The ABCs of the NDIS

We are hearing the same message from media articles to politician’s speeches and training workshops: the NDIS is being rolled out and it will change the way disability providers do business. The change will be radical and providers better get ready.

But what is this change? And what will it all mean? This article set out the key things everyone should know about the NDIS.

The roll out of an ‘NDIS’ is actually three big changes bundled into one:

  1. Funding will be national and based on insurance principles. A single national agency (the National Disability Insurance Agency: NDIA) will ensure that people will get the same opportunities regardless of which state they live in. And there will be more funding for early intervention by using insurance principles that look at the lifetime costs of a person with disability.

  2. Individual plans replace grant funding and government contracts. Governments will no longer provide funding to providers who then select their own clients. Instead, every person with disability will have their own plan and be able to choose the provider of their choice.

  3. Double the funding. Without the NDIS disability funding would have been around $11b in 2019, with the NDIS the funding will increase to $22.2 billion in 2019.


Who will be covered?

The NDIS is not for every person with a disability in Australia.

The Scheme is only for those who come to the Agency while they are aged under 65 years. People who are over 65 and need support for the first time will go to the aged care system. But if a person came into the NDIS before age 65, they can continue to get their assistance from the NDIS. People won’t be kicked out of the NDIS when they turn 65.

Disability has a broad meaning in the NDIS, but the impact on a person’s daily life has to be substantial. The NDIS is not diagnosis based like some programs currently are – it will look at the impact that a person’s impairments have on their life. Mobility, vision, hearing, intellectual impairments will all be covered, as will mental health conditions (called psycho-social impairments in the NDIS) so long as they have a big impact on a person’s daily life. There are expected to be around 410,000 people who meet this definition across Australia and are called ‘participants’ in the NDIS.

There is a group of people who have a disability but who won’t meet the above definition. This group is covered by what is known as Information, Linkages and Capacity Building (ILC) (formerly known as Tier 2) and the group will be large: around 800,000 people. The way the NDIS will support this group is still not fully understood but a recent discussion paper on the ILC can be found at We do know that the NDIS will provide advice, refer and linkages to this group. Currently people in this group do not get an individual plan with the NDIS nor do they get any funding for one off items, like a walker or a short term therapy. In early 2015 governments asked the community for feedback on the Information, Linkages and Capacity Building Policy Framework.

What this means for service providers:

  • Providers will no longer have to determine eligibility for their programs, they can simply accept NDIS participants who have funding to purchase the types of services they offer. This will make the disability system demand driven – people with disability have their own budget for services and can spend it with any provider they wish.

  • Providers will have some people in programs who are eligible for the NDIS and others who fall into the Tier 2 cohort. So far, governments have said that no one will be disadvantaged by the transition to the NDIS. But without any definitive plans for what the group of Tier 2 people will receive (other than referrals) providers will face some uncertainties about what the future holds for these clients who won’t be eligible for the NDIS. Governments have committed that people will not be disadvantaged in the transition to the NDIS and that people will have a continuity of support even if they are not eligible for the NDIS. More information about continuity of support is available on the NDIA website ( ).


What will the NDIS pay for?

The NDIS is designed to pay for the things that people with disability need as a result of their disability in order to achieve their goals. This means that the NDIS will pay for almost everything previously considered a ‘disability service’ as well as new and innovative services to meet people’s needs. The services that the NDIS pay for are called ‘reasonable and necessary supports’.

The NDIS won’t pay for things that everyone in the community needs, such as utility bills or private school fees. The NDIS also won’t pay for things that is the responsibility of another government department – such as medical care like a knee replacement or education services like a teacher’s assistant.

Many existing State and Federal government disability programs will transfer into the NDIS. Most program are ‘cashed out’ meaning that the government has stopped funding the service provider through their contract and the provider must rely on retaining and attracting NDIS participants to pay for their services. A small number of programs will remain ‘in kind’ which means that governments continue their funding agreement with the provider, but the provider must ensure that a certain percentage of the program clients are NDIS participants.

What this means for service providers:

  • Providers have an unprecedented amount of flexibility in service design and delivery in the NDIS. Providers can now design programs they think will best meet the needs of participants, not just services that fit into a narrow government funding grant application. The NDIS has turned the focus onto outcomes (instead of outputs) and this allows providers to come up with creative solutions to assist participants meet their goals.

  • The transition will be bumpy for some providers. The idea of ‘in-kind services’ has been complicated for many services to implement – requiring clients to track against both old funding agreements and through the NDIS’ new IT systems. Some providers will end up having to run duplicate systems that unnecessarily chews up management, administrative and finance staff time.


How will the NDIA work with people?

The NDIA will be developing an individual plan with every one of the 410,000 participants and linking them with support providers and other services in their local community.

This means the NDIA will be a big agency. It is estimated to have over 10,000 staff by 2019 and a budget of $1.1 billion just for its internal departmental costs.1

The NDIA’s way of working with participants is a bit different across its thirteen offices around the country. In general, the Agency has two types of staff (or two types of roles performed by the same person in locations where these are combined).

The first is a planner: someone who works with a person with disability to see if they are eligible for the NDIS. If they are eligible, the planner will develop an individual plan with the participant that sets out their goals and determines how much funding they will have to purchase the supports they need.

Service providers will not generally be involved in this planning discussion or in determining what supports a person gets. The NDIA does ask some service provide to give the NDIA a list of their clients to make sure everyone who is eligible for the NDIS are having a planning discussion.

The second is a local area coordinator: someone who helps a participant (or person in ‘ILC’) connect with service providers to purchase the supports in their plan or to access other mainstream services like healthcare or Centrelink. In some locations the NDIA has contracted non-government organisations to provide these local area coordination services.

What this means for service providers:

  • Providers generally won’t be involved in developing individual support plans. So there may be concerns that plans do not include types of support or the level of support that providers think are appropriate for the participant.

  • People with disability and their families will replace government bureaucrats as the most important group that providers need to build relationships and credibility with in order to maintain and grow their organizations.


Where and when is the NDIS being rolled out?

The NDIS is starting small and quickly growing big. Around 30,000 people will be supported by the NDIS between now and June 2016. Another 430,000 people will enter the NDIS between July 2016 and June 2019.

Every state as agreed that by June 2019 the NDIS will be fully rolled out across the country (with the exception of Western Australia). Some jurisdictions such as the Australian Capital Territory will be covered as early as 2016. Each Premier has made the commitment through an agreement (called ‘Bilaterals’ or Heads of Agreements) which is as close as government agreements come to being set in stone. They are very unlikely to be change. WA is the only state that is yet to commit to the NDIA rolling out the NDIS in the their state, however Premier Barnett from WA has said that there will be NDIS, it may just be run by a WA agency rather than a national one.

The plans for how the scheme will be rolled out are currently being developed by the Commonwealth and each state government. Governments have set a date of June 2015 for these plans to be agreed. The NDIA recently released a report from KPMG on the key risks and issues to be resolved before it decides how it will reach all 440,000 participants by 2019. The community still doesn’t know what locations, age groups or disability types will be getting the NDIS when, only that everyone will be covered by June 2019.

What this means for service providers:

  • Providers in the NDIS’ seven trial sites are testing the NDIS design so that there’s a robust model to bring in over 100,000 people per year from 2016 onwards. This means providers in these trial sites can expect some changes in the way the scheme works as the Scheme’s problems are identified and ironed out.

  • Providers outside the trial sites still don’t have a timeline for when the NDIS will reach them. Yet across all the country, we know that by 2019 funding will be individualized and the whole disability system will be demand driven. When it comes to the NDIS, it’s not a question of if new systems and business models are needed, it’s a question of which financial year and which quarter these need to be in place. Commonwealth and State ministers are also considering an NDIS Market, Sector and Workforce Strategy in April 2015 which may have more details about how providers will be assisted in the transition to the NDIS.


What is still being worked out?

The NDIS is a big change to the way things work. There are still some key issues that are still being worked out. Many of these issues are about what the role of the NDIA should be and what roles (if any) State governments should keep doing once the NDIS is fully rolled out.

  • Who regulates providers? The NDIA is set up to work with participants and pay money to providers on their behalf. State governments are still regulating the providers in their jurisdictions. However by 2019 most states do not intend to have any responsibility for disability services, opening the question of who is responsible for ensuring the quality and safety of disability services. Commonwealth and State ministers have set a deadline of the end of 2015 to work out how the framework for quality and safeguards in the NDIS.

  • Is everything really able to be individualized into a person’s plan? The NDIS is based on an (almost) complete individualization of all disability services. Some providers are finding that their services aren’t well suited to being fully fee-for-service. Throughout the trial sites the NDIA will need to be testing whether the whole disability system can really be fee-for-service, or whether some things are better centrally funded.

  • How will housing be funded to expand group homes and independent living? The NDIA has yet to outline how it will contribute to move housing options for participants, only that the funding is available to pay for the support workers to assist participants live independently. There have recently been a number of media reports from the Every Australian Counts movement and the Summer Foundation stating that the housing question is essential to making the NDIS work and needs to be sorted out before the Scheme gets rolled out nationally. The disability ministers from the Commonwealth and States are meeting in April 2015 to consider how housing should work in the NDIS, including what the housing responsibilities of the NDIS are vis-a-vie Federal and State governments, as well as individuals and communities.


Where can you find out more?

The NDIS website ( has a range of fact sheets on who is eligible and how the NDIS works.

Disability Services Consulting are running a series of workshops until July 2015 on what the roll out of the NDIS means for business models, marketing, allied health and housing.


1. National Disability Insurance Agency (2014) A review of the capabilities of the National Disability Insurance Agency, page 9