The National Disability Insurance Scheme (NDIS) is a new national approach to providing support to people with disability, their families, and caregivers. It funds costs associated with reasonable and necessary disability supports. It is jointly governed and funded by the Commonwealth, State and Territory Governments. (Parliament of Australia updated March 2017).
The scheme was legislated in 2013 and was fully implemented across Australia by December 2020. It is administered by the National Disability Insurance Agency (NDIA) and overseen by the NDIS Quality and Safeguards Commission (NDIS Commission).
The NDIS provides life-long support to all Australians who are born with or acquire a permanent and significant disability before the age of 65 – and which substantially impacts on how they manage everyday activities. The NDIS provides support to not only to people with a permanent and significant disability but also to their families and caregivers.
One of the main objectives of the NDIS is to increase the choice and control that people with disability have over the support they receive. This is a fundamental break from the previous welfare approach under the National Disability Agreement.
The NDIS aims to empower eligible participants with a disability to use funds given to them in their NDIS Plan to purchase services that reflect their lifestyle and aspirations.
Under the NDIS, people with disability receive individual funding packages which they can use to pay their chosen providers for the support they need, instead of being referred to services that are deemed appropriate for their needs. This is a fundamental change to the nature of disability support.
Before the NDIS, people with disability were moved around the system according to decisions made by government or other organisations providing disability support.
“Under the NDIS, the funding will move around the system based on the choices people with disability make. The development of the new market for NDIS disability services is expected to take up to ten years because the changes to the system are so extensive”.
Audit Office of NSW. 23 February 2017
The NDIS reform ensures a shift in how disability support is delivered. Under the NDIS, participants are assessed to determine what supports they require to live an ‘ordinary life’ within the framework of what is considered under NDIS legislation as ‘reasonable and necessary’.
Participants engage in a planning process where these needs are articulated by the participant themselves. They are then provided with an NDIS plan.
Each plan developed with the participant and their family or other informal support networks has funding attached to it for that participant – this is what is meant by ‘individualised funding’.
Based on what is listed in that plan, participants then ‘purchase’ their supports directly from service providers and those providers will invoice back to the person’s plan after the support has been delivered.
Participants therefore have a much greater variety of options for where they can purchase these supports – thereby ‘exercising choice and control’ over their life.
The introduction of the NDIS Act 2013 was definitely a history making reform and introduces new and increased responsibilities for boards, management teams and leaders of organisations and individual business owners who want to register for approved NDIS Provider status.
What system is the NDIS replacing
The NDIS largely replaces the previous system of disability care and support provided under the COAG (Council of Australian Governments) endorsed National Disability Agreement (NDA) 2009.
Under the NDA, the Australian Government had responsibility for providing employment services for people with disability and providing funding for States and Territories to assist with meeting the objectives of the NDA.
Under the NDA, State and Territory Governments were responsible for specialist disability services – such as accommodation support, respite care, community support, community access, day activities, advocacy, and information for people with disability.
The NDIS essentially disrupts the way that disability services have been traditionally funded in the past as it re-directs funding away from organisations and to individual people with disabilities.
What are the major differences between the NDA and NDIS
“The National Disability Insurance Scheme (NDIS) represents a fundamental change to how supports for people with disability are funded and delivered across Australia.
“In the past, the majority of supports were delivered through government agencies, and providers were ‘block funded’ by government agencies to deliver particular supports to a certain number of people with disability.
“In the NDIS, people with disability are at the centre of the system. People with a permanent and significant disability that affects their ability to take part in everyday activities and those who would benefit from early intervention receive individualised funding to access reasonable and necessary supports”.
NDIS Quality and Safeguarding Framework, 2016, page 5
A snapshot of how the NDIS changes the way people with disability access services and support, before the NDIS and now with the NDIS can be seen at:
What does 'insurance' mean in the NDIS vernacular?
The move to an insurance-based model as the basis for the NDIS is a major change to the previous fixed term funding contracts, agreements, and schemes. This shift can be described as a move away from a welfare-based model with no long-term plan to minimise costs to government.
The word ‘insurance’ in the National Disability Insurance Scheme refers to the scheme’s use of proactive insurance principles to manage long-term financial sustainability. It aims to ensure any Australian citizen will have costs covered in the event they are born with or acquire a disability.
The insurance model takes a long-term view of the total cost of disability and operates on a system of reducing the lifetime costs for a person and funding what is necessary for each eligible person’s life. The funding provided under the NDIS is aimed at improving life outcomes, and to meet the future costs of the scheme.
Legislative and regulatory frameworks of the NDIS
National Disability Insurance Scheme Act 2013.
The National Disability Insurance Scheme Act 2013 (NDIS Act) is the legislation that established The National Disability Insurance Scheme and the National Disability Insurance Scheme Launch Transition Agency (known as the National Disability Insurance Agency or NDIA).
The NDIS Act sets out:
National Disability Insurance Agency (NDIA).
The National Disability Insurance Agency (NDIA) is an independent Australian government organisation that administers the NDIS. The role of the NDIA is to implement the NDIS.
NDIS Commission webpage: About us – National Disability Insurance Agency
NDIS Quality and Safeguards Commission (‘The NDIS Commission’)
The NDIS Quality and Safeguards Commission is an independent agency established in 2018 to improve the quality and safety of NDIS supports and services.
The NDIS Commission regulates NDIS providers, provides national consistency, promotes safety and quality services, resolves problems, and identifies areas for improvement.
The Commission regulates all aspects of Provider registrations and their responsibilities – and is responsible for improving the quality and safety of services in the NDIS, enabling participants to access services and supports that promote choice, control, and dignity.
The NDIS Commission oversees:
What strategic thinking will help drive success for NDIS Providers?
The boards and management teams of many organisations and businesses evaluating whether to transition to NDIS approved status may need to implement new or different business processes, systems, and technology – and possibly change or redevelop their existing approaches to function in different market driven business practices.
To succeed and thrive in the NDIS environment it will be essential to develop a consumer-driven strategic plan based on stakeholder consultation that aligns the mission of the enterprise with the NDIS Quality and Safeguarding Commission requirements.
Focus Group responses collected from interviewing a range of sector leaders indicates that some enterprises that have successfully transitioned to the NDIS have:
Use these Focus Group observations to think through the implications for your particular business model.
High performing leadership teams know that change is inevitable and realise that coming change needs to be embraced. Change will most probably mean that things will need to be thought of differently and be done differently in order to ensure that their organisation is ready to meet the challenges ahead.
This may require:
Board and management team considerations for achieving or maintaining approved NDIS Provider registration
Good governance and executive management are critical for good business. Leaders need to understand the impact of NDIS changes to ensure that organisations, boards, and executives are compliant with legal and regulatory obligations – and able to achieve financial and business objectives.
By providing consumer choice, the NDIS has presented disability service providers with new and often different governance, managerial and operational challenges.
These include focussing on organisational mission and values, strategy, corporate governance, client services, marketing, financial management and sustainability, workforce planning, information technology, knowledge management, quality management and continuous improvement.
Focus Group feedback from organisations that transitioned (or were contemplating it) to the NDIS also revealed that some key factors that can underpin the success of organisations and businesses include:
NDIS Commission: Provider registration process
Disability Sector guidance for assessing business readiness to transition to the NDIS
National Disability Services (NDS) – the Peak Body for non-government Disability Service Providers – invested significant NSW Government development funding through the Industry Development Funding (IDF) in sector development for the NDIS.
NDS developed a free business self-assessment tool based on a business excellence framework called The NDIS Provider Toolkit (‘The Toolkit’).
That Toolkit was specially designed to assist disability service providers assess their business readiness for NDIS. It was made available in 2014 after the NDIS Act 2013 passed into law.
The NDS Toolkit provides self-assessment exercises that are still current and focus on NDIS business readiness capability across the following key business areas:
Even though the NDIS is a new system that is constantly developing and responding to new and emerging needs as the NDIS embeds, the self-assessment exercises in the 2014 NDS Provider Toolkit do provide useful data on identifying potential gaps from a business and management perspective.
Understanding these gaps will inform decision making by boards and executive management teams on their intent to enter the NDIS or not.
This resource supports NDIS providers to check compliance requirements, be financially sustainable and enhance outcomes for people with disabilities and organisational performance across the above 7 business areas.
An online article (S. Kaplan, January 8, 2018) suggests that the future of not-for-profits is to run them like an innovative business and the author offers five strategies for consideration on how a not-for-profit can re-invent itself:
The big question: To become an approved NDIS Provider or not?
There are two important aspects to making the decision about whether to register as a NDIS Commission approved provider:
These two bodies of work should be undertaken in order to move forward and address the critical strategic issues that must be resolved to facilitate transformation of the organisation and attract NDIS participants who want your unique and desirable services to achieve their individual goals.
Section 2 of this Enhancing Service Provider Governance and Management in the NDIS Toolkit will take a helicopter view of some of the business considerations of transitioning to an NDIS approved and compliant provider status may have on existing service providers and explore key focus areas for leadership bodies to consider.
Section 3 of this Enhancing Service Provider Governance and Management in the NDIS Toolkit will broadly outline the NDIS registration/reregistration processes required – the conditions, regulations etc.