Consultation on NDIS Bill No. 2

The NDIS Quality and Safeguards Commission (NDIS Commission) has published a consultation paper proposing changes to the NDIS Act, as part of the second round of legislative amendments (Bill No. 2). It seeks to address issues raised in the NDIS Commission’s Own Motion Inquiries, its complaint and incident intelligence and the findings of the Disability Royal Commission (DRC). The NDIS Commission is inviting feedback on the consultation paper, which will be used to inform an exposure draft of Bill No.2. The exposure draft will be published no earlier than Autumn next year.

The NDIS Commission’s consultation paper has proposed 10 measures, which are grouped into three main areas:

Changes to the penalty framework and introducing statutory requirements
Safeguarding measures
Information gathering powers.

So let's dive into what’s on the table.

1. New statutory duty for key personnel of NDIS providers

All registered NDIS providers are required to nominate key personnel who are responsible for the executive decisions and activities of the organisation. The DRC found cases where key personnel failed to take adequate steps to ensure their organisation complied with their obligations under the NDIS Act, Rules and Practice Standards. The DRC found some key personnel had not sufficiently prioritised risk management or taken accountability for the safety of participants. Examples included failing to ensure adequate training, oversight, and investigation of incidents and complaints.

Under the proposed new duty, key personnel would be required to exercise due diligence to ensure compliance with their obligations under the NDIS Act. Breaches would attract a civil penalty.

2. New statutory duty for NDIS providers

The NDIS Commission says some NDIS providers are not taking appropriate steps to ensure their actions don’t harm participants. This obligation is built into the NDIS Code of Conduct, but the Code is reportedly not having the intended influence. The DRC raised concerns about NDIS providers not taking responsibility for the safety and wellbeing of participants. The DRC found many cases of providers poorly monitoring participant health and wellbeing, sometimes resulting in a health condition worsening without intervention and access to proper medical treatment.

The proposed new statutory duty of care would require NDIS providers to ensure (so far as is reasonably practicable) that their conduct does not cause adverse effects to the health and safety of participants. A breach of this duty would attract a civil penalty.

3. Increased penalty framework

The NDIS Commission believes that the current penalty framework under the NDIS Act is insufficient in deterring poor practice or adequately penalising the harm caused by some providers. The consultation paper claims there is a significant difference between the penalties under the NDIS Act and work health and safety legislation for incidents that result in the serious harm or death of a person (though it doesn’t mention that participants also have protections under WHS law). For example, a breach of the NDIS Code of Conduct carries a maximum penalty of $412,500 (per breach), whereas a breach of work health and safety legislation carries a penalty of up to $15 million.

The NDIS Commission is concerned that unscrupulous providers may view current penalties as just the cost of doing business. The higher penalty framework is designed for courts to be able to impose greater penalties to reflect the seriousness of a breach and deter other bad actors. The proposed penalty framework also introduces new criminal offences.

Proposed new criminal offences include:

Serious failure to comply with conditions of registration
Providing supports that require registration without registration
Failing to comply with a banning order.

Proposed new civil penalty provisions include:

Failing to comply with requirements to give information
Providing false or misleading information or documents for the purposes of the NDIS Act
Contraventions of requirements relating to the use or disclosure of protected Commission information
Aggravated contravention/s of the requirements attracting civil penalties under the NDIS Act.

4. Anti-promotion orders

The NDIS Commission is concerned about exploitative and inaccurate advertising for financial benefit. Examples include shopping coupons that deliberately mislead people on how NDIS funds can be used. The NDIS Commission says this is particularly common in Short Term Accommodation, where “paid by NDIS” holidays are sometimes advertised.

Specialist Disability Accommodation (SDA) providers could also be targeted for making exaggerated claims about potential SDA profits to mislead investors. This is said to have a negative impact on the market, potentially leading to vacant homes, and accommodation being built in the wrong places or without demand.

Under the proposed changes, the NDIS Commissioner would be able to issue an anti-promotion order to restrict a person from advertising or marketing NDIS services that undermine the integrity and principles of the Scheme. Prohibited conduct will be specified in NDIS Rules and failure to comply will also attract a civil penalty.

5. Evidentiary certificate

NDIS Commission officers reportedly spend a lot of time preparing affidavits and attending court to give evidence about the registration status and history of a provider. For example, when the NDIA takes a provider to court for fraud, NDIS Commission officers need to be on standby, draining NDIS Commission resources. The proposed amendment would allow an evidentiary certificate signed by the NDIS Commissioner to be accepted as evidence. This would make it quicker and easier for the NDIS Commission to provide evidence regarding generally uncontroversial matters. However, if someone wished to challenge the evidence they would still be able to do so.

6. Expansion of banning order powers

Under the current legislation only NDIS providers, employees and key personnel can be issued with a banning order. The NDIS market has a number of other players operating as business advisors, consultants and auditors, who can influence the direction and operation of NDIS service providers. Under the proposed changes, advisors, consultants or auditors could be banned from operating in the broader NDIS ecosystem, if they are found to be providing advice that is fraudulent, unsafe or contrary to the intention of the NDIS.

7. Making the registration condition requirement to provide documents clearer

This is just a proposed technical amendment to ensure that the NDIS Commissioner can request both information and documents from providers under the NDIS Act.

8. Shorter timeframe for the production of information or documents

Currently, the NDIS Commissioner must give providers at least 14 days to comply with requests for information or documents. Under the proposed amendments, the NDIS Commission could shorten the timeframe when they have participant safeguarding concerns.

9. Requirement that information be held in Australia

There is currently no requirement for NDIS providers to hold information within Australia. When a provider’s information is cloud-based and held overseas, it might not be readily accessible when the NDIS Commission makes a request. The Commission’s powers to obtain information held overseas are limited and slow.

Under the proposed amendments, NDIS participants would remain free to access NDIS support delivered by providers outside Australia, however all providers would be required to hold the information within Australia regardless of where they are based. The NDIS Commission says holding information in Australia on Australian-based servers is a standard requirement for many Government-funded services.

10. Information gathering – delegation of rule-making powers

It is proposed that the NDIS Commissioner be able to use the existing Ministerial power to make and change Prescribed Bodies Rules. The NDIS Commission says this technical change is being proposed to bring this particular NDIS Rule-making power into alignment with the other NDIS Rule-making powers that the NDIS Commissioner already has. It is intended to facilitate information sharing to support the safeguarding of participants, market oversight and regulation of NDIS providers.

How can you get involved?

The NDIS Commission is keen to hear your thoughts on the 10 proposed measures and any other ideas to improve the quality and safety of NDIS supports.

The Commission is hosting an online Ministerial Town Hall event on the 27th November, which will be an opportunity to hear directly from Minister Bill Shorten, the NDIS Commissioner Louise Glanville, and Associate Commissioner Natalie Wade.

The NDIS Commission has also published questions to its discussion paper on its website and is calling for submissions which close 20 December 2024.

Find the full consultation paper and set of questions on the NDIS Commission's Reform Hub.