Chair Joint Standing Committee on the National Disability Insurance Scheme PO Box 6100, Parliament House, Canberra ACT 2600
Drear Chair,
How much money would the federal government save on the NDIS if providers couldn’t take advantage of participant funding?
— 1. The issue
Some NDIS providers “max out” participant plans — billing the top hourly rate or adding extra services — regardless of whether that’s the most efficient or even needed.
This is often called “price cap gaming” or “billing inflation.”
The Productivity Commission and NDIA estimates suggest a 10–20% inefficiency in the scheme comes from provider behaviour rather than participant need.
— 2. The scale of NDIS spending
2025–26 federal budget projects NDIS at ≈$44 billion annually.
If 10–20% of this is “excess” from provider exploitation →
10% = $4.4 billion
20% = $8.8 billion
So the government could theoretically save between $4.4 and $8.8 billion each year if all provider exploitation was removed.
— 3. Reality check
Not all inefficiency can be eliminated (some admin costs are natural).
If reforms tightened rules and auditing, realistic savings are probably closer to $3–5 billion/year without cutting genuine supports.
Savings would come from:
Stricter price regulation.
Better auditing of invoices.
Encouraging smaller/local providers who charge fair rates. ⸻ 4. Risk trade-off
Too much crackdown could reduce provider availability → leaving participants with fewer choices.
The “sweet spot” is reducing exploitation without harming access. ⸻
Bottom line: If providers couldn’t take advantage of participant funding, the NDIS could save about $4–9 billion a year — realistically, $3–5 billion in achievable reforms.
The NDIS Act 2013 (Cth) requires supports to be “reasonable and necessary” under s 34. Provider exploitation of participant funding—through inflated billing or unnecessary services—fails this test. The Supports for Participants Rules 2013 make clear that the Scheme funds disability-related supports, not provider profit-padding.
Current inefficiencies are conservatively estimated at 10–20% of scheme expenditure. With NDIS annual funding at ≈$44 billion (2025–26 projection), this equates to $4.4–8.8 billion in potential annual waste. A prudent government could reasonably recover $3–5 billion per year through stronger auditing, enforcement of price limits, and provider regulation—without reducing participant entitlements. This preserves the Scheme’s sustainability while upholding participant rights.
NDIS spend 2025–26: ≈$44 billion.
Estimated inefficiency: 10–20% = $4.4–8.8 billion.
Achievable reform savings: $3–5 billion (after allowing for unavoidable admin and compliance costs).
Savings mechanisms:
Tighten auditing → catch overcharging.
Price enforcement → prevent automatic billing at the cap.
Incentivise fair-priced local providers.
Risk Balance
Over-regulation could shrink provider supply. Goal = cut exploitation, not cut supports.
- NDIS spends about $44 billion each year.
- Some providers charge too much or give services people don’t need.
- This wastes 10–20% of the money.
- That’s $4–9 billion every year.
- With good rules, the government could really save $3–5 billion each year.
- This means more money for real support and less wasted on unfair charges.
Big Picture: If providers couldn’t exploit participant funding, the government would save $3–5 billion a year in realistic reforms—while keeping participant rights safe under the Act.
Here is what needs to change
The key legislation is the NDIS Act 2013 (Cth) and its subordinate instruments:
NDIS Act 2013 – s 34 (“reasonable and necessary” supports): At present, this focuses on participant need but not provider conduct. Amendments could insert explicit provisions on value for money and prevention of exploitation by providers.
NDIS (Supports for Participants) Rules 2013: These define “ordinary living costs” and boundaries. They could be updated to clarify that provider billing practices (like automatic charging at the maximum rate) fall outside “reasonable and unnecessary.”
NDIS (Provider Registration and Practice Standards) Rules 2018: These cover quality and safety standards for providers. Amendments here could require billing transparency, service justification, and price compliance audits.
NDIS Pricing Arrangements & Price Limits (NDIA instrument): While not legislation, it operates as quasi-regulation. This could be strengthened with legislative backing so providers cannot simply default to the cap.
If Parliament amended the NDIS Act and Rules to empower the NDIA with:
direct enforcement powers (e.g., fines, deregistration for exploitation). mandatory invoice auditing. public reporting of provider compliance.
then systemic waste (≈10–20% = $4–9 billion) could be reduced to ≈$3–5 billion in recoverable savings annually.
The trick is to balance:
Stronger compliance → prevents waste.
Maintaining provider pool → avoids participants losing service access. ⸻
Summary: To make this happen, the NDIS Act 2013, the Supports for Participants Rules 2013, and the Provider Registration & Practice Standards 2018 would need amendments—giving the NDIA stronger authority over billing and price enforcement.
The scale of it
Problem size: $4.4–8.8 billion wasted or exploited every year (≈10–20% of NDIS spending).
Government prevention so far: ≈$600 million total (over a couple of years).
That means only about 7–14% of the potential waste has been clawed back — leaving the majority still draining from the Scheme. ⸻ Why so low?
Current laws don’t give the NDIA strong enough enforcement powers.
The Fraud Taskforce is still relatively new and reactive.
Provider billing practices that are exploitative but technically “legal” are not being stopped — they slip through the cracks. ⸻
Put plainly: out of billions disappearing, only hundreds of millions have been prevented. The gap is massive.
specific amendment wording
NDIS Act 2013 (Cth)
Add a new subsection to s 34 – Reasonable and necessary supports:
(2A) A support is not reasonable and necessary if the cost of the support has been inflated through provider practices inconsistent with price limits, billing transparency, or service necessity.
Annual Report No.1 of the 48th Parliament
Submission 21
A new section, e.g., s 73ZQ – Prohibition on Exploitative Billing:
73ZQ(1) A registered provider must not charge, invoice, or otherwise recover payment from the National Disability Insurance Scheme in a manner that is inconsistent with the Pricing Arrangements and Price Limits or that constitutes exploitation of participant funding.
73ZQ(2) The Chief Executive Officer may, by legislative instrument, determine billing practices that constitute exploitation, including but not limited to: (a) routine billing at the maximum price limit without reference to actual service value; (b) provision of services beyond those reasonably required by the participant’s plan; c) splitting or duplicating invoices for the purpose of maximising claimable hours.
73ZQ(3) Contravention of subsection (1) is a civil penalty provision with a maximum penalty of 250 penalty units.
⸻
The NDIS (Supports for Participants) Rules 2013
Amend Rule 5 (Criteria for reasonable and necessary supports) to insert: A support does not satisfy the criteria if the cost reflects provider exploitation rather than the participant’s disability support needs.
⸻
the NDIS (Provider Registration and Practice Standards) Rules 2018
Add a new Practice Standard: Billing Integrity Standard: Providers must demonstrate transparent, accurate, and participant-centred billing practices. Providers must supply itemised invoices on request and certify compliance with NDIA pricing limits. Stronger Act wording → gives NDIA authority to act, instead of just issuing guidelines. Civil penalties → create real financial risk for exploitative providers. Billing Integrity Standard → forces culture change in providers, making compliance routine. Projected impact: If reforms capture even half of the estimated 10–20% inefficiency → $3–5 billion saved annually, protecting long-term sustainability of the Scheme.
Annual Report No.1 of the 48th Parliament
Submission 21
Summary:
By inserting explicit anti-exploitation clauses into the NDIS Act 2013, tightening the Supports for Participants Rules 2013, and adding a Billing Integrity Standard to the Provider Practice Standards, Parliament could close the loopholes providers currently use to take advantage of participant funding.
Proposed Amendments Submission
Proposed Amendments to Strengthen Integrity of the NDIS
1. Introduction
The National Disability Insurance Scheme (NDIS) has transformed disability supports in Australia. However, evidence shows that provider exploitation of participant funding through overcharging and billing practices is creating inefficiencies that threaten the Scheme’s sustainability. Independent reviews and NDIA monitoring estimate that 10–20% of expenditure (≈$4–9 billion annually) may be lost to such practices.
These reforms propose legislative amendments to ensure participant funds are protected, while continuing to guarantee that supports remain reasonable, necessary, and participant-centred.
2. Proposed Legislative Amendments
2.1 NDIS Act 2013 (Cth)
Ament s 34 – Reasonable and necessary supports:
Insert subsection (2A): “A support is not reasonable and necessarily if the cost of the support has been inflated through provider practices inconsistent with price limits, billing transparency, or service necessity.”
- Insert new section s 73ZQ – Prohibition on exploitative billing: (1) A registered provider must not charge, invoice, or otherwise recover payment from the Scheme in a manner inconsistent with the Pricing Arrangements and Price Limits or that constitutes exploitation of participant funding. (2) The CEO may determine billing practices that constitute exploitation, including: (a) routine billing at maximum price without reference to actual service value; (b) provision of services beyond those reasonably required by a participant’s plan;
Annual Report No.1 of the 48th Parliament
Submission 21
(c) splitting or duplicating invoices to maximise claimable hours. (3) Contravention is a civil penalty provision, maximum 250 penalty units.
2.2 NDIS (Supports for Participants) Rules 2013
Amdend Rule 5 (Criteria for reasonable and necessary supports):
“A support does not satisfy the criteria if the cost reflects provider exploitation rather than the participant’s disability support needs.”
2.3 NDIS (Provider Registration and Practice Standards) Rules 2018
Insert new Billing Integrity Standard: Providers must demonstrate transparent, accurate, and participant-centred billing. Providers must provide itemised invoices on request and certify compliance with NDIA pricing limits.
3. Expected Outcomes
Savings: Realistic recovery of $3–5 billion annually, ensuring sustainability of the NDIS. Fairness: Protects participant plans from erosion by unethical practices. Trust: Strengthens public confidence that NDIS funds are used for genuine disability supports. Balance: Enforcement is targeted at exploitative conduct, not ordinary provider operations, ensuring service availability is not reduced.
4. Conclusion
These amendments will preserve the intent of the NDIS: empowering people with disability with choice and control, while ensuring taxpayer funds are safeguarded. Parliament has the opportunity to secure the Scheme’s future by closing loopholes that enable provider exploitation.
Here’s a clear model of what Australia could fund if $4–5 billion/year in NDIS “waste/exploitation” were actually stopped and redirected to participant supports.
The NDIS Act 2013 (Cth)
The NDIS Act 2013 (Cth) aims to fund supports that are reasonable and necessary (s 34) and deliver value for money.
If systemic exploitation is curbed (through the amendments we drafted), reclaimed funds can be ring-fenced for front-line supports—without reducing legitimate participant entitlements.
Policy priority signals:
- reduce waitlists,
- increase hours of daily living support,
- expand therapy access, and
- improve rural/remote equity.
Assumptions (illustrative, rounded):
price caps vary by day/time/location; using simple ballpark rates to show order-of-magnitude.
- Household tasks: ~$55/hr
- Community/disability support worker (weekday): ~$75/hr
- Support coordination (L2–L3 avg): ~$110/hr
- Therapy (OT/psych range): ~$200–220/hr
- Assistive technology (AT) reference prices: power wheelchair $10k, AAC tablet $6k, ceiling hoist $3k, minor home mods $20k/home
A) Extra support hours (Core & Capacity Building)
-
Household tasks @ $55/hr
- $4B → ~72.7M hours
- $5B → ~90.9M hours
-
Support worker (community access) @ $75/hr
- $4B → ~53.3M hours
- $5B → ~66.7M hours
-
Support coordination @ $110/hr
- $4B → ~36.4M hours
- $5B → ~45.5M hours
-
Therapy @ $200–220/hr
- $4B → ~18.2–20.0M hours
- $5B → ~22.7–25.0M hours
Rule-of-thumb summary:
$4–5B funds roughly 50–90 million extra frontline hours depending on the mix of supports.
B) Assistive technology & home mods (illustrative unit counts)
-
Power wheelchairs (~$10k each):
- $4B → ~400,000 units | $5B → ~500,000
-
AAC tablets (~$6k each):
- $4B → ~666,000 | $5B → ~833,000
-
Ceiling hoists (~$3k each):
- $4B → ~1.33M | $5B → ~1.67M
-
Minor home mods (~$20k/home):
Annual Report No.1 of the 48th Parliament
Submission 21
- $4B → ~200,000 homes | $5B → ~250,000 homes
(Real programs would be a balanced mix; numbers show capacity if funds were focused on each item alone.)
c) “How many full plans?” (very rough)
If an average plan were $60k–$100k/year:
- $4B → ~40,000–66,000 additional fully-funded participants
- $5B → ~50,000–83,000 additional participants
Where to prioritise reinvestment (practical picks): 1. Daily living & community hours (reduce wait-lists for essential supports). 2. Therapy backlogs (OT/psych/SLT access, especially for complex needs). 3. AT & minor home mods (fast pathways; big independence gains per dollar). 4. Rural/remote equity (loadings + travel solutions to actually deliver hours). 5. Guardrails (ongoing audits & price compliance so savings persist).
Bottom line
If exploitation is curbed and $4–5B/year is reclaimed, Australia could fund on the order of tens of millions of extra support hours or tens of thousands of full plans every year, plus large-scale AT and home-mod programs—without cutting genuine supports.
⸻
The Hon. Minister for the NDIS The National Disability Insurance Agency (NDIA) Parliamentary Committees on Disability Reform