NDIS Bill No. 2- Consultation Report

Last year, the NDIS Quality and Safeguards Commission (NDIS Commission) released a consultation paper on the second round of legislative amendments to the NDIS Act, known as Bill No. 2. The proposed reforms seek to strengthen the NDIS Commission’s powers for monitoring, compliance and information gathering. You can learn more about the paper in Consultation on Bill no. 2.

The consultation feedback comprised:

• 81 survey responses: Interestingly most responses came from workers, sole traders or contractors, followed by providers, then families and carers and participants.
• 51 written submissions: Including from peak bodies, Disability Representative Organisations (DROs), providers and participants.
• 1100 people participated in a Town Hall with the NDIS Commission and Minister with over 600 questions submitted.
• There was also targeted consultation with DROs.

The NDIS Commission has now released its “What we heard” report which gives insight into what people think of the proposed changes. Let’s take a look.

1. New statutory duty for key personnel of NDIS providers
   A new statutory duty would require NDIS provider key personnel to exercise due diligence in ensuring compliance with the NDIS Act. Breaches could attract civil penalties. Two-thirds of stakeholders were supportive of this, a quarter were unsure and around 10% were not supportive. Stakeholders suggested it could improve accountability and foster a stronger culture of compliance within an organisation. Some suggested it should go further and extend to frontline workers. But there was also uncertainty about the scope of the proposed change, who it would actually cover and whether small or unincorporated providers should be excluded. Some suggested it could deter people from stepping into leadership roles or lead to overly cautious decision-making that stifles innovation. Stakeholders said they would need clear guidance on what “due diligence” means in practice, including examples and resources.
2. New statutory duty for NDIS providers
   A proposed new statutory duty of care would require NDIS providers to take all reasonably practicable steps to prevent their services from causing harm to participant's health and safety. Breaches could also attract civil penalties. There was general support for the idea, however, concerns were raised about the additional regulatory burden this could put on providers. Some respondents pointed out that the risk to participant safety and wellbeing often comes from underfunded plans, not because the provider was negligent. Stakeholders asked for clarity around what counts as “harm” and what “reasonable duty of care” looks like. They also raised the risk of overlap with existing Work Health and Safety and Aged Care legislation and stressed the importance of balancing duty of care with participant’s dignity of risk.
3. Increased penalty framework
   The proposed changes would introduce a stronger penalty framework, including higher penalties, new criminal offences and additional civil penalty provisions to deter and address serious breaches of the NDIS Act. Tougher penalties were broadly welcomed (by nearly 70%), but stakeholders stressed that penalties must be proportionate. Small providers could be disproportionately impacted by higher penalties, even when issues are unintentional or administrative in nature. The importance of continuity of support to participants was also raised as a critical factor when deciding whether to impose a penalty. There were calls for the NDIS Commission to have a stronger focus on prevention and education, so providers are supported to meet their obligations before corrective measures are taken.
4. Anti-promotion orders
   This proposed reform would allow the NDIS Commissioner to issue anti-promotion orders restricting advertising that undermines the NDIS, with non-compliance attracting civil penalties. This received overwhelming support, with stakeholders agreeing it was time to crack down on misleading or exploitative advertising. Some stakeholders sought clarity about what constitutes prohibited promotion and how this differs from legitimate advertising. Some also questioned the overlap with the ACCC’s role in regulating consumer law. There were calls for clear guidance on the types of advertising the NDIS Commission would be cracking down on and whether providers would have a right to review.
5. Evidentiary certificate
   It’s been proposed that an evidentiary certificate from the NDIS Commissioner should be accepted as prima facie evidence in court to streamline legal processes. This would mean NDIS Commission resources could focus on participant safety and quality. While this measure attracted less engagement, stakeholders were broadly supportive but felt they needed more information about how certificates would be used, calling for safeguards to ensure accuracy and a right to review.
6. Expansion of the categories of people who a banning order can be imposed on
   Proposed amendments would expand the NDIS Commissioner’s power to issue banning orders beyond providers and staff to include other roles, such as auditors and consultants from working in the sector. Nearly 90% of people supported this, with some suggesting the powers should go even further to include subcontractors, NDIA staff, LACs, training organisations and some decision makers (e.g. State and Territory Guardians). The main concern was the potential for unintended consequences like discouraging people from entering the NDIS market or reducing the willingness of auditors and consultants to give candid assessments of providers.
7. Making the registration condition requirement to provide documents clearer
   A proposed technical amendment would clarify that registered NDIS providers must supply both information and documents when requested by the NDIS Commissioner. There was broad agreement for this change, but stakeholders wanted more detail about what kinds of documents could be requested, in what situations and with what safeguards for sensitive participant information. Stakeholders called for the NDIS Commission to recognise that it is harder for some registered providers to respond to these requests, particularly smaller providers.
8. Shorter timeframe for the production of information or documents
   This proposed amendment would allow the NDIS Commissioner to require providers to supply information or documents within less than 14 days if there are urgent participant safeguarding concerns. Stakeholders were broadly supportive of the shorter timeframes but raised concerns about practicality. Providers in rural or remote areas, providers who use languages other than English and smaller businesses may be disadvantaged. Some expressed concern that short turnaround demands could take focus away from service delivery and other compliance requirements. Stakeholders wanted more information about how these powers would be used and urged the NDIS Commission to work with providers to meet their compliance obligations.
9. Requirement that information be held in Australia
   This amendment would require NDIS providers to hold information in Australia. Most stakeholders agreed with this in principle, but noted the practical challenges. Many providers use global cloud platforms like Google, which don’t offer Australian storage. This change could add significant costs and administrative burden, particularly for smaller organisations. Stakeholders suggested exemptions or alternative compliance pathways, as well as a transition period and financial support to make the shift. Some suggested that providers should be allowed to use reputable international data storage companies with strong security, provided they have an office in Australia.
10. Information Gathering - delegation of rule-making powers
    Prescribed Bodies Rules set out who the NDIS Commission can share protected information with and for what purposes. The proposed change would give the NDIS Commissioner the power (currently only held by the Minister) to make and amend these Rules to enable more responsive information sharing in participant safeguarding and provider regulation. This received mixed responses. Some were supportive of measures to improve efficiency and share information across sectors, while others worried about the risk of giving too much power to the Commissioner without adequate checks and balances. Some stakeholders proposed a requirement for the NDIS Commission to consult on any rule changes under this power.

What’s next

The NDIS Commission will use this feedback to shape an Exposure Draft of the new Bill, giving people another opportunity to provide input. While the draft was initially promised “no earlier than Autumn,” its release is now simply “at a time to be determined by Government.” A familiar story in the world of the NDIS. What is clear from the consultation report is that most stakeholders support strengthening safeguards, but they also want the changes to be fair, transparent and not add unnecessary regulatory burden on providers.