The federal government is introducing legislation that will give the National Disability Insurance Scheme (NDIS) regulator stronger powers to tackle fraud and better safeguard a program that costs $50 billion a year but has suffered from major oversight failures. The changes aim to block bad actors, including auditors and consultants who give misleading advice, from operating in the system. However, the shake-up could also increase pressure on already stretched service providers.
The NDIS Commission will soon be able to ban dishonest providers and restrict how they advertise their services, as part of a broader push to clean up a scheme that has faced increasing criticism for weak controls. This follows reports that tens of millions of dollars in participant claims were paid without verification, including during periods when no reviews were conducted.
In one case, claims made during late afternoons on weekdays or alternate weekends in the 2020–21 financial year were automatically approved without review. As a result, only $4 million of the $35 billion in claims for 2022–23 were properly reviewed. The government has already tightened these processes, making claim reviews mandatory and investing $550 million in fraud detection. This has led to $86 million in questionable payments being blocked for 2024–25 so far.
Despite the focus on fraud prevention, experts say the problems go deeper. Many argue the scheme needs structural reform to remain financially sustainable. The government has introduced an annual spending growth cap of 8% in agreement with states and territories. However, some ministers are pushing to reduce that figure to between 5% and 6%. A key reform planned for mid-2027 will redirect children with mild autism to services outside the NDIS. This change is tied to the new $2 billion Thriving Kids program, which may face funding challenges at the state level.
The NDIS is growing faster than other major programs like Medicare or the age pension. Current estimates suggest it could cost taxpayers more than $100 billion a year by 2035–36. While increasing fraud controls marks progress, further tough choices remain to ensure the scheme is both effective and financially sustainable for Australians with disability.
