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Do providers have to ensure reasonable & necessary?

It's difficult to decipher the reasonable & necessary obligations of providers, Rob aims to make sense of the NDIA’s inconsistencies.

By Rob Woolley

Updated 15 Apr 20248 Mar 2022

Here’s a question that could add a whole new layer of compliance requirements to NDIS services: Do providers have a responsibility to determine if the supports they are providing are reasonable and necessary (R&N)? R&N is often treated as the way the NDIA allocates funds into an NDIS plan. But in practice, it’s much more complex. The NDIS Act states that R&N is for the use of planners; however, contradictory communications from the NDIA about the R&N obligations of providers are making the truth harder to uncover. In this article, we will try to find some clarity regarding the R&N obligations of providers.

What’s the official line?

The NDIA’s inconsistency regarding R&N has reached a peak in recent months. While the NDIS Act remains unchanged on R&N, communications from the Agency have cast doubt on how R&N is expected to be managed on the ground. Section 34 of the NDIS Act makes it clear that the only person who can be satisfied that a support is R&N and therefore approve funding for it within an NDIS Plan is the NDIA’s CEO, or their delegate. In practice, “the CEO” or “delegate” means NDIA planners or other relevant NDIA staff members with delegation.

Determining R&N is an important Scheme stewardship function, which is good because R&N is completely unique for every participant. If providers and participants were able to decide what R&N is, then everyone would spend all their funds on sex workers and yachts. Jokes aside, the Agency uses this function as a way of making sure the scheme works as intended. There are currently 502,413 NDIS participants, which translates into 502,413 individual interpretations of R&N. This stance is reinforced in the NDIA Operational Guidelines for Planning, which follows the Act in putting R&N clearly in NDIA’s court. So, if you only read the Act and the Operational Guidelines, you’d be confident that responsibility for R&N starts and ends with the NDIA.

In reality, it’s a lot murkier…

What’s happening on the ground?

So, a person has their NDIS plan with their R&N supports, and now they can go and spend their funds to their heart’s content, right? Let’s start yacht shopping!

Not quite. Whether a plan manager should unquestioningly pay all bills a participant sends them has been a point of contention for many years. Plan Management Rules don’t put any responsibility on plan managers to decide what R&N is, yet some see the role of plan managers as gatekeepers to R&N. The NDIA Guide to Plan Management says, in black and white, “the role of a plan manager does not extend to determining whether supports or services which have been purchased are ‘reasonable and necessary’”. But in the same paragraph, that same Guide to Plan Management says, “the plan manager’s role is to ensure that the plan is being implemented as intended, which includes ensuring that funds are spent in accordance with the plan”. So, plan managers are excluded from determining R&N but are expected to uphold it?! How does that work, exactly?

The rumour mill is currently in overdrive. We’ve heard that the NDIA Scheme Integrity Branch has recently sent out letters to some plan managers highlighting the PM’s responsibilities in how services are delivered and claimed. In some letters, the NDIA reminded the plan manager that they would take action to recover funds if they were spent in a way that the Agency didn't believe was accordance with the person's plan. In the cases we’ve heard about, the funds were spent using the approved and established flexibility across the Core for support relating to the person’s disability.

Taking a look at the NDIA website, giving guidance on different ways of managing funds in a plan, the NDIA states that a plan manager may be liable to repay any amounts that have not been spent in accordance with the plan. Ultimately, plan management is a capacity-building support, and NDIS participants are as entitled to take financial risks as much as anyone else (just look at my eBay purchase history, regrets abound).

There are confusing mentions of R&N dotted throughout the Pricing Arrangements documents as well. These include that providers can only file claims for supports when they are R&N to meet a participant’s needs, and that providers should not file claims for supports that are not R&N. This part is where everyone’s frontal cortex starts to liquidate and drain out of their nose as we all ask, “How on earth would a provider know what is R&N for each participant?”. The NDIA is clear that participants have the right not to give a copy of their NDIS plan or any other personal details to anyone, including a provider or plan manager.

Who wants more? The Australian Tax Office (ATO) also has a requirement relating to R&N. Many NDIS supports are GST-free (see a full list here). To claim the GST free element, the ATO requires providers to have a legally binding agreement with the participant that states that the supply of services is an R&N support, as defined in the person’s NDIS plan. In its guidance resources, the ATO provides examples of how agreements can highlight how funds are listed in the NDIS plan as R&N supports.

Overall, this inconsistency from the NDIA significantly undermines key parts of Scheme governance, and leaves participants, providers, and plan managers between a rock and a hard place.

What can providers do?

Knowledge is power. Although this is clearly a complex issue with contradictory advice from the NDIA across multiple documents, there are some simple steps providers can take:

  • The NDIS Act trumps all other NDIS documentation. Knowing the details of R&N inside-out, as detailed in the NDIS Act, is vital to be able to push back where needed.
  • Get independent legal advice, where appropriate. The NDIS Act is legislation, after all.
  • If the NDIA queries whether a service is R&N, request that they make that enquiry in writing.
  • Page 9 of the Pricing Arrangements lists the priority of interpretation of NDIA pricing documents. So, know which is the higher ranking document if you see anything contradictory about R&N.
  • Beef up any quotes you give participants to take to planning meetings. The more evidence of how it meets R&N requirements, connects with NDIS Outcome Domains, and is the most effective use of funds, the easier it is for a planner to tick the boxes they need to.


NDIA’s inconsistent messaging does little to protect government funds from all those sex yachts. Instead, the confusion has affected an untold numbers of providers and participants across the country, casting doubt among people trying to do the right thing. At the moment, however, the right thing isn’t clear. This is an issue that will run on without a clear position from the government. So, keep an eye out for our future updates on R&N obligations for up-to-date information.


Rob Woolley

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