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Unpacking the 2024 NDIS reform Bill: What changes are in store?

Updated: Apr 15

 Written by Hayley Towers



 Introduction


The final report of the Independent Review into the National Disability Insurance Scheme (NDIS Review) was released in December 2023.


As an initial response, the Government introduced the National Disability Insurance Scheme Amendment (Getting the NDIS Back on Track No 1) Bill to parliament on 27 March 2024.


The Bill addresses “priority recommendations” from the Review and represents the first tranche of amendments to the National Disability Insurance Scheme Act 2013 (NDIS Act).


The Bill’s explanatory memorandum states that the Bill gives effect to the NDIS Review recommendation 3 and interconnected elements in recommendations 5, 6, and 7. The amendments also support the partial implementation of recommendation 17.


So what does all this mean?


There are three broad areas that are targeted by the new Bill.


1.     Accessing the NDIS

2.     NDIS Plans, Supports and Budgets

3.     Quality and Safety


1. Accessing the NDIS


Early intervention requirements


The NDIS Review stated that the NDIA should reform the pathway for participants entering the scheme under early intervention requirements, so that it has a distinct path that supports these participants better.


What does the Bill do?


The Bill introduces a requirement that the NDIA must assess and advise participants as to whether they are entering the scheme based on a disability pathway (s24) or the early intervention requirements (s25) or both. The NDIA must specifically consider both access points and which one applies.


According to the Government, this decision on how a new participant will enter the NDIS will inform how the participant’s future support needs are assessed, and in the long term this will enable the establishment of the separate early intervention pathway recommended by the NDIS Review.


However, the Bill doesn’t actually prescribe anything on early intervention pathways and the Bill’s explanatory memorandum simply states:

“The new early intervention pathway will be designed in consultation with people with disability.”


Our take? This is just the first “legal” step and we will need to wait for the design consultation that is promised.


How access to the scheme is assessed


Currently, access to the scheme is dependent on a participant having a disability that is (amongst other things) a permanent impairment.


The NDIA relies on Diagnostic or Access Lists developed to aid the assessment of permanent impairment. The NDIS Review argued that this list process is unfair and that access should be based on needs and the impact on function, rather than requiring a diagnosis of a condition that fits within a list.


The NDIS Review Final Report (NDIS Review Report) stated:


“Now that we are at full scheme, access lists are creating inequity between people with a condition on a list, and people with a similar level of need but with a different condition not on a list. This is driving access to be based on diagnosis, rather than functional impairment and need. “


The answer?


A proposed new section 27 of the Act gives broader powers to the NDIS Rules to set out how decisions should be made about the disability and early intervention access criteria.  The government says: 


“This will enable the Australian Government to define key concepts such as ‘substantially reduced functional capacity’ as recommended by the NDIS Review.”


The explanatory memorandum further states:

“The rules made under section 27 will allow the NDIS to provide clarity about whether the person is eligible and should apply for the NDIS or whether supports should be sought outside of the Scheme.”


According to the media releases, for early intervention, this rule-making power will also allow new early intervention pathways for people with psychosocial disability and children (including access and planning for children younger than 9 years old).


Again, this is heavily reliant on the NDIS Rules themselves and what is ultimately agreed between the states and territories, so this will be a wait and see. But this has potential to be a game changer.


2. NDIS Supports, Plans and Budgets


NDIS supports

The NDIS Review said that the concept of NDIS supports being funded if they are ‘reasonable and necessary’ was a “key driver of the current challenges with planning”.

The broadness of the current concept was intended to bring flexibility; but according to the Review it has meant a lack of clarity and regular contesting of what is and is not included.


The NDIS Review report stated:


this can mean that supports are approved (or not) on the basis of the sufficiency of evidence and/or the ability of the individual or their family and supporters to advocate. This means funding is not always directly linked to need.”


The answer?


Under the new Bill, there will be a new definition of NDIS supports.


Firstly, a new section 10 (a) of the Bill is based on a “constitutional underpinning”[1] for the new planning framework and limits NDIS support to a support that:


  • is necessary to support the person to live and be included in the community, and to prevent isolation or segregation of the person from the community; or

  • will facilitate personal mobility of the person in the manner and at the time of the person’s choice; or

  • is a mobility aid or device, or assistive technology, live assistance or intermediaries that will facilitate personal mobility of the person; or

  • is a health service that the person needs because of the person’s impairment or because of the interaction of the person’s impairment with various barriers; or

  • is a habilitation or rehabilitation service; or

  • is a service that will assist the person to access a support covered by subparagraph (iv) or (v); or

  • will minimise the prospects of the person acquiring a further impairment or prevent the person from acquiring a further impairment; or

  • is provided by way of sickness benefits.


The new Bill then inserts further provisions allowing Rules to be made to further narrow the above supports to those that are "appropriately funded by the NDIS", as follows:


  • Under the new Bill support is only a NDIS Support if it is declared in the NDIS rules as appropriately funded or provided through the NDIS for participants. In other words, the amended Rules will specify the supports that will qualify; and


  • the amended NDIS Rules will also refer to supports that are not an NDIS support. For example, ‘supports’ such as holidays, groceries, payment of utility bills, online gambling, perfume, cosmetics, standard household appliances and whitegoods will not qualify as NDIS supports.


The new rules will also require the unanimous agreement of all States and Territories before they can be made.


Until the new rules are made, APTOS will be incorporated to determine what is and is not a NDIS support (i.e. the support is in a class of supports mentioned in the Applied Principles and Tables of Support under the heading ‘Reasonable and necessary supports for eligible people’). Reliance on the APTOS is a transitional measure that will only be in place until new NDIS rules can be made, which the government says will be a top priority.


Flexible Budgets


At 3.4 of the NDIS Review report, it stated:


“The National Disability Insurance Agency should introduce new needs assessment processes to more consistently determine the level of need for each participant and set budgets on this basis. This should support the allocation of a reasonable and necessary budget at a whole-of-person level.”


Recommendation 3.4 also suggested that budgets should be more flexible:

“The total cost of supports recommended by the Needs Assessor should be translated into a budget that can be used more flexibly by the participant to meet their needs”.


And at 3.5:


“The budget should consist of a flexible budget, a housing and living budget, and stated supports for assistive technology, equipment, or other one-off capital costs. The flexible budget should include funding for supports formerly known as core and capacity building supports.”


The answer?


A new section 32A of the Bill clarifies that there will be two types of plans from now on; New and Old framework plans.


Further, a new section 32 L sets out that the NDIA must arrange for a ‘needs assessment’ report as soon as practicable after a plan is commenced.


The needs assessment must be undertaken using the ‘assessment tool’ and must only relate to the impairments for which access has been granted to the scheme. 


What the assessment tool will be, or who can do the assessments, is yet to be declared.


All participants will eventually transition to a new framework plan. The explanatory memorandum says that the new framework plans are:

the basis for setting a reasonable and necessary funding package at a whole-of- person level, rather than for individual support items, in line with action 3.4 of the NDIS Review .”


Under the new Bill, the Statement of Participant Supports for New framework plans prepared with the participant and approved by the NDIA, must specify the following: 


  • the participant’s reasonable and necessary budget;

  • the general supports (if any) that will be provided to, or in relation to, the participant; and

  • having regard to the plan’s needs assessment report, whichever of the following applies:

    • that the participant meets the disability requirements

    • that the participant meets the early intervention requirements

    • that the participant meets both the disability requirements and the early intervention requirements.

  • the plan’s maximum period of effect, starting on the day the plan is approved.


A participant’s ‘reasonable and necessary budget’ is to be made up of flexible funding or stated supports, or both.


Flexible funding will be available where the needs assessment report for the participant’s plan indicates that they need at least some NDIS supports that are not stated supports. A total amount will be allocated for both the flexible funding and the stated supports.


Stated supports are provided for specific high-cost items. Category A NDIS rules will prescribe supports that are stated support for participants or classes of participants. For example, high-cost assistive technology, home modifications and supported independent living may all be stated supports.


A participant may spend their flexible funding on any of the newly defined NDIS supports.

However, the NDIA has power to restrict this under s32F. According to the explanatory memorandum, these restrictions will only be used where a participant has a history of over-spending, non-compliance with the relevant NDIS rules, or the Agency has identified risk of harm to a participant.


Section 32G also allows for the NDIS to specify that funding will only be provided if certain conditions are met – such as a requirement that the participant obtains more than one quote for home modifications.


Funding periods are a maximum of 12 months but can be rolled over inside of the same plan.

Finally, the Bill specifies further NDIS Rules to be devised setting out how the NDIA is to make decisions restricting flexible funding, including any requirements and criteria that must be followed.


How is this all going to work?


There is a 5-year plan to move all participants over to the new framework and the Minister has been given power to make legislative instruments to support the new “budget framework planning” process.


Determining the appropriate budget (for stated supports and flexible funding) will be based on the needs assessment and using an assessment method to be determined by legislative instrument.


Not much can happen with the new framework until the assessment tools for the needs assessment are developed and the method is determined. Until then all plans are “Old framework plans”.


For Old framework plans, the new Bill enables the NDIA to specify a ‘total funding amount’ and a specified amount for individual supports or classes of support.


Importantly, supports under the Old framework plans must be “NDIS supports” under the new definition.


How the the total funding is calculated, is dependent on the Minister making a determination under legislative instrument.


Making the circumstances transparent in which the NDIA can interfere with plan management


Section 43 of the current Act deals with participant choice of plan management type.


The new Bill inserts further subsections specifying the circumstances in which the NDIA can refuse or change the plan management arrangements for a participant. 


The changes centre around mis-management of funds and possible harm to the participants.


In particular, for New framework plans the NDIA may decide that a particular portion of flexible funding or a particular portion of funding for stated supports is to be managed by someone different to the current plan manager.


For example, the NDIA can decide that the flexible funding is to be Agency managed or managed by a registered plan management provider, rather than self-managed.


The circumstances in which the NDIA can do this are:

1. the participant might be likely to suffer physical, mental or financial harm if the NDIA does not make the decision, or

2. the requirement to spend money in accordance with the participant’s plan has not been met; or

3. a circumstance specified by the NDIS Rules.


The Bill allows for further NDIS rules setting out how the NDIA must make this decision.


Further, section 44 is amended to allow for new Rules to provide clarity around when the NDIA can refuse to allow a person to manage funding as it would ‘present an unreasonable risk to the participant’.


3. Quality and Safety


Recommendation 17 of the NDIS Review was for a new “risk proportionate” model for regulation of providers and workers. The report stated:

 

“There are gaps in oversight of providers, particularly when delivering high-risk supports”.


The explanatory memorandum states that Schedule 2 of the Bill will:


  • enable the Commission to attach conditions to the approval of an approved quality auditor; and

  • strengthen the NDIS Commissioner’s ability to take regulatory actions by delegating certain compliance and enforcement powers and functions.

 

What does schedule 2 of the Bill do?


The new Bill only covers limited aspects of NDIS regulation and compliance.


A new s73U allows for NDIS Rules to be created to specify the conditions of approval of quality auditors.


An example is given in the explanatory memorandum:


“… the proposed NDIS rule-making power could be used to impose a condition requiring an approved quality auditor not to employ or engage a person against whom a banning order has been made. Such a condition would prevent banned persons from being able to move from the NDIS provider sector of the NDIS market system to the NDIS auditing sector, and continue to engage in activities that had them banned from the provider market.”


The second change repeals and substitutes s202(b) (1) and (2), which are provisions about the NDIS Commission’s power to enforce compliance with the Act.


Currently this can only be done by SES officers, of whom there is a limited number. Now the Commissioner can delegate to certain employees lower than SES certain powers and functions, including compliance notices and infringement notices, leaving the SES to focus on more significant breaches.


The Government states that these changes will enable the NDIS Quality and Safeguards Commission to administer parts of its compliance and enforcement powers more efficiently, in addition to the task force that was commissioned in February this year.


Noticeably, the Bill does not make any changes to the issue of registration of providers.


What is next for the NDIS?


It appears that some of these changes will take effect immediately on passing of the Bill, including:


  • that the NDIA will have to tell participants if they have access to the Scheme based on the disability or early intervention requirements, or both;

  • how participants can use their NDIS funding for supports, as set out in the new section 10 (a) combined with the Applied Principles and Tables of Support (APTOS);

  • that plan management types can be changed by the NDIA where there is financial or other risk to the participant, or the plan nominee/plan manager has not spent NDIS funds in accordance with the plan (although some of these changes seem to only apply to new framework plans); and

  • the delegation of enforcement powers.

The other changes in the Bill will need to wait on the development of legislative instruments, new NDIS Rules and, importantly, further design consultations with the disabled community and disability sector.


The government is to release its full response to the NDIS review later this year.


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