Market Viability and Provider Registration Challenges in the NDIS | External submission

Endeavour Foundation’s Submission to the Joint Standing Committee on the NDIS – Inquiry into Scheme Integrity

Introduction Endeavour Foundation is an independent, not-for-profit organisation established in 1951 and now one of Australia’s largest disability service providers. We specialise in supporting people with intellectual disability across home, community, and employment settings. Endeavour currently supports over 6,500 people nationwide – including more than 500 people in supported independent living, 890 people in community access and learning programs, and 1,710 people with intellectual disability employed across our 28 social enterprises and host employer sites. This makes Endeavour Foundation Australia’s largest employer of people with intellectual disability, accounting for over 10% of all supported employees nationally. We have a unique, on-the-ground perspective on NDIS scheme integrity challenges, as we operate in regional communities, and have firsthand experience with the financial and regulatory pressures confronting quality providers.

This submission addresses the two main issues that we believe are critical to the integrity and sustainability of the National Disability Insurance Scheme (NDIS) – issues we have consistently highlighted in our recent policy submissions, position papers and parliamentary briefings. These are:

Market viability and NDIS pricing;
Provider registration, regulation and safeguards; and
Market Viability and NDIS Pricing: Addressing Market Failure to Protect Participants

The Policy Problem: Under-pricing and cost pressures in the NDIS are leading to sector-wide financial instability, service gaps, and the risk of market failure, undermining the scheme’s integrity. The NDIS pricing framework – in which the National Disability Insurance Agency (NDIA) sets fixed price caps for services – has not kept pace with the real cost of delivering disability supports. For several years, providers have faced rising wage awards, inflation in operating costs, and growing compliance obligations without commensurate price adjustments. As a result, many disability service organisations (especially those delivering complex supports or operating in regional areas) are now running at significant losses. This is not sustainable.

Recent sector-wide data from National Disability Services (NDS) shows that 81% of disability providers are concerned they cannot continue to deliver NDIS services at current prices, and 72% feel there is inadequate advocacy for the people they support. Multiple well-established providers – for example MS Society SA/NT, Annecto, Anglicare WA and Tasmania, Centacare Brisbane, Cocoon, Bedford, Avivo, and Scope – have already closed services or gone public about financial distress under NDIS pricing constraints. These failures are not isolated incidents but signs of systemic strain.

Endeavour Foundation’s experience reinforces this picture. We have recorded very significant deficits for five consecutive years due to unsustainable. We have exhausted reserves and cross-subsidies (e.g. drawing on charitable fundraising, selling assets) to prop up NDIS services. Without these stopgaps, our losses would be even greater. We now face painful choices to reduce services.

Integrity Risks and Impact on Participants: The integrity of the NDIS relies on participants being able to access quality supports when and where they need them. The current pricing model’s “one-size-fits-all” rates are driving market failure in parts of the sector. In economic terms, under-pricing essential supports has created perverse incentives and unintended consequences: quality providers that invest in training, safety, and complex care are financially penalised (often running deficits), while lower-cost or unscrupulous operators can profit by skimping on quality.

This dynamic undermines scheme integrity in multiple ways:

(a) Service availability and continuity are threatened as reputable organisations shrink or exit – indeed, one survey found 80% of providers may discontinue some or all services without pricing reform. Each closure or withdrawal leaves participants without critical supports, eroding their trust that NDIS funding guarantees real support on the ground. Endeavour Foundation itself has often stepped in to support participants when other providers collapsed, only to find those participants’ plans did not even cover the true cost of safe support – an alarming indication that some participants have been unknowingly under- supported. (b) Quality and safeguards can be compromised when providers operate on razor-thin margins. Providers under financial strain may be forced to reduce staff training, supervision, or service innovation. Less scrupulous businesses are engaging in “sharp practices” – e.g. delivering only easier, low-cost services or cutting corners on quality – in order to survive financially. This not only harms participant outcomes but also feeds negative public perceptions about rorting or poor standards, thus damaging confidence in the scheme. (c) Participant choice and equity suffer. In thin markets (such as remote areas or highly specialised supports), the collapse of providers means participants effectively have no choice of services – a direct failure of the NDIS’s

insurance principles. Even in more populated areas, under current prices many providers avoid clients with higher support needs (whom they lose money to serve), leaving the most vulnerable participants with fewer options. As one peak body leader observed, “the wrong providers are thriving… the ones doing complex work are under financial pressure, while low-quality providers who cut costs are profiting”. This inequitable outcome is contrary to the NDIS’s goal of reasonably necessary supports for all, regardless of complexity or geography.

Case Example: Pricing-driven Service Gaps. A key example is in therapeutic supports. Therapy providers faced a five-year freeze on NDIS price adjustments, despite wages rising over 17% in that period. Consequently, many registered therapy providers – unable to cover costs – have curtailed services or stopped taking NDIS clients, leading to long wait lists and even complete withdrawal of services in some regions. Participants with complex needs, especially in regional areas, struggle to access essential therapies, undermining their outcomes and the value of their NDIS plans. This illustrates how inflexible, below-cost pricing can hollow out an entire support category, threatening both participant wellbeing and public faith in the Scheme’s effectiveness.

Recommended Reforms: Endeavour Foundation strongly supports the urgent implementation of NDIS pricing reforms to ensure financial sustainability and value for money, as recommended by the 2023 NDIS Review and consistently advocated by peak bodies like NDS and Alliance20. Key recommended actions:

Recommendation 1. Establish an Independent Pricing Authority for the NDIS. Decouple price-setting from the NDIA’s cost-containment objectives by creating an independent pricing body or allocating pricing policy to the Independent Hospital and Aged Care Pricing Authority (IHACPA)). An independent pricing authority would depoliticise pricing decisions and base them on real market data and actual service delivery costs. This mirrors best practice in health and aged care and would strengthen scheme integrity by balancing participant needs with provider viability in an open, evidence-based manner.

Recommendation 2. Implement Differential Pricing that Rewards Quality and Complexity. The pricing model must move away from uniform rates that ignore complexity and quality. We recommend an immediate price loading (increase) for providers who meet higher quality and safeguarding standards (i.e. registered, audited providers), particularly for delivering complex or high-intensity supports. As a starting point, Endeavour’s submission to the current NDIS Pricing Review proposes a 5% price uplift for registered providers to reflect the additional costs of quality supervision,

staff training, safety, and compliance – none of which is funded under current prices. At the same time, prices for basic supports delivered by sole traders and other low- overhead providers could be moderately reduced (e.g. by 20–25%) in line with the lower cost of these services.

Recommendation 3. Reflect the True Cost of Service Delivery in Price Caps. We urge the NDIA/pricing authority to rectify areas of clear under-valuation: for example, high-support needs and complex care (which require higher staffing ratios, training, and supervision) should attract higher price tiers or support item flexibility; remote and regional loadings should be updated to reflect the substantially greater cost of service delivery in non-metro areas (many such areas are not classified ‘remote’ under current rules and thus get no adequate loading); and critical support categories that have seen long price stagnation (e.g. therapy, complex support, support coordination, employment supports) must be adjusted. The Disability Support Worker Cost Model underlying many price limits is outdated and must be updated or replaced.

Recommendation 4. Ensure Timely and Transparent Price-Setting Processes. Unpredictability in annual price updates and late notice of pricing changes also threaten integrity – providers have faced very late price announcements and uncertainty that hamper business planning and risk management. The NDIA should adopt a more transparent, consultative annual pricing cycle with clear advance notice of price changes, allowing providers to plan budgets and roster staffing appropriately.

By implementing these pricing and market stewardship reforms, the government will protect scheme integrity in two vital ways: first, by stabilising the provider market so participants can count on continuity and quality of supports; and second, by incentivising safe, ethical practice, since providers will no longer be forced to choose between financial survival and delivering high-quality support. In short, sustainable Pricing is a prerequisite for a sustainable NDIS.

Provider Registration, Regulation and Safeguards: Closing Regulatory Gaps to Uphold Quality

The Policy Problem: The NDIS currently has a two-tier provider market – registered vs unregistered providers – which creates serious gaps in safeguards and financial oversight, enabling unethical conduct and fraud to proliferate and placing participants at risk. Under NDIS rules, only providers directly paid by the NDIA (for Agency- managed participants) must be registered with the NDIS Quality and Safeguards

Commission, meeting its standards for quality, safety, staff screening, audits, and reporting. But participants who self-manage or use plan managers can (often unknowingly) engage unregistered providers, who are exempt from NDIS Commission oversight.

This loophole means the vast majority of providers by number have no regulatory supervision: as of late 2025, 94% of active NDIS providers were unregistered (a figure consistent with other reports that only ~6–7% of the 250,000+ providers have bothered to pursue registration). These include thousands of sole traders and small businesses (e.g. support workers, therapists, even mainstream retailers selling NDIS-funded products) that operate entirely outside the established quality framework. While many of these unregistered providers are well-intentioned, the current system allows “blind spots” where ‘sharp practices’ and outright fraud can occur with little detection. The NDIS Commission has limited visibility of services delivered by unregistered operators, and even proposed new compliance tools will be of limited effect if they apply only to registered providers. This regulatory disparity creates an uneven playing field and exposes participants to unethical actors who exploit the scheme’s trust-based approach.

Integrity Risks and Participant Impact: The consequences of this regulatory gap are directly relevant to the Committee’s terms of reference on non-compliance, fraud, and safeguarding. Unscrupulous providers can and do exploit the “unregistered” route to engage in unethical or fraudulent behavior with impunity, undermining the integrity of the NDIS. For example: financial misuses and fraud are easier when providers operate outside the Commission’s purview – from overcharging or over- servicing participants (billing for unnecessary supports) to straightforward fraud such as invoicing for “ghost” services.

The absence of mandatory audit or reporting for unregistered entities means such practices often go unnoticed until significant funds have been lost. In 2022–23, NDIS fraud investigations revealed several rings of unregistered providers defrauding the scheme of millions of dollars – in one case, using provider registration loopholes to bill for fake therapy sessions. Endeavour Foundation’s own frontline experience corroborates this – families have recounted instances of care being delivered by unqualified workers found on social media platforms, with detrimental results (e.g. misuse of funds on non-therapeutic activities, or neglect of basic care plans).

Such unmonitored services also pose risks of abuse, neglect, or exploitation, directly contravening the NDIS objective to “deliver high-quality supports and safeguards”. Moreover, responsible providers who do follow the rules feel unfairly burdened. As noted in an NDS submission, “At times it feels like we are being punished for being compliant…there is focus on providers who do the right thing (and report) instead of those who purposefully avoid reporting to the Commission.”.

In short, uneven regulation undermines both fairness and safety: it creates incentives to stay outside the system, while bad actors thrive in the shadows, tarnishing the scheme’s reputation.

Recommended Reforms: To enhance scheme integrity and participant safety, we recommend a set of complementary measures to achieve universal or near-universal coverage of NDIS provider safeguards, in line with proposals from the NDIS Review (2023) and widely supported by sector leaders. Key actions include:

Recommendation 5. Implement Universal Provider Registration. We urge the Government to adopt the NDIS Review’s recommendation for a graduated, risk-proportionate provider registration model such that all providers come under the NDIS Commission’s jurisdiction. In practice, this means even sole traders and small operators would need at least a “baseline” registration, while higher-risk services (e.g. personal care, supported living, behavior support) face more rigorous requirements (e.g. accreditation, audits, clinical governance). A tiered approach can minimize burden on micro-providers yet still extend fundamental safeguards to every participant. Importantly, the aim is not to drive good providers out of the market, but to bring all providers into the fold of oversight appropriate to the services they deliver. This will reduce the current incentive to remain unregistered and make it harder for disreputable actors to hide.

Recommendation 6. Apply Compliance and Enforcement Powers Equally Across Registered and Unregistered Providers. As an immediate step while universal registration is implemented, any new integrity measures should explicitly cover unregistered providers whenever possible. For example, if an unregistered provider engages in fraud or serious abuse, they should face the same penalties and banning orders as a registered provider would. This principle of regulatory “parity” is essential to avoid perversely incentivising providers to stay outside the system.

In summary, the NDIS must operate under a single high standard for quality and safety – a standard that applies to all who benefit from NDIS funding. The current divide between registered and unregistered providers is undermining scheme integrity by allowing a sizeable “shadow” market with insufficient oversight. A concerted effort to bring all providers into the regulated environment (proportionate to their size and risk) will greatly enhance fraud control, improve service quality, and protect participants’ rights, thereby shoring up public trust in the NDIS.

Conclusion

In closing, Endeavour Foundation appreciates the opportunity to contribute to this important inquiry. We have highlighted how financial sustainability and regulatory parity are essential to the integrity of the NDIS. These issues are deeply interrelated: adequate pricing and strong, fair regulation are what enable participants to access safe, quality services. We believe our recommendations align closely with those of our peers across the sector – including calls for an independent pricing authority, risk-based universal provider regulation, and an improved funding model for high- need supports – indicating a broad consensus for reform.

Endeavour Foundation stands ready to work constructively with the Commonwealth on these reforms. Ultimately, scheme integrity is not just about preventing fraud and non-compliance – it is about ensuring the NDIS delivers real, reliable outcomes for participants in a sustainable way. The above recommendations seek to fortify that integrity by shoring up the foundations: a robust provider market, consistent quality safeguards, and preservation of critical supports. We urge the Committee to consider these measures as practical steps toward an NDIS that participants, providers, and the public can continue to trust for the long term.

Contact:

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