Senate

Revised Explanatory Memorandum

(Circulated by the authority of the Minister for the National Disability Insurance Scheme, the Hon Bill Shorten MP)

OUTLINE

The National Disability Insurance Scheme Amendment (Getting the NDIS Back on Track No. 1) Bill 2024 (the Bill) amends the National Disability Insurance Scheme Act 2013 (the Act) to do the following things:

1.

Require the National Disability Insurance Agency (Agency) to provide participants with a clear statement of the basis on which they entered the National Disability Insurance Scheme (NDIS, Scheme), either by meeting the disability requirements, the early intervention requirements, or both. The Bill will also clarify and expand the NDIS rules relating to access provisions, including the methods or criteria to be applied when making decisions about the disability and early intervention criteria and the matters which must or must not be taken into account.

2.

Create the new reasonable and necessary budget framework for the preparation of NDIS participants' plans. This aligns with the original intent of the NDIS to support people with permanent and significant disability as part of a larger landscape of supports outside of the NDIS. The Bill provides for 'new framework plans' to be developed in accordance with a new budget framework. Participants will receive funding based on whether they accessed the Scheme on the basis of impairments that meet the disability requirements or the early intervention requirements or both.

3.

Provide for the needs assessment process and the method for calculating the total amount of the participant's flexible funding and funding for stated supports for new framework plans to be specified in legislative instruments and NDIS rules. These will be developed in consultation with people with disability, the disability community, health and allied health technical professionals, and with all States and Territories.

4.

Insert a new definition of 'NDIS supports' which will provide a clear definition for all participants of the supports that will be funded by the NDIS and those that will not.

5.

Insert measures focused on protecting participants such as:

a.

Allowing the CEO to specify in a participant's statement of participant supports a total funding amount under the plan for reasonable and necessary supports together with funding component amount(s) under the plan for group(s) of supports, up to a specified amount.

b.

Clarifying the requirement that an NDIS participant who receives an amount or amounts for NDIS supports may only spend that money in accordance with the participant's plan. This reflects the reasonable expectation that participants should spend up to the limits specified in their plan – unless their needs significantly change and spend on supports needed as a result of their impairment.

c.

Enabling the Agency to change the plan management type as well as imposing shorter funding periods to safeguard participants where others may seek to exploit or coerce the participant to use their package in a way that is not consistent with their best interests.

6.

Insert quality and safeguard amendments to enable the imposition of conditions on approved quality auditors to not employ or engage a person against whom a banning order has been made, and to enable greater delegation of the Commissioner's compliance and enforcement powers to specified positions.

Wherever the Bill inserts new and expanded NDIS rule-making powers, these rules must be made in compliance with the requirements of section 209 of the Act and the Legislation Act 2003.

The Bill contains two schedules:

Schedule 1 sets out the new definition of NDIS supports; clarifies the process for reassessment of participant status; provides for participants to transition to a new framework plan; provides for new framework plans that include a flexible budget and budget for stated supports; old framework plans to have total funding amount; updates to circumstances in which the Agency will manage funds; specification of the requirement that participants spend money only on NDIS supports and in accordance with their plan and; exemptions for NDIS rules from sunsetting.

Schedule 2 sets out conditions on approval of quality auditors in relation to the employment of someone with a banning order against them and provides for an expansion of delegation powers with respect to compliance and enforcement powers.

BACKGROUND

The Bill is the first in a series of legislative changes the Australian Government will make in response to the 2023 Independent Review into the NDIS (the NDIS Review).

Co-chaired by Professor Bruce Bonyhady AM and Ms Lisa Paul AO PSM, the NDIS Review delivered its final report 'Working together to deliver the NDIS' to Australian governments in December 2023.

The NDIS Review considered Australia's disability system in its entirety with a focus on improvements to deliver better outcomes for people with disability in a more responsive and cost-effective way. The NDIS Review calls on Australian governments to commit to creating a unified ecosystem that supports people with disability.

The NDIS Review engaged closely with people with disability, their families, carers, providers and workers. The NDIS Review heard from over 10,000 people and organisations and hosted 14 webinars and over 200 virtual and face-to-face consultations including 38 regional, rural and remote engagement and 50 phone interviews. The NDIS Review also received over 4,600 online submissions from both individuals and organisations. The recommendations and actions reflect the breadth of this consultation.

National Cabinet considered the NDIS Review's final report in December 2023. National Cabinet agreed that the Commonwealth would work with state and territory governments to implement legislative and other changes to return the NDIS to its original intent of supporting people with permanent and significant disability as part of the larger landscape of supports outside of the NDIS.

The NDIS Review made
26 recommendations with 139 integrated actions which provide a blueprint to renew the promise of the NDIS and deliver a more accessible and inclusive Australia.

National Cabinet committed to introducing an initial tranche of legislation to the Commonwealth Parliament in the first half of 2024. Other recommendations that are likely to require legislative changes, including changes to NDIS rules, will be considered in the future following engagement with the disability community. Not all the NDIS Review recommendations will require legislative changes.

The amendments in this Bill give effect to NDIS Review recommendation 3 and interconnected elements in recommendations 5, 6, and 7. The amendments also support the partial implementation of recommendation 17.

The amendments enable progress of key NDIS Review recommendations to clarify the NDIS access requirements and the supports that the NDIS will provide a participant, to create a new model for determining a reasonable and necessary budget, and provide more flexibility on how the Commissioner can take regulatory actions to protect NDIS participants from abuse, harm and neglect.

Although participants with new framework plans will no longer receive 'reasonable and necessary supports', the concept of what is reasonable and necessary for participants remains at the core of the NDIS with the creation of the 'reasonable and necessary budget'.

FINANCIAL IMPACT STATEMENT

The changes in the Bill are expected to contribute to decisions made by National Cabinet to moderate cost growth of the NDIS in the medium to long-term and meet the 8 per cent sustainability target by 1 July 2026.

The immediate changes arising from the Bill can be operationalised by the Agency from early 2024-25.

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

The statement of compatibility with human rights appears at the end of this explanatory memorandum.