Opening Statement on the National Disability Insurance Scheme Bill 2012 | External submission

Community Affairs Senate Committee

Inquiry into the National Disability Insurance Scheme Bill 2012

Department of Families, Housing, Community Services and Indigenous Affairs

Opening Statement

The Department welcomes the opportunity to appear and give evidence to the Committee. With the Committee’s permission I would like to provide an opening statement that seeks to address some of the issues that have been raised in submissions to the Committee and at hearings the Committee has held.

It is important at the start to recognise that the Bill needs to balance a number of objectives. Most importantly it has to create as a scheme that supports the independence and social and economic participation of people with disability and enables people with disability to exercise choice and control in the pursuit of their goals and the planning and delivery of their supports.

However the Bill has to also create a framework that allows rigorous decision making so that outcomes for participants are fair and transparent, and so that the National Disability Insurance Scheme is fiscally sustainable and operates on insurance principles, managing both current and long term costs.

Further, the Bill has to allow the Scheme to adapt in response to what is learnt from launch, and from the on-going operation of the Scheme, and in response to any changes in outcomes or costs that that might occur as a result of the operation of the Scheme.

The Bill that has been presented to Parliament balances a focus on choice and control, the need for rigorous decision making, and the need for flexibility so that the scheme can learn by

incorporating objects and principles to guide decision making under the scheme (most importantly at Chapter 1 and Section 31);
clearly outlining the powers of the CEO so that these are transparent to participants and external review bodies; and
creating rule making powers so that Governments can adjust the operation of the Scheme to ensure that the original policy intention of Governments (the creation of a sustainable Scheme to support people with disability to achieve independence and social and economic participation) is achieved.

In addition, it should be noted that the NDIS Bill requires that the Minister initiate an independent review of the operation of the Act, which is expected to occur in early 2015. The Ministerial Council will determine who conducts the review and terms of reference of the review. This Review is an opportunity to ensure that lessons learnt from launch inform the legislation. The findings of this review will be made public by the Minister.

The Department has been monitoring the issues raised in submissions to the Committee and in the hearings that the Committee has held, and would like to offer the following comments on some of the key concerns that have been expressed to the Committee. The Department would, of course, be happy to answer further questions about these matters or any additional matters that the Committee would like to raise.

Cost of the Scheme

Much of the analysis undertaken by the Productivity Commission in their report was based on the ABS Survey of Disability and Caring, which was conducted in 2009 to determine the percentage of Australians with a disability and the percentage of Australians involved in caring for a person with a disability or an older person. From this survey the Productivity Commission was able to determine the range of supports that people with disability were currently receiving, and to make estimates of unmet need. The Commission’s estimates of supports to be provided by an NDIS have since been examined by the Australian Government Actuary. The Australian Government Actuary reviewed the costing for the NDIS that were provided to CoAG in July, 2012. The review found the net costs for a full scheme would be in the order of $8 billion per annum. This is consistent with the original work on costings undertaken by the Productivity Commission.

The Commonwealth, State and Territory Governments participating in the NDIS launch have agreed to proceed from July 2013 in order to start testing the key elements of the scheme as soon as possible. The five launches between them will assist an estimated 26,000 people with individually funded support packages when fully implemented. The experience of providing support to this many people will provide important evidence and experience to help refine elements of the scheme where necessary and inform the further transition from five launches to a national scheme.

United Nations Convention on the Rights of Persons with Disabilities

The Bills includes as one of the primary objects of the Scheme giving effect to certain obligations that Australia has as a party to the Convention of the Rights of Persons with Disabilities (Section 3(1)(h)). The intention in including this reference to the United Nations Convention was to make it clear that the Agency should have regard to the principles of the convention in implementing its responsibilities under the scheme.

A number of submissions have questioned why the term ‘certain’ has been included in this section of the Bill, and whether it is possible to incorporate the United Nations Convention on the Rights of Persons with Disabilities in its entirety.

The reasoning behind the current approach to the drafting of this Section in the Bill was that the United Nations Convention deals with matters that are much broader than the objects and purposes of the National Disability Insurance Scheme (for example it deals with issues such as access to justice and discrimination which are properly dealt with through other Acts). Since it is not the intention of Governments that the National Disability Insurance Scheme cover all of these matters, the reference to the United Nations Convention on the Rights of Persons with Disabilities has been qualified by the inclusion of the term ‘certain’.

The Department notes that a number of submissions and some witnesses at the Committee’s hearings have also called for other United Nations conventions to be included in the Bill’s objects and principles. The Department considers that it desirable that the Agency CEO

should have regard to Australia’s obligations in relation to these conventions. However it does not appear to be necessary to include references to these conventions in the Bill in order for the Agency CEO to be guided by Australia’s obligations under these conventions.

Use of delegated instruments to create the NDIS rules

Disallowable instruments have been chosen as the approach for developing the NDIS rules because of the flexibility that they provide to make amendments as experience with the launch and scheme develops. Many areas of social support are legislated in this way over the past 15 years, including the approach taken to the introduction of Carer Allowance and the extension of Carer Payment to carers of children, to income management for income support recipients, to the impairment tables for the Disability Support Pension.. Experience has shown that the ability to amend these provisions quickly through drafting a new instrument where required without requiring a change to the primary legislation has provided a robust way of ensuring flexibility and agility as new evidence becomes available or unintended consequences arise during an implementation. As the Committee will be aware, the approach of using disallowable instruments does not remove these instruments from Parliamentary scrutiny.

Powers of Agency CEO

While the National Disability Insurance Scheme is intended to enable people with disability to exercise choice and control in the pursuit of their goals and the planning and delivery of their supports, it also has to provide a structure for decisions about the expenditure of a very significant amount of public funding. The allocation of funding to individuals is ultimately the responsibility of the Agency CEO. This is a responsibility that the Agency CEO should exercise in close partnership with people with disability and their families, carers and on occasion their advocates, but it is inevitably a decision making power that the Agency CEO has to exercise. The issue is whether the core decision points for the Agency CEO, and the associated information gathering powers, should be specified in legislation, or allowed to be done by the Agency CEO under the general administrative powers which officers responsible for the expenditure of public funding have available to them.

The Bill reflects the judgement that it is more transparent, and ultimately protects the rights of people with disability to a greater extent, to have the powers of the Agency CEO clearly specified. This ensures that where appropriate the CEO’s exercise of these powers can be scrutinised by external review bodies. In simple terms, specifying what the CEO is able to do also allows the law to be clear as to what the CEO is not able to do and therefore provides important protections to people with disability who are, or want to be, participants in the scheme.

The submissions to the Committee and public hearings that the Committee have conducted have identified two more specific areas where there is concern about the extent of the powers of the Agency CEO: the information gathering powers in Divisions 1 and 2 of Chapter 4, and the treatment of compensation in Chapter 5.

Information gathering powers

It is important that the National Disability Insurance Scheme does not impose an onerous burden on people with disability to collect and provide evidence of their need for support. The approach to defining the Agency CEO’s responsibilities in relation to access requests and

the development of participant plans has been designed to ensure that information will, for the most part, be collected as a part of the planning and assessment conversation with participants, or come from existing assessments and reports that prospective participants will already have to hand. Where additional information is needed by the Agency CEO to decide if a person is eligible to be a participant, the Bill ensures that it has to be reasonably necessary for deciding whether or not the prospective participant meets the access criteria.

The information gathering powers in Divisions 1 and 2 of Chapter 4 are not intended to be used in to decide access requests or develop participant plans. As is outlined in Section 53(2) and 55(2) these powers have been included to deal with a number of scenarios where additional powers are needed to protect vulnerable individuals and/or prevent fraud. The Department anticipates that these powers would be used rarely, however it is an unfortunate fact that the Agency will on occasion have to investigate fraud and or the possible exploitation by others of Scheme participants. Powers of this nature are therefore needed. An alternative would be to rely on the Commonwealth Crimes Act. However deleting these powers from the Bill, and using powers under Commonwealth Crimes Act, may result in more onerous powers being used to investigate these matters.

Compensation

The Department has been closely monitoring the submissions and comments at the hearings related to the treatment of compensation in the Bill. As has been observed in a number of submissions, the Bill draws on the social security law to define a number of powers in relation to compensation in Chapter 5, including the power to require a participant or potential participant to take action to obtain compensation.

This issue was also the subject of extensive comment in the consultations leading up to the tabling of the NDIS Bill 2012 in Parliament. As a result of those consultations Section 104(3) and 104(4) have been included in the Bill to ensure that any request to take action to pursue compensation is reasonable with regard to both the participant’s or potential participant’s circumstances, and the participant’s or potential participant’s prospects of success. The Department is confident that these sections would together operate so that in practice no participant or potential participant would be required to take action to obtain compensation that would put them at emotional or financial risk. As has been observed in at least one submission, these parallel provisions in social security law are very rarely used. However it is important that the Scheme, as is the case for the social security system, includes mechanisms to ensure that statutory and private compensation providers continue to meet their current obligations to people with disability and that there is no double dipping in terms of funding for care and support.

It should also be noted that the intent behind these provisions is not to deny potential participants access to support under an NDIS until their claim for compensation is resolved. The operation of the Bill would ensure that a potential participant who may have a right to compensation is supported by the NDIS while their compensation claim remains unresolved. This is an important aspect of the approach in the Bill because it ensures that if someone is injured they can have their support needs addressed immediately without having to wait for often lengthy legal proceedings to be finalised.

Advocacy

Best practice in advocacy includes a number of roles ranging from developing informal networks for isolated people with disability, helping people with disability access often unwelcoming mainstream services, supporting decision making for people with disability or setting up supports for decision making for people with disability, through to more formal advocacy such as representing a person with disability in reviews and appeals and advocating for systemic change in Australian society.

The Productivity Commission recommended that (formal) advocacy should lie outside the NDIS, reflecting the potential conflict of interest that would arise were the NDIS to fund advocacy bodies whose role was to challenge the decisions made in relation to the NDIS, and current funding arrangements through FaHCSIA and various state and territory governments should continue.

The Bill therefore does not include provisions that would allow the Agency CEO to fund formal advocacy services. The Department would consider that funding for formal advocacy is better done through existing programs. Responsibility for funding of disability advocacy is shared between the Australian Government and state and territory governments. The Australian Government funds 59 agencies to provide disability advocacy through the National Disability Advocacy Program (NDAP). The NDAP provides people with disability access to disability advocacy that promotes, protects and ensures their full and equal enjoyment of all human rights. In 2012–13 the Australian Government will provide $16 million under the NDAP to fund 59 organisations across Australia. The Department understands that many advocacy organisations would see the NDAP and parallel programs in the States and Territories as the appropriate source of funding for formal advocacy.

Since it is not the intention for the Bill to provide funding for formal advocacy, provisions establishing a right to advocacy have not been included in the Bill. It should be noted however that the approach in the Bill will allow participants and potential participants to have a family member, friend or formal advocate stand alongside them through the Agency’s decision making processes to given them confidence and formal support. In addition, some of the outcomes that Governments and people with disability expect of the Scheme, such as developing and fostering local networks of support for individuals and supporting decision making by people with disability as far as possible to ensure that substitute decision making is used only as a last resort, will mean that the Agency may on occasion provide funding to advocacy organisations in the advocacy roles that do not involve formally representing people with disability in appeals or reviews of the Agency’s decisions.

Limits on Participants Control and Choice

While it appears that most submissions accept that, sometimes with suggestions for relatively minor amendment, the objects and principles of the Bill give appropriate weight to the need to enable people with disability to exercise choice and control in the pursuit of their goals and the planning and delivery of their supports, a number of submissions and some of the evidence at the Committee’s hearings have raised two areas of concern about the limits the Bill places on participants control and choice:

Section 44 which allows the CEO to determine that a participant is not to manage all or part of the supports in their plan;
Part 3 of Chapter 4, which provides for the registration of providers; and 5

Part 5 of Chapter 4 which allows a nominee to be appointed by the CEO. Limits to self-management

The Department recognises that a decision to deny a participant’s request that they manage all or a part of the supports in their plan needs to be handled with care in order to fulfil the objective that the Scheme enable people with disability to exercise choice and control in the pursuit of their goals and the planning and delivery of their supports. In most cases this decision will be based on Section 44(2)(a), and that section provides that the threshold ‘unreasonable risk to the participant’ has to be crossed before the CEO can decide that a participant cannot manage all or part of the supports in their plan. The NDIS rules made pursuant to Section 44(3) have been designed also to ensure that this decision is only made after a rigorous risk assessment process that includes consideration of other safeguards that can be built around the participant.. The Department is confident that the operation of this section will, in practice, ensure that people with disability are not constrained by risk averse decision making, and that decisions to limit the control and choice for a participant in relation to the management of their plan are only made when there is an unreasonable risk to the participant that cannot be addressed through other measures.

Registration of providers

The requirements for registered providers has also been seen in a number of submissions as a potential limitation on participants’ control and choice. However, other submissions emphasised the need for robust registration processes to ensure the NDIS funds supports that are delivered appropriately. As is the case in a number of areas in the Bill, this area has been drafted to balance competing considerations, including the need to ensure that:

There is a range of providers available to participants who are able to provide high quality support, and there are no artificial barriers to entry to providing support under an NDIS;
People with disability have flexibility to choose from a range of providers when they are managing their own plans, and when they choose to have the agency manage their plans (or have been restricted from managing all or part of their plan);
The agency is able to administer the Scheme efficiently and effectively, while also having mechanisms in place to assure it that supports are delivered appropriately and without harm to participants when it is managing supports on behalf of a participant.

The approach in the Bill and the Rules, in particular in section 73, has been developed to balance these factors by:

Allowing providers who are self-managing to have flexibility to choose providers who are registered with the Agency, as well as to source support from mainstream commercial providers who are not registered with the Agency;
To limit the Agency to using providers who are registered, but to ensure that the process for registration is not onerous on providers. To this end the Rules have been designed to limit the impost on providers while also enabling the Agency to collect information that the community would reasonably expect should be able to be provided quickly and easily by any provider of specialist disability support.

The Department expects that many participants who choose to manage the supports in their plans will choose registered providers. However it is important to retain the flexibility for

participants to look beyond providers who are registered for the NDIS if that is there preference and they feel that those providers will meet their needs effectively.

While the Rules under Section 73 have been designed to build on existing Commonwealth, State and Territory quality assurance systems, the Rules have also been designed to allow the Agency to revoke a provider’s registration if there is a risk that a participant will be harmed or exploited.

The opening statement by the Agency has additional detail on how the registration of providers for the NDIS will work in practice.

Nominees

As is the case with decisions restricting the ability of a participant to manage the supports in their plan, the Department recognises that this is an area where decisions by the Agency CEO have to be made carefully to ensure that the Scheme, in practice, gives effect to the objects and principles of the Act.

The intention in creating a capacity for the CEO to appoint a nominee for the participant, either at the request of the participant or on the initiative of the CEO, was to ensure that where a participant was not willing or not able to make the decisions that will be needed under the Scheme, then the Scheme would not have to default to formal guardianship or administration orders and/or powers of attorney. In other words, the nominee provisions which are drawn from existing social security law, are designed to ensure that the scope of guardianship and administration orders and powers of attorney does not increase merely because an additional range of decisions need to be made by people with disability under the NDIS.

The Rules under Section 93 have been designed to ensure that nominees are only appointed by the CEO where better alternatives are not feasible, and where other options (such as supported decision making) have been explored. In addition, nominees will be expected to work with participants to build their capacity to make decisions so that the arrangements can be revoked in the future. To ensure that these provisions work effectively with existing State and Territory guardianship and administration orders the Rules also create the presumption that, if the participant has a guardian, the guardian should be appointed as nominee.

Age 65 threshold

In its recommendations for the NDIS the Productivity Commission assumed a cut-off for entry to the Scheme of age pension age, on the basis that ‘the aged care system is responsible for meeting the care and support needs of those who acquire disabilities later in life’. The Commission’s thinking on this issue was informed by the different characteristics of the risks that the specialist disability and age care systems address. On the one hand, specialist disability services are focused on addressing needs that last for the individual’s lifetime and which are difficult for individuals to insure against, either because they are occur at birth or are comparatively rare. On the other hand, a large proportion of Australians can expect to require aged care at some point in their lives due to disability arising from a health condition or more general frailty associated with ageing.

In the course of the Department’s consultations on the design of the scheme, the treatment of older people with disability has been raised with the Department a number of times. The

Department notes that number of submissions to the Committee and witnesses at the Committee’s hearings have also raised this issue.

If it is assumed that, in line with the Productivity Commissions approach, a starting point should be that the NDIS and age care operate together because of their different policy focus, then this is an area of policy that involves complex trade-offs. Extending eligibility for some groups to equalise treatment across age ranges has the potential to create inequalities in other areas. As is the case for the Committee, a range of views have been expressed to the Department about how to address this issue.

Departmental officials have had conversations with some organisations about these issues, including at a stakeholder Roundtable in Adelaide on 20 February attended by Minister Macklin and Minister Butler, and are continuing to undertake analysis of the interface between the NDIS and age care.

Continuity of support for people

Governments have agreed that it is critical that there is continuity of support for people as the NDIS is introduced and that people with disability are not disadvantaged in the transition to the NDIS. This is embodied in the Intergovernmental Agreement on the NDIS and has been actively considered by the Department as we have been working with the Agency and State counterparts.

There are two major groups whose continuity of support might not be guaranteed by the normal operation of the Scheme were special provisions not made. These are people who are currently receiving support from specialist disability services that will be transferred to the NDIS but who:

Do not meet the access criteria relating to disability, age or residence and would therefore not be able to become participants in the Scheme.
Are eligible to become participants in the Scheme, but who currently receive more support than what they would be entitled to under the Scheme’s definition of reasonable and necessary support.

The Department, State and Territory Governments and the Agency have been actively working on this issue. The Department is confident that the circumstances where continuity of support might not occur without special provisions are well understood, and that there are options that will enable the Agency CEO to ensure that these people are not disadvantaged in the transition to the NDIS. These options could include Rules made for this purpose under Section 21(2). Rules made under this section would need to be developed on a program-by program basis. The opening statement from the Agency has more detail on these arrangements for consideration by the Committee.

Philanthropy

The Productivity Commission considered the contribution that philanthropy makes to the current disability support system and saw a clear on-going role for private financial donations under an NDIS.

The Department recognises that this is a difficult area of policy. It appears that access to private donations and bequests is becoming increasingly competitive and in this context it is

understandable that organisations that rely extensively on private donations and bequests will see risks to this source of income arising from the implementation of an NDIS.

It is, however, not the experience of other sectors that public funding necessarily crowds out private donations and bequests, or makes an organisation that receives public funding unable to compete for private donations and bequests. Many health organisations that receive substantial amounts of government funding are also highly successful at raising private donations.

In addition, the design of the NDIS will allow providers to remain highly visible in the community. This will not shield providers from competition for private donations by organisations from other community sectors. However it will ensure that they have the resources, expertise and presence to actively market themselves in this increasingly competitive environment.

Consultation on the legislation and the rules

The process for developing the Bill and Rules for the scheme has involved substantial engagement with people with disability, families, carers, community groups and service providers.

The NDIS Bill

There was extensive consultation on the Bill supported by the release of the draft legislation prior to introduction to the Parliament, a consultation paper, an online forum through ‘Your Say” covering matter such as eligibility’ and ‘reasonable and necessary’ supports and face to face meetings with the Advisory Group, Expert Groups and a number of peak organisations to explain, discuss and get feedback on the Bill. Extensive work with states and territories has also occurred on the Bill.

The NDIS Rules

In relation to the rules, a consultation paper was released for comment on 1 February 2013. Comments are currently being analysed by the Taskforce. This has also been supported by an online forum through Your Say. The Taskforce has consulted with the Advisory Group, Expert Groups and the National People with Disability and Carers Council on early drafts of a number of the rules.

As with the Bill extensive work has occurred with all jurisdictions on the development of the Rules. Engagement on the rules will continue over the coming weeks, including:

A number of peak bodies have been provided with additional funding to support consultation with their members on the rules, or engage additional resources to respond quickly to requests for comments on the rules.
The Taskforce will consult with peaks to explain and discuss the rules. .
Further online forums will be undertaken; and
The NDIS Advisory Group and Expert Groups will further consider the rules. Working with the National Disability and Carer Alliance

Finally the Department has provided funding to the National Disability and Carer Alliance to undertake grassroots engagement with people with disability, their families and carers, and

service providers around Australia on the NDIS Bill. This work is ongoing. For the period between August and December 2012 the Alliance has held 77 consultations, in all states and territories in a mix of regional and metropolitan locations, involving 2,056 people between August and December 2012. The Alliance’s work is now focused on conducting forums and round tables on the needs of specific groups, including Indigenous Australians, people living on rural/remote Australia and people from a culturally and linguistically diverse background.