Submission to the Inquiry into the Integrity of the National

             Disability Insurance Scheme

                                   April 2026

Acknowledgement of Country

VMIAC recognises Aboriginal and Torres Strait Islander peoples as the First Peoples of this continent and the Islands of the Torres Strait. In doing so, we acknowledge our shared history, recognise the right to self-determination and the importance of connection and access to Country.

VMIAC works across Victoria and acknowledges the Traditional Custodians of the lands and waters on which we are privileged to work and live. We acknowledge and respect distinct Aboriginal and Torres Strait Islander cultural differences, beliefs, values, and languages.

We acknowledge that this land was never ceded and pay our respects to Elders past and present.

About VMIAC

VMIAC is the peak body run by, and for, Victorian mental health consumers. By mental health consumers, VMIAC means people with lived experience of mental health challenges, trauma, or emotional distress, who may have accessed mental health or related services to support their wellbeing.

Our vision is a world where all consumers stand proud, live a life with their choices honoured and their rights upheld, and where these principles are embedded in all aspects of society.

VMIAC support extends state-wide across metro, rural and regional communities. We provide individual and systemic advocacy to consumers with psychosocial disabilities, using a rights-based approach, to ensure their rights and freedoms are exercised.

Acknowledgement of Country ……………………………………………………………………………………………….1 About VMIAC……………………………………………………………………………………………………………………….1 Executive Summary………………………………………………………………………………………………………………2 Recommendations ……………………………………………………………………………………………………………….2 Introduction ………………………………………………………………………………………………………………………..3 Impact of non-compliance on participants and families…………………………………………………………….3 Current policies and regulatory frameworks ……………………………………………………………………… 3 Barriers to reporting and addressing non-compliance………………………………………………………. 4 Supporting participants…………………………………………………………………………………………………………4 Structural drivers of non-compliance………………………………………………………………………………………4 System reform……………………………………………………………………………………………………………………..5 Conclusion……………………………………………………………………………………………………………….. 5

Executive Summary

Non-compliance is an inevitable outcome of the current structure of the NDIS. The NDIS is structured as a market, and participants are positioned as consumers expected to navigate that market. This market-based approach assumes a degree of power, information, and safety that frequently does not exist, especially for those with psychosocial disability. Accordingly, exploitation in the NDIS is not an outlier, rather a predictable systemic risk.

Attempts to strengthen the NDIS’ integrity have primarily focused on tightening rules and compliance mechanisms, whilst leaving the underlying model intact. This has resulted in increasing administrative burden without improvement in participant safety and outcomes. Meanwhile, regulatory bodies remain under-resourced, participants often carry burden of enforcement through complaints processes, and the workforce delivering supports is increasingly precarious.

Addressing the integrity of the NDIS will require more than tightening compliance settings and increasing regulatory burden. It requires examination of the structural conditions that allow harm to occur, including the marketisation of care, the erosion of public services, and the transfer of risk onto participants themselves.

Recommendations

VMIAC calls on the Australian Government to move beyond incremental reforms and to instead address the structural drivers of non-compliance within the NDIS. This requires:

1.  Significant reinvestment in the public capacity of the NDIS. Including a properly resourced
   NDIS Quality and Safeguards Commission that has the capacity to act proactively rather than
    relying on participant complaints to prompt compliance action.
2.  Shifting to proactive regulation. This must include routine monitoring, follow-up on
    directions to providers, and meaningful enforcement mechanisms in cases of non-
   compliance.
3.  Rebalancing power within the NDIS by:
         a.  Expanding access to independent advocacy;
        b.  Strengthening supported decision-making frameworks; and
          c.  Ensuring participants are not required to navigate risk alone.
4.  Properly resourcing Local Area Coordination. So that participants receive ongoing, practical
   support to understand their plans, identify poor practice, and transition between providers
  where needed.
5.  Reforming the provider registration system. Reduce unnecessary administrative burden on
    small, community-based providers, whilst maintaining strong safeguards against harm.
6.  Addressing the growing dominance of large, for-profit providers. Invest in publicly delivered
   supports to provide a stable, high-quality baseline of care.
7.  Improving workforce conditions across the NDIS. This must include pay, training, and job
     security, recognising that insecure work is a key driver of poor practice and non-compliance.

Introduction

VMIAC welcomes the Australian Government’s commitment to addressing the integrity of the NDIS. Nevertheless, we emphasise that, from the perspective of mental health consumers with psychosocial disability, integrity cannot be understood purely as the absence of fraud and sharp practices. A system can be technically compliant while continuing to produce widespread harm. A system with genuine integrity must be measured by whether participants are safe, supported, and afforded genuine self-determination.

The National Disability Insurance Scheme (NDIS) was established on the foundational promise of choice and control for participants. However, for many participants, especially those with psychosocial disability, this promise remains unfulfilled.

Participants with psychosocial disabilities regularly face barriers to navigating complex NDIS systems, including experiences of trauma that impact engagement with services; power imbalances with providers; and limited access to navigation support and independent advocacy.

Despite this, the NDIS makes the often-inaccurate assumption that participants can act as informed and empowered consumers in a complex market.

A system that relies on individuals to identify, report, and exit from unsafe or exploitative services without adequate supports, creates the conditions for non-compliance to flourish. Consequently, it is therefore unsurprising that fraud and non-compliance are widespread throughout the NDIS, driving significant cost blow-outs and undermining the Scheme’s long-term sustainability.

Impact of non-compliance on participants and families

For participants with psychosocial disability, non-compliance has consequences far beyond financial loss. Inadequate or unsafe services often cause psychological distress and may reinforce experiences of interpersonal harm, mistrust, and marginalisation.

VMIAC consumers often report feeling trapped within service arrangements that are not working for them. Participants are sometimes unsure of their rights, fearful of losing supports, or too overwhelmed to navigate the process of changing providers. Additionally, in many instances, there are explicit or implicit pressures to remain with providers, including the withholding of information or the creation of administrative barriers.

Families and other informal supports often attempt to intervene; however, this shifts the burden of system failure onto individuals and their networks. These experiences not only erode confidence in particular providers but also erode community confidence in the NDIS and government. The deteriorating reputation of the NDIS also unfairly impacts participants, who may be stigmatised as beneficiaries of a system perceived to be rorted.

Current policies and regulatory frameworks

The current regulatory framework is heavily reliant on complaints as a primary mechanism for identifying and addressing non-compliance. This model assumes that participants are able and willing to engage with formal dispute resolution processes, despite many clear cases to the contrary.

Notably, the NDIS Quality and Safeguards Commission is operating under significant pressure. Reports of complaint management delays, limited follow up, and poor communication with

complainants are widespread. Comcare notices and reporting from staff wellbeing surveys also indicate that staff themselves are working in conditions characterised by unsustainable workloads and burnout, raising concerns about the sustainability of the current model.

Consequently, the current system allows harm to persist for extended periods without effective intervention. Strengthening integrity cannot be achieved solely by increasing expectations on participants or providers; it requires investment in the public institutions responsible for NDIS oversight and a shift towards proactive regulation.

Barriers to reporting and addressing non-compliance

Expecting participants to report non-compliance overlooks the many barriers they face to do so. These include limited access to accessible information about processes, fear of negative consequences, and the emotional and cognitive demands of engagement with complaints processes.

Significant systemic barriers prevent early identification of risk. Local Area Coordinators (LACs) and other frontline staff may be aware of concerning practices but are constrained in their ability to act or to warn participants. The absence of transparent, easily accessible, publicly available data on provider performance further limits participants’ ability to make informed choices about their care.

These gaps create and sustain an environment where non-compliance can continue largely unchecked, with participants assuming the consequences.

Supporting participants

The NDIS was founded with a core principle of choice and control for participants, however, in practice, this language is regularly used to justify withdrawing supports. Participants are often expected to navigate NDIS systems independently, or with limited independent support, despite clear evidence that many people require ongoing assistance to do so safely.

In theory, LACs are well placed to provide this support, however, due to chronic under-resourcing, their effectiveness has been severely limited. Unsustainable caseloads and competing work demands for LACs mean that many participants receive only minimal contact. This leaves participants without the necessary support to identify compliance issues and respond to them effectively.

Significant barriers to accessing independent advocacy services (for example, long waitlists, lack of services) further entrench this imbalance of power. Without adequate supports, participants are required to negotiate directly with providers who hold greater knowledge, resources, and power within the system.

Structural drivers of non-compliance

The structure of the NDIS shapes the behaviour of providers. Increasing costs and complexity associated with NDIS registration pose a significant barrier for smaller providers. Accordingly, many small providers have exited the market or are planning to leave in the near future.i For providers who remain, the overwhelming majority choose to operate unregistered.ii This reduces both the diversity and accountability of services available to participants.

Meanwhile, larger for-profit providers have continued to expand and occupy an increasing share of the market. This is particularly concerning given consistent evidence from other sectors, such as

childcare and aged care, that demonstrates how the privatisation of essential services often leads to cost-cutting, workforce casualisation, and reduced service quality.

Workforce conditions also have an essential but under-recognised impact on the integrity of the Scheme. Within the NDIS, workforce conditions are frequently characterised by high workplace demands in conjunction with often insufficient pay, insecure employment, and inadequate training. These conditions drive burnout, high turnover, and inconsistent care. In such an environment, even proficient staff struggle to provide high quality services. Therefore, non-compliance must not solely be considered a regulatory issue but also a workforce issue.

System reform

Genuinely addressing integrity within the NDIS requires a shift away from a narrow focus on compliance and towards broader interrogation of the Scheme’s structure. Reforms should include shifting to proactive regulation, strengthening a rights-based approach for participants, and expanding access to advocacy and supported decision-making.

Reform also requires confronting the inherent limits of a market-based model. Assumptions that market competition will drive diversity and quality of services have not held true across other sectors, nor within the NDIS, particularly for participants with complex needs. Instead, reintroducing a stronger role for publicly provided services would provide a baseline of service quality and would reduce reliance on market forces alone.

Workforce reform is also essential. Without a stable, secure, and well-supported workforce, the conditions that give rise to non-compliance will persist regardless of how regulations are framed.

Conclusion

Non-compliance in the NDIS cannot be understood purely as the result of individual bad actors. It is a product of a system that has prioritised market mechanisms over public accountability, and individual responsibility over collective care.

For mental health consumers receiving support for psychosocial disability, this has required navigating a system that is difficult to access and often unsafe, with inadequate resources to respond to wrongdoing. Reforms aimed at strengthening integrity that do not address these underlying dynamics will continue to fail and will instead facilitate harm to the very participants that the Scheme is designed to support.

A genuinely robust approach to integrity must begin by considering not only how to prevent fraud, but how to build a system that participants and the broader community can trust - one that is grounded in human rights, supported by strong public institutions, and tailored to individuals.

[i] National Disability Services (2025) State of the NDIS Sector Report. https://nds.org.au/images/StateoftheDisabilitySectorReports/NDS8221%20NDS%20State%20of%20the%20Disability%20Sector%20Report%202025_FINAL.pdf

[ii] NDIS Minister Butler, as cited in: https://www.abc.net.au/news/2026-04-19/ndis-unregistered-providers-6b- savings-price-reform/106571188

Addressing structural drivers of non-compliance within the NDIS