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Calls for Radical NDIS Redesign

Jess dives deep into DANA’s latest report: 'Redesigning the NDIS, an International Perspective on an Australian Disability Support System' and what it says about the current and future state of the NDIS.

By Jessica Quilty

Updated 15 Apr 20244 Sept 2023
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Disability Advocacy Network Australia (DANA) has launched a fascinating new report entitled Redesigning the NDIS, an international perspective on an Australian Disability Support System. DANA commissioned Dr Simon Duffy of the Self-directed Support (SDS) Network and Citizen Network to compile the report in time for the NDIS Review. The report, which was co-authored by Summer Foundation’s Dr Mark Brown claims the NDIS for all its achievements, is not living up to its full potential and needs an urgent and radical redesign.

Sustainability fundamental?

While the NDIS is a world-leading scheme for disability rights, the report says that it suffers from significant design flaws that international audiences are unlikely to emulate. With scheme expenses estimated to be 1.48% of GDP in 2022-23, increasing to 2.55% in 2031-32, higher levels of taxation or cuts to other public services are said to be inevitable. The report questions whether increased NDIS spending is actually a measure of how well it meets people’s needs. Arguing that costs can also be symptoms of waste, duplication and bureaucracy, with the interest from private equity signalling real reason for concern.

The report cites a phenomenon sometimes called the tragedy of the commons— ‘when society doesn’t ensure the sustainability of a common good and individual behaviour works against what is in everyone’s best long-term interest (Hardin, 1968).’ p19.

The report suggests that this is not just an economic problem, it risks breaking down trust between people with disability and society as a whole and will ultimately undermine political will. It warns that NDIS participants may begin to be viewed as unfairly privileged, which could ultimately increase stigmatisation. 

The report also argues that this does not just affect Australians. The world is watching how Australia does the NDIS. If it is not designed in a way that demonstrates sustainability, international observers may conclude that it is too difficult to take disability rights seriously and a rationed approach is as good as we are going to get.

A flawed system? 

The report argues strongly that the design of the NDIS is flawed and that it is in conflict with its own purpose.  It says this would be the case even if resources were infinite, but as they are not, the NDIS will become increasingly costly risking its survival in the long-term.

The authors recognise that these beliefs are not shared by everyone and that some believe the current system can be fixed by increased resourcing, NDIA staffing, validated assessment tools, computer systems, returning to Local Area Coordination principles or other technical fixes. However the report argues that these will not address what is has identified as the five major problems with the NDIS which can be summarised as:

  • The overall budget for the NDIS being open-ended means increased costs are passed on to the government and then the taxpayer. 
  • Resource allocation is unclear, people are not given clear and well-defined entitlements or long-term security. This means that people are forced to keep claiming what they may need—in case they don’t get what they do need. 
  • The level of funding in each person’s plan is determined, not by need, but by the price of services set by the NDIA. Service providers, whose funding is subject to the same insecurity, must maximise their prices and help people access NDIS funding to fund them. 
  • The NDIA reduces funding if there are other forms of support available from the community. This means that communities benefit by withdrawing support, and by helping people claim against the NDIS instead. 
  • The role of the NDIA is focused on controlling spending through rules, which are likely to drive more fear and insecurity into the system creating further cost pressure.

The report argues that this is why the system can feel so painful for participants. People must jump through ever-changing hoops, because the hoops are the only tool the system has to try to control costs. The report argues that the poor participant experience and the ever-growing costs of the NDIS are two sides of the same problem. A badly designed system that creates cost inflation and undermines responsible action at every level. 

Who’s to blame?

It's the system man! The report argues that the NDIS incentivises states and territories to withdraw services to reduce the pressure on the state’s own tax payers. It also recognises that while people are quick to blame skyrocketing costs on service providers, providers are just trying to survive in a volatile environment. The system places the responsibility on service providers and participants to negotiate prices below the NDIA’s own published cost units. Yet for many participants and their families, the service provider has been their longest-standing ally making these negotiations difficult. Moreover, because of these deep relationships many service providers provide unpaid services from time to time. Anticipating this, as well as ever changing funding rules and financial insecurity, they seek to build a financial buffer into their margins.

The report is very clear that this is a system problem and blaming people with disability, families, communities, services, states or public servants is the wrong response to this kind of problem. 

NDIS, a barrier to inclusion? 

The report also raised concerns that once someone is deemed eligible for the NDIS, the primary way to help them overcome any barrier they face is to seek more NDIS funding. It argues that many people do not need extra paid support, what they really need is greater inclusion and sensitivity. 

Duffy remarks that from an outsider’s perspective, the designers of the NDIS had an unusually high level of confidence in the ability of a centralised agency to deliver significant social reform through funding rules and packages. He suggests that the “NDIS has depopulated the world of inclusion”.  Instead of giving people a stable and flexible funding allocation to live their lives, the NDIS requires them to invent goals to justify the funding that is inextricably tied to services, even when that is not always what they need.

‘Instead of incentivising creative action across the whole community, the current NDIS design behaves as if the NDIA is the architect of citizenship, treating an administrative planning process as a substitute for finding your way in the world. Instead of encouraging the creation of a more inclusive, accessible, and accommodating Australia, it creates a separate parallel NDIS world, especially for people with disabilities. This means that the NDIS is not just financially unsustainable, it also undermines the vision for inclusion and citizenship that actually inspired the creation of the NDIS. It is self-defeating. It is time for a very different approach.’ p28.

The report identifies that it is very hard to measure what the NDIS has achieved. It suggests that a true measure of success would be for more people with disability to take their rightful place as full and equal members of Australian society. 

NDIS 2.0

The report calls for a radical redesign of NDIS 2.0 that builds in several essential features to ensure it is effective and sustainable. This includes treating people as citizens with rights and freedoms, encouraging people to grow their ‘Real Wealth’ (see page 33 of the report), respecting communities as essential to achieving citizenship and to value, not prioritise the role of professionals.

The report argues that NDIS 2.0 needs to focus on three zones: citizen innovation, community innovation and professional innovation, and suggests four urgent reforms:

1. Create a system of personal budgets and self-directed support to ensure everyone has clear and meaningful entitlements they can control. 

The report argues that the current system, while individualised, does not maximise everyone’s level of control. It recommends that everyone should be treated as self-managing but supported by the system that they need to do this. After 60 years of development of self-directed support models, experience shows that one of the most important features of effective self-management is that people have a clear personal budget. Currently the NDIS does not give people a real budget, because they're not truly free to pursue good outcomes, take risks or get creative - it is all tied to an NDIS plan and rules. This also limits opportunities and incentives to find efficiencies and cost savings. 

So what ideas are on the table?  

  • Replace a line by line budget allocation with a real budget based on need, correlated to broad descriptions and subject to reasonable human judgements with accountability. 
  • By understanding their budget, people could work with their support network to determine (and adjust) what they need for their lives.  
  • A process of checks and balances could be created to help people to revise their budget if it's not working for them. 
  • The report suggests most people would need a lower budget than what they currently have.
  • A transparent system would enable better cost control, provide clearer evidence on what is working, what needs to change and enable meaningful negotiations at the federal level.

The report notes that given cost pressures, the NDIA will be concerned about transparent resource allocation. Many participants will also be fearful of a system that is too simplistic. However, Duffy says his experience of designing transparent and flexible systems is that they can bring benefits for both parties. For example, in England they found that people mostly worked within their initial budget and saw significant life improvements. Of the minority who wanted to amend their budget, most thought their budget was too high and they could move to a lower one. Duffy remarks: ‘I suspect that this is because people with disabilities, like most citizens when they are treated with respect, are highly responsible and want to ensure that there is no waste. It helps if people believe that any savings that they help achieve are going to benefit others.’ p.41.

Other suggestions include ensuring support is available to those on the fringes of current NDIS eligibility, higher budget security, allowing participants to bank savings, and abandoning the bureaucratic NDIS plan. Talk about a revolution!

2. Encourage peer support at every level, particularly for people with disabilities and families, to enable them to get mutual support and to drive the process of community change. 

The report highlights that the most sustainable progress towards advancing people’s rights comes from collective, not individual action. Peer support helps people to connect with, get support from and give support to other people living through similar experiences. 

The report suggests that peer support could also be built into existing processes for helping people claim and manage their NDIS budgets. For example, the NDIA and Local Area Coordinators could encourage people to offer peer support and refer people to those willing to provide it. The report argues that there is no reason why the process of engaging with the NDIA should not be peer-led. 

3. Make the funding system sensitive to communities of place and culture and increase the opportunities for communities to create new solutions for inclusion. 

As discussed earlier, the report claims that the current NDIS design has depopulated inclusion. That the centralisation of power and responsibility within a federal bureaucracy, combined with the limited choice and control offered to people with disabilities, is not enough to create the kinds of communities we need to ensure everyone can be a full citizen. 

It suggests that the rise of fraud is symptomatic of the impersonal nature of the current system. As fraud grows in a system of hierarchy and lack of accountability, keeping things smaller, more human and transparent is said to be the best protection against such abuses. 

The report outlines each of the important roles different stakeholders play in building inclusive communities, including families, schools, neighbourhoods, business and civil society, state and local governments. The challenge will be to create a system where all of these groups are motivated to support the rights and inclusion of every person with disability (including those not on the NDIS). One possibility suggested would be to create community wealth funds for inclusion which are managed at a local level and led by people with disability. This fund could be used flexibly, without being subjected to clawbacks, where savings, income generation and efficiencies could be safeguarded for the benefit of the community.

‘Innovation is only possible if you have the means to do things differently, and it is only likely when you have a natural incentive to do things better. This is true for citizens, it is true for organisations and it is true for government.’ p. 49

4. Establish a system of collective governance for the NDIS, enabling open discussion and negotiations on available resources and strategy.  

The report recommends that people with disability should have a central role in negotiating the overall level of resources committed to the NDIS and the frameworks for its distribution. It suggests the NDIS needs to be held accountable, not just for its cost, but also for its effectiveness at helping people achieve citizenship and supporting communities to advance inclusion. This requires rules that ensure states, communities and other allies share positive incentives to manage resources effectively.

To this end, the report recommends:

  • People with disabilities co-create NDIS 2.0.  
  • NDIS 2.0 is designed around a sustainable budget based on current evidence.  
  • NDIS 2.0 delivers meaningful and secure entitlements that individuals can control. 
  • The criteria for defining individual entitlements are clear and open to review. The testing of individual entitlements should be balanced with community entitlements, and managed by people with disabilities in their own communities.

NDIS 3.0

And if that wasn’t enough to get your head around, the report doesn’t stop there. It suggests we need to start looking even further into the future with a more universal approach to progressive social change. Ideas include:

  • Prevention and inclusion - The main focus of the NDIS has been on providing services to people with a "permanent and significant disability”. Excluding people with lower needs from NDIS can easily become self-defeating as their needs increase without support and over time they become eligible. Rapid and low-cost support integrated into local communities could be a worthy investment. 
  • Integration with Aged Care - The report challenges the notion of treating disabilities acquired before or after the age of 65 as requiring fundamentally different social policies. It argues that the existence of unduly institutional care for older people increases its legitimacy for everyone.
  • Integration with basic income - The report argues that there is a global movement towards the creation of a system of universal economic security, called basic income. This means that everyone would be guaranteed enough to live on. There may even be a case that NDIS budgets, disability benefits and basic income could be brought together into a system called basic income plus (you can read more about this concept here).
  • Disability and gender - Internationally, there is increasing awareness of the need to understand disability’s intersection with the rights of women. Support (paid and unpaid) is primarily done by women and where paid, at lower salary rates. It argues a system of universal basic income might also provide a better foundation for gender equality.
  • Neighbourhood democracy - Local government might play an active role achieving inclusive communities rather than focusing on centralised bureaucracies. The report says while the current systems of local democracy may be insufficient, perhaps we should start to reimagine the role and function of localised democracy in supporting our citizens.

The report concludes with:

‘The ideal of Every Australian Counts is fantastic. The creation of the NDIS has taken Australia closer to making this ideal real and it has raised the global bar for disability rights. Today the challenge is to root the NDIS more deeply in the soil of Australia, to ensure it can be sustained and valued by all Australians and that it plays its role, not only so that all people with disabilities can achieve their rights, but so that people with disabilities can play a full role in establishing and protecting the rights of all. Every Australian does count and every Australian needs to play their part in making this true.’ p57.

Want to learn more? 

This international perspective is as thought provoking as it is challenging and just how it influences NDIS 2.0 remains to be seen.

To learn more you can join DANA, Dr Simon Duffy and Dr Mark Brown today Monday 4 September 12:00PM – 1:30PM AEST for an online briefing and in-depth discussion about the report – register via Eventbrite.

You can also hear more from the authors by tuning into the Reasonable and Necessary Podcast with Dr George Taleporos. 

Finally, this is also just a summary of some of the themes that stood out for us - there is much more to read in the full report below 👇

Duffy S & Brown M (2023) Redesigning the NDIS: An international perspective on an Australian disability support system. Sheffield: Citizen Network Research.


Jessica Quilty

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