Overview of the National Disability Scheme
What is the National Disability Insurance Scheme (NDIS) – A snapshot
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.
- NDIS website: What is the NDIS
- Parliament of Australia: ‘A brief official history of the NDIS – The National Disability Insurance Scheme: a chronology’
- Parliament of Australia: ‘The National Disability Insurance Scheme: a quick guide’ (2017)
- Tool 1.1: NDIS Quick Guide
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.
“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:
- NDIS Commission-Face sheet: NDIS Commission then and now snapshot February 2019
- NDIS Commission – Fact sheet: NDIS National approach infographic
Tool 1.2: Then and now fact sheet
- Tool 1.3: Snapshot Comparisons NDA vs. NDIS
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.
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:
- The objects and principles under which the NDIS will operate.
- How a person can become a participant in the NDIS.
- How a participant’s individual, goal-based plan is prepared and reviewed – including how the NDIA approves the funding of reasonable and necessary supports.
- How a provider can become a registered provider of supports.
- The governance arrangements for the NDIA – including its CEO, Board, Independent Advisory Council, and Actuaries.
- A process for internal and external review of certain decisions made under the NDIS Act.
- Australian Government. Federal Register of Legislation: ‘The National Disability Insurance Scheme Act 2013
- NDIS Legislation: The NDIS Act
Tool 1.4: NDIS Act 2013
- NDIS Commission: Your Guide to legislation, rules and policies
TOOL 1.5: Your guide to NDIS legislation
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 Commission: Welcome to the NDIS Quality and Safeguards Commission – start your journey here
TOOL 1.6: Welcome to NDIS commission
- NDIS Commission web site
Note: There are home page menu options including links for NDIS Participants, NDIS Providers, Resources and other).
- NDIS Commission web page: Fact sheets and Resources
- NDIS Commission Fact sheet: About the NDIS Quality and Safeguards Commission
Tool 1.7: About NDIS Commission
- NDIS Commission Fact sheet: NDIS Commission – what does this mean for providers
Tool 1.8: NDIS Commission – what does it mean
- NDIS website: The role of the NDIS Quality and Safeguards Commission
- NDIS Commission: Welcome to the NDIS Commission (standard and Auslan videos)
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:
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:
- Revisited and consulted with all stakeholders about their mission, values, and philosophies before making an informed decision about whether registration as an NDIS provider aligns with their goals or not.
- Accounted and planned for the financial implications of sustainably moving from advance block funding to invoicing approved NDIS Participants plans in arrears.
- Implemented effective evidence-based change management strategies to guide the transition process.
- Created positive employee and client cultures while managing change and transitioning to a new way of working in the new market-driven business environment.
- Implemented or upgraded integrated business systems such as IT, Data Management, Risk mitigation, Quality and Compliance management, Workforce Planning and Training.
- Created their point of difference or unique brand – and marketed and communicated their unique service offerings effectively to attract NDIS participants in the competitive NDIS market.
- Ensured rights-based and person-centred approaches to engagement of and with all stakeholders in every interaction.
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:
- Strategic thinking rather than thinking about only now or the short term. This means being aware of the environment outside of the organisation and understanding what the organisation needs to do to remain relevant and viable and delivering on its mission.
- Aligning and re-aligning people and practices for how things are done – putting thought into how the organisation can be made ready and able to deal with the dynamic challenges, opportunities, rises and falls of society.
- Creating a culture of engagement and connectedness by building the capacity of the organisation to really engage with clients, agencies, communities, funders, government, competitors, and other stakeholders.
Note: Refer to Section 2 of this Toolkit for more detailed information to support strategic thinking.
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 focusing 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:
- Understanding the legislative and policy frameworks that are built in to regulate the NDIS market. This includes the NDIS Quality and Safeguarding Framework and understanding increased accountability under the NDIS Quality and Safeguarding Commission in terms of mitigating risk and managing compliance.
- Understanding the key government agencies that administer the NDIS and connecting to them.
- Recognising and planning for the financial implications of transitioning from the pre-NDIS block funding paid quarterly in advance to providers, to individualised funding for each NDIS participant paid in arrears and where invoicing after service has been delivered. This shift can impact financial stability.
- Coming to grips with the implications of developing the service to better compete with other service providers in the consumer driven business environment. This is a new way of thinking for not-for-profits – re-imagining competitors as potential business partners for example.
- Revisiting and possibly adjusting one’s approaches to marketing targeting niche participant markets and workforce skill development including developing the competencies of managers and boards and implementing new systems and technology.
- Recognising that new behaviours will be required to operate successfully in the business model environment.
- Driving, facilitating, and sustaining positive change and new and different behaviours in what is considered a turbulent environment.
NDIS Commission: Provider registration process
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:
- Corporate Governance.
- Clients and Market Focus.
- Financial Sustainability.
- People and Capability.
- Safeguarding, Quality Management & Improvement.
- Information and Knowledge Management.
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.
- NDS Resource: NDIS Provider Toolkit can be accessed and downloaded in PDF or accessible format
TOOL 1.9: NDIS Provider Toolkit
- NDS Resource: NDS Business Analysis Tool
TOOL 1.10: NDS Business Analysis Tool
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:
- Think like a business. Assume your funding will dry up within the next year. How would you self-fund your activities? Could you sell a product or charge for a service?
- Redefine ‘customer’. In addition to those you serve, consider who could become a paying customer. Who has money that would buy something you have to offer related to your world-changing mission?
- Package up offerings. Think creatively about what you ‘sell’, whether a product, service, event, or experience. What could you do to add value to people’s lives (that they would pay for)?
- Don’t go it alone. Innovation is about partnerships. What are the for-profit companies that could provide you with resources or revenue in return for positive press or promotion from working with you?
- Create a sustainable business model. Measure your organisation like a business. What percentage of revenue will come from revenue-generating activities, and how will this evolve over time?
There are two important aspects to making the decision about whether to register as a NDIS Commission approved provider:
- Understanding what impact transitioning to an NDIS approved and compliant provider status may have on existing non-NDIS service providers, and
- Understanding the registration process required – the conditions, regulations, and the possible costs of adapting the organisation to meet compliance and quality obligations.
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.