4.2.1 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 for DSW-related supports, January 2021 to December 2023

	Number of Providers	TTP Amount
January - June 2021	$6750 m	$92 m
July - December 2021	$74 m	$7080 m
January - June 2022	$73 m	$7648 m
July - December 2022	$57 m	$8202 m
January - June 2023	$55 m	$7839 m
July - December 2023	$31 m	$8078 m

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4.2.2 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 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 (%)
January - June 2021	66,153	10.8%
July - December 2021	79,523	10.0%
January - June 2022	89,621	9.4%
July - December 2022	101,459	8.3%
January - June 2023	112,678	7.8%
July - December 2023	122,857	7.2%

Further analyses demonstrate 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 2222	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
Remote
January - June 2021
July - December 2021
January - June 2022
July - December 2022
January - June 2023
July - December 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.

4.3 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	redacted: s47B - Commonwealth-State relations
2	redacted: s47B - Commonwealth-State relations	redacted: s47B - Commonwealth-State relations
3	redacted: s47B - Commonwealth-State relations	redacted: s47B - Commonwealth-State relations
4	redacted: s47B - Commonwealth-State relations	redacted: s47B - Commonwealth-State relations
5	redacted: s47B - Commonwealth-State relations	redacted: s47B - Commonwealth-State relations
6	redacted: s47B - Commonwealth-State relations	redacted: s47B - Commonwealth-State relations

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	0.1%	0.2%
2-5 Participants	0.8%	1.5%
6-10 Participants	1.5%	2.6%
11-20 Participants	3.8%	6.8%
More than 20 Participants	93.7%	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

Period	New Activity as Percent of Total Half-Year Payments	Inactivity as Percent of Prior Total Half-Year Payments
January - June 2021	1.3%	0.1%
July - December 2021	1.1%	0.1%
January - June 2022	0.5%	0.1%
July - December 2022	0.8%	0.2%
January - June 2023	0.5%	0.1%
July - December 2023	0.3%	0.1%

Source: NDIS internal administrative data

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 becoming 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 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).

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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, which may indicate expansion and growth through acquisitions, capital expenditures and projects funded by loans for all Bands. 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 37% of sampled organisations recorded a profit. This is a 5.4 percentage points increase from the previous year. Of all sampled organisations that were profitable, 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 all the sampled organisations that made a loss, the data shows a median loss of 2.1% in 2021-22 and 4.9% in 2022-23.

4.5 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.

The analysis of the survey results suggests that in 2022-23, 45% of sampled organisations recorded a profit, an increase from 43% in FY21-22. The sample, of those providers who recorded an operating deficit of $0.91m for 2021-22 per provider to an average operating deficit of $1.26m per provider for 2022-23.

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The survey also delved into the operating result at the service level, where for the sample, four out of the six services covered were operating at a loss. Supports with an operating profit were Supported Independent Living (SIL) (3.1%) and Daily Living non-SIL (2.2%) supports, whereas operating at a loss were Social, Community Participation (-0.3%), Supported Employment (-4.1%), Allied Health (-4.6%) and Support Coordination (-10%).

4.6 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 over the last four fiscal years⁴⁴. 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 collected⁴⁵). 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.

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⁴⁴ 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.

⁴⁵ 2021-22 was chosen as the base year, as total revenue of organisations 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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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 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

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industry benchmark (1.5⁴⁶) 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).

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

Band Number	2020-21 Financial Year	2021-22 Financial Year	2022-23 Financial Year
Band 1	$75,698	$124,692	$124,692
Band 2	$124,692	$142,534	$142,534
Band 3	$138,631	$138,631	$159,962

As was seen in the analysis of the Ability Roundtable survey, there were increases in equity for most organisations, with all bands recording improvements. It was found that despite there not being as many profitable organisations in 2022-23 as there were in 2020-21 (the latter being due to additional financial support provided to

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46 National Disability Services Financial Ratio Tool

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providers during the pandemic), all bands saw substantial growth in assets over the 2021-22 and 2022-23 (Table 12). This growth was particularly notable among organisations in the Band 4 (top 25 organisations by revenue size), where on average, total equity levels rose by over $4 million over the period.

Table 12: Asset, Liability and Equity Change from 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

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.

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Discussion

4.8.1 NDIA response to concerns raised on the DSW Cost Model

The NDIA acknowledges the complexities of updating the DSW Cost Model, specifically the challenges related to ensuring that data are recent, reliable, and representative. The NDIA previously relied on the Financial Benchmarking Survey, last administered for the 2021-22 financial year, alongside established sector-based survey introduced the possibility that the model may not fully align with the evolving economic conditions of providers since that time.

Stakeholder feedback has suggested several issues with the DSW Cost Model:

• Potential underestimation of corporate and operational overheads, attributed to factors as such insurance premiums and regulatory compliance costs.
• Potential model limitations where the Model does not fully account for services or staff required by clients with higher or more specialised needs.
• Concerns were raised on the appropriateness of setting price limits set based on the ‘efficient’ level at the 25th percentile across a range of parameters in the Model. Many suggest it is not adequate to allow providers to recover costs.

In response to these criticisms, the NDIA has endeavored to integrate more comprehensive and representative data sources in the current report. This includes collaboration with sector-led benchmarking surveys like those conducted by Ability Roundtable and StewartBrown. These efforts, however, have faced challenges with sample size and representativeness, underscoring the difficulty in capturing the full range of organisational and business financial experiences.

Building on the insights from previous surveys, the NDIA has expanded its data analyses this year which further include utilising mandated data from not-for-profit organisations, as reported to the ACNC. Yet, differentiating financials between NDIS-specific activities and broader organisational functions remains a complex task, complicated further by the varying financial structures of for-profit and not-for-profit entities.

On balance, these new data offer insights of providers financial performances from different perspectives, which ultimately enriches the decision-making process. This is important so that the varied and evolving conditions of the NDIS provider market are considered. The NDIA should work with the sector, providers and other stakeholders to consider options for setting prices for Disability Supports, including but not limited to exploration of a new pricing approach. This should include exploration of methods to obtain objective information to inform potential approaches.

Future pricing approach should consider broader economic pressures that impact provider operations, as well as alignment to the outcomes from ongoing reviews and

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recommendations from the Department of Social Services’ led ‘Pricing and Payments Framework’ project as outlined in the NDIS Review.

Recommendations

In determining the price limits for DSW-related supports, analyses suggest a market where there is a variability of organisational financial bottom lines and ability to grow. Evidence also suggests that the labour market for the health and care sector continues to remain tight, which could continue to put upward pressure on supply for DSWs.

There is considerable variability in financial performance among organisations and the persistent tightness in the care and support workforce. In the absence of representative data of the NDIS provider population, the NDIA does not have sufficient evidence to support a structural change to the DSW Cost Model currently. Therefore, 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 that will rise from 11% of wages to 11.5% from 1 July 2024.

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.

Footnote: As determined by the Australian Tax Office

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The NDIA believes that as a market steward, it is imperative to be able to monitor and track the financial performance of providers within the sector to ensure that they remain financially viable. This was discussed in the NDIS Review final report for the need of quality data to assist decision-making. Stakeholders have expressed concerns that the current model does not accurately reflect the real-world costs of service delivery, particularly suggesting failing to capture the full scope of operational and corporate overheads necessary for high-quality support.

In the near term, the NDIA should aim to address the present gap in representative financial information over the next financial year through collaboration with the sector. In the long term, the need for a new pricing approach that better addresses the complexities and variations in service needs is highlighted.

As discussed in the 2022-23 Annual Pricing Review report, there were drawbacks to the Agency, through third-party benchmarked conducting financial benchmarking surveys in the past. There are still existing data limitations when it comes to gauging the health of the provider market such as a full picture of provider financials. Some gap has been narrowed through the assistance of sector benchmarks such as Ability Roundtable and StewartBrown, as well as investigation of published financial statements from not-for-profit organisations.

Given these critiques and the acknowledgment of the necessity to align price limits with actual market dynamics, a revised approach that integrates more comprehensive and representative financial data would ensure that pricing strategies are both fair and conducive to sustaining quality services in the sector.

Recommendation 2:

The NDIA should work with appropriate support providers and provider representative organisations to consider options for setting price limits for Disability Supports, including but not limited to development of a pricing approach. This should include exploration of methods to obtain objective financial information from service providers to inform potential approaches.

There is consideration by the NDIA for more immediate financial assistance options for providers of DSW-related supports. Analyses discussed in this chapter reveal substantial financial variability across the sector where both smaller organisations, heavily reliant on NDIS revenue, and larger entities report significant financial strain. This variability underscores the precarious financial positions of providers, suggesting a potential need for more immediate financial support to help sustain essential services critical to the well-being of NDIS participants.

Moreover, the complexity of assessing the financial health of charitable and not-for-profit NDIS providers, who serve across a range of sectors, complicates the financial picture. The sample analysed suggests many organisations may be investing in…

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Recommendation 3

The NDIA should explore options to provide immediate financial assistance to registered NDIS providers who deliver Disability Support Worker related supports. This initiative aims to alleviate immediate financial pressures for organisations that are experiencing significant financial distress. Working closely with the sector, the NDIA should define clear eligibility criteria, ensuring that support is targeted and effective for the intended cohort.

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. The loading was reduced on 1 July 2023 to 1% to continue to support transitional costs.

In light of recommendation 3’s more targeted approach to provide financial assistance for providers experiencing financial distress, the NDIA considers that it is appropriate to cease the loading effective 1 July 2024.

Recommendation 4

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, nor tied to the DSW Cost Model and are neither price limited nor benchmarked. Notably, nursing supports fall into this category, alongside other core

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and capacity-building supports like personal domestic cleaning and house or yard maintenance.48

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 5

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-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.

48 This does not include Plan Management supports.

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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

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

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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
A	8,778	-1,562	redacted: s47B - Commonwealth-State relations	redacted: s47C - Deliberative processes	redacted: s47D - Financial or property interests of the Commonwealth	7,392
B	C	D	E	F

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 total 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	$75M (18%)	$77M (23%)	$74M (25%)	$72M (28%)	$68M (31%)	$35M (35%)
Unregistered Provider	$0.9b (18%)	$0.9b (23%)	$0.9b (25%)	$0.9b (28%)	$0.9b (31%)	$0.9b (35%)
Registered Provider	$0.6b (75%)	$0.4b (77%)	$0.4b (74%)	$0.4b (72%)	$0.4b (68%)	$0.4b (65%)

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

Therapy Type	Amount
Counselling	$2.0b
Therapy Assistant	—
Exercise Physiology	$1.5 b
Other Professional	—
Psychology	$1.0b
Speech Pathology	—
Physiotherapy	$0.56b
Behavioural	—
Early Childhood	$0.0b
Occupational Therapy	—

January - July - January - July - January - July - Therapy June December dune December June December

2021 2021 2022 2022 2023 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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