Inquiry into the Integrity of the National Disability

Insurance Scheme

24 April 2026

Introduction 3

Part 1: The ATO’s engagement with the NDIS 3

Part 2: Responses to the Terms of Reference 4

Conclusion 6

Glossary 7

EXTERNAL 2

Introduction

The Australian Taxation Office (ATO) welcomes the opportunity to make a submission to the Joint Standing Committee into the integrity of the National Disability Insurance Scheme (NDIS).
To frame the ATO’s response in addressing the inquiry’s terms of reference, it is important to understand the background of the ATO’s engagement with the NDIS, which occurs as a result of our membership in the Fraud Fusion Taskforce (FFT).
To provide some initial context, the ATO is generally prohibited from sharing taxpayer related information.
Given the particular imperatives of the NDIS, there is an exception to this general rule through a ‘prescribed taskforce’, whereby the ATO is permitted to share information relevant to addressing fraud against the NDIS (but not in relation to general non-compliance by providers).
In order for the ATO to share data to address general non-compliance (below the level of fraud), there would need to be a policy decision and legislative change.
In practice, data matching is much more effective when there is high confidence as to the identity of those sought to be reviewed (eg suppliers), generally requiring the use of common identifiers. While the NDIS maintains its current structure, with a high proportion of unregistered suppliers, data matching with ATO data, even if permitted, may not be particularly effective.
It is also noted that there is not a direct relationship between meeting (or not meeting) tax obligations and compliance (or non-compliance) with the NDIS, and so the sharing of tax performance data will only ever be indicative not determinative, requiring strong data stewardship and data ethics to make sure it is used appropriately.

Part 1: The ATO’s engagement with the NDIS

More specifically, the ATO is one of 24 member agencies within the FFT, a ‘prescribed taskforce’ under Regulation 67 of the Taxation Administration Regulations 2017, which is led by the National Disability Insurance Agency (NDIA) and Services Australia.

As outlined in the FFT Memorandum of Understanding, the purpose of the FFT is to improve payment integrity in government programs and payments by preventing or reducing fraud and criminal activity within and against government programs (including serious and organised crime and systemic fraud), to:

  a.  protect the safety and wellbeing of participants who are at risk of harm as a result of fraud,
  and related service quality

 b.  protect public finances and prevent or reduce financial losses

  c.  ensure appropriate use of funds and the sustainability of the programs

 d.  improve community confidence in the administration of those payments and programs.

EXTERNAL 3

Under the FFT, the ATO received total funding of $11.1 million over four years (from 2022-23) to contribute to both strategic prevention objectives and the operational and intelligence objectives of FFT. The ATO’s role includes:

 a.  supporting the Taskforce’s intelligence and operational activity by proactively and reactively
   disclosing client-level protected tax data with FFT partner agencies, where there is a
  demonstrated nexus to alleged or proven fraud against government payment programs
   (GPP), in alignment with the taskforce purpose

b.  co-chairing the Taskforce’s Strategic Prevention Committee (SPC), with NDIA. The SPC
  oversees and directs the forward-looking strategic prevention strategy for the FFT including
   the delivery of the FFT Strategic Prevention Roadmap initiatives

 c.  undertaking pilots of strategic preventative measures.

The ATO is not funded to undertake compliance activity under the FFT. Generally speaking, the ATO does not undertake compliance action specific to instances of identified NDIA non-compliance, as the tax risks are often not as high as other tax risks that the Commissioner must manage with his limited resources. However, action may be undertaken where a significant tax risk presents.
It is important to note that the provision of information associated with tax compliance does not provide the broader system with a reliable view of NDIA non-compliance, as a service provider’s tax compliance is only one an element of a provider’s overall suitability. The ATO’s observation is that a service provider may be non-compliant with their tax obligations but compliant with other elements of suitability or, conversely, engage in fraud against the NDIA while remaining compliant with their tax obligations.

Part 2: Responses to the Terms of Reference

The nature and extent of non-compliance, including fraud

and sharp practices, in the NDIS

Non-compliance, fraud and sharp practices in the NDIS arise as a result of actors exploiting vulnerabilities associated with policy and system parameters associated with the NDIS. The ATO is aware of some research and analysis led by the NDIA and Attorney-General’s Department which identified vulnerabilities and associated risks, with a view to closing the gaps.
The ATO does not have visibility of the full nature and extent of non-compliance, fraud and sharp practices in the NDIS. However, we note that since commencement of the FFT, the ATO has made over 580 disclosures to FFT member agencies (including over 200 ATO-initiated and over 300 in response to agency requests) where there was sufficient nexus to fraud against GPPs to enable the disclosure. This includes approximately 300 disclosures to the NDIA. A further 30 requests did not progress due to not meeting disclosure requirements, or retraction by the requesting agency, and over 20 ATO disclosures were made outside of the FFT disclosure provisions prior to the ATO signing of the FFT Memorandum of Understanding which related to FFT-related risks.

EXTERNAL 4

Disclosure of ATO data and intelligence relevant to NDIS providers supported the NDIA to assess and/or address alleged fraud on the NDIS.
Since commencement of the FFT, the ATO has participated in a number of FFT strategic prevention initiatives aimed at piloting approaches to build fraud prevention capability across FFT member agencies, particularly the NDIA. It is through these initiatives that the ATO has gained further insights into non-compliance in the NDIS (as part of the broader FFT cohort).

For example, the ATO participated in an FFT NDIS Suitability Pilot, which was undertaken in response to the lack of standardised ‘fit and proper person’ tests across Government programs. This pilot aimed to test the viability of using data from multiple FFT member agencies to identify and risk flag potentially fraudulent NDIS providers, as part of suitability considerations.

 a.  The pilot cohort consisted of a small cohort of past or current registered NDIS providers who
 have been, or were the subject of, a current NDIA fraud investigation and/or compliance
    action. Under the pilot, the ATO disclosed aggregated and de-identified analysis on over 100
    entities based on the ATO’s Statement of Tax Record (STR) criteria.
b.  Based on 2024-25 data, less than 5% of NDIS providers are registered with the NDIS Quality
 and Safeguards Commission (NQSC) compared to over 95% which are unregistered NDIS
   providers.
 c.  The analysis found that 70% of the individuals and 79% of the business entities in the pilot
   cohort would have received an unsatisfactory STR at the time of analysis, noting that
 engagement with the tax system does not directly correlate to a provider’s compliance with a
 government payment program.
d.  Furthermore, although a service provider’s engagement with the tax system, as represented
 by a satisfactory STR, may be an appropriate ‘fit and proper person’ criterion amongst other
     suitability criteria, policy and law reform would be required to implement standardised
     suitability criteria for service providers across various government programs.

Separate to the FFT, the ATO is leading the Government Payments Program, which aims to collect GPP data from participating agencies, including the NDIA, and use it to support GPP service providers to meet their tax obligations. In relation to NDIA payments:

 a.  Data is collected at the contracted service provider level and there is often insufficient
   information in relation to unregistered providers, which limits our ability to match their data.
 As a result, for the 2024-25 financial year, only 3% of GPP data on NDIS providers (mainly
   registered NDIS providers) could be matched with high confidence to ATO systems. Hardly
 any unregistered NDIS providers could be matched with high confidence to ATO systems
 due to lack of identifier information collected and verified on unregistered providers.
b.  For the 2024-25 financial year, ATO analysis based on the STR criteria indicated that 25% of
   the high-confidence matched NDIS providers (the 3% mentioned above) would have
   received an unsatisfactory STR at the time of analysis. It is important to note that due to the
  matching limitations, this analysis is not representative of the whole NDIS provider
   population.

EXTERNAL 5

The impacts of non-compliance on NDIS participants and

their families

The ATO is unable to comment on the impact of non-compliance on NDIS participants and their families.

The effectiveness and adequacy of successive government

policies to improve scheme integrity, safeguard participants, and tackle non-compliance

The ATO is unable to comment on the effectiveness and adequacy of successive government policies to improve scheme integrity, safeguard participants and tackle non-compliance. However, based on our understanding of the program, the Fraud Fusion Taskforce has contributed to improved scheme integrity.

Any legislative or other reforms required to strengthen

scheme integrity

The ATO is unable to comment on other legislative reforms required to strengthen scheme integrity of the NDIS.
However, the ATO acknowledges that the outcomes of the Treasury’s Review of Tax Regulator Secrecy Exceptions may result in law reform which permits the ATO to disclose protected tax information to the NDIA and the NQSC for the purposes of administering the National Disability and Insurance Scheme Act 2013.
The ATO recognises that where it is legal, ethical, and appropriate to do so, the use of tax data for compliance purposes may be useful in addressing some (but not all) types of non-compliance in the NDIS, although to what extent is unknown.
Questions of whether it is ethical and fit for purpose to share, and whether the data will be used responsibly by the receiving agency, are critical factors the ATO must consider before any disclosure.

Conclusion

The ATO is available to respond to any questions the Committee may have and will attend the hearing as required.
The ATO looks forward to the outcomes of this inquiry.

EXTERNAL 6

Integrity of the National Disability Insurance SSCS

OFFICIAL ATO Submission

Glossary

FFT: Fraud Fusion Taskforce
GPP: Government Payment Program
SPC: Strategic Prevention Committee
STR: Statement of Tax Record
TAA: Taxation Administration Act 1953

ATO engagement with NDIS fraud and data sharing