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IAC Report Deep Dive

Todd covers all the need-to-knows from the latest Independent Advisory Council Report including Tier 2 and co-design.

By Todd Winther

Updated 15 Apr 20247 Sept 2021

It seems like only yesterday that the government moved to abolish its proposed plan for Independent Assessments (IAs). The day before Minister Reynolds announced that decision, the Independent Advisory Council (IAC) published a report recommending that the government scrap IAs altogether. From the outside, it appears that the IAC report was the tipping point that fundamentally changed the government’s attitude towards the policy, but the report went beyond that aim. Therefore, it is essential to understand the report’s recommendations to determine what it was trying to achieve.

The IAC report is a concise yet detailed report that assesses the Scheme in its current form whilst providing a way for the government to formulate a policy that will not necessarily look all that different from IAs. The terms of reference for the report were strictly defined, especially regarding IAs. The report’s aim is to provide guidance on how IAs could be implemented, not to determine whether IAs should be implemented.

In some ways, the report does not criticise IAs on their merits. Instead, it criticises the policy development process that led to the failed outcome. In addition, most of the report’s recommendations cleverly operationalise what is fast becoming the most annoying and least understood buzzword in disability policy: the dreaded “co-design”. Now is the perfect time to take a deep dive into the IAC report to examine how they did this and where the IAC’s recommendations could take the NDIS.

Recommendations of note

The 17th and final recommendation, under the "whole of government" heading, encapsulates the thrust of all that comes before it. This recommendation has five distinct parts, which should be implemented together as it examines the concepts of equity for participants and the overall sustainability of the Scheme:

  • The strengthening of Tier 2 with the implementation of an additional and independent budget allocated to the NDIA.
  • Building better pathways for those who have lived experience to have decision-making powers within the Agency.
  • A more equitable and sustainable funding base should be negotiated between governments to fund the Scheme.
  • A reaffirmation of the commitment to the insurance principles of the Scheme.
  • A funded commitment by all partner governments to a strong National Disability Strategy.

The first two points provide the most effective and tangible methods of repairing the Scheme.

Reforming Tier 2

Those who devoured the 2011 Productivity Commission report may remember that Tier 2 was an essential part of it, as it covered those who were not eligible for the Scheme, and despite Tier 2’s decreasing prominence, the IAC did not forget its importance. Tier 2 represents the IAC’s solution to protecting the ongoing cost of the Scheme. The IAC argues that investment in Tier 2 should comprise at least 1% of total Scheme funding. Bruce Bonyhady, a key figure in developing the Scheme, agrees and refers to Tier 2 as an “oasis in the desert”, suggesting that it can act as a bridge to safeguard the equity of the Scheme by ensuring that every participant who needs funding has the opportunity to access it. In her speech to DSC's Where To From Here conference in July 2021, Minister Reynolds shared similar sentiments. However, unlike the IAC report, she did not set specific funding requirements.

The path towards true co-design

Beyond recommending specific policy changes, the overarching theme of the report was the continued marginalisation of participants during policy development.

It is thus worth acknowledging that the IAC currently represents the most powerful body of people with disabilities within the Scheme, given that there are none on the NDIA board. A charitable inference suggests that by adopting the IAC recommendation to abandon IAs, the government was reflecting the opinions, wants, and desires of those with disabilities. The less charitable inference, which is easy to draw by simply reading the report, suggests that co-design is just a buzzword to mollify participants.

The language used in the report concerning consultation was as blunt as the IAC could be under the circumstances. Rather than focusing on criticism, it is better to emphasise that the report offers sensible solutions to the outlined problems. Recommendation 13, for example, discusses developing a compact or partnership agreement between the Agency and people with disabilities. It details and establishes a symbiotic relationship when creating policy via a roadmap detailing how participants and the Agency can play meaningful roles in this process. This granular initiative is one way to ensure that co-design is achievable. However, a co-designed policy would still have to increase economic sustainability and satisfy the government's desire for “reasonable and necessary” reform.

Personalised Budget Models (PBM)

Developing the personalised budget model (PBM) as signalled in the IAC report could present a viable alternative to IAs. Although the report noted that the IAC did not have enough information to comment, it still recommends that a possible PBM remain in line with the current standards outlined in the NDIS legislation and include more consultation with people with disabilities, in the manner discussed above. A PBM would allow the government to adopt many of the same principles it has advocated in the previous 18 months, including a more unified or standardised way of categorising “reasonable and necessary”. A PBM could also place budgetary limits on specific line items, in much the same way the exploration phase of Individualised Living Options (ILO) has been described in the home and living consultation paper.

For a PBM to be both beneficial for participants and economically sustainable, the IAC places several conditions on its development. The first is ensuring that the reasonable and necessary criteria remain equitable and consistent with the foundational principles of the NDIS legislation. Second, a PBM must provide adequate support to allow participants to have a representative or advocate to help communicate their wants and needs. Third, any reasonable and necessary criteria changes must include long-term goals and the current annualised framework. Finally, the planning process must incorporate more safeguards to ensure effective representations for different minority groups to have equitable opportunities.

Nothing about us, without us

The theme of ensuring equity for all people with disabilities is embedded throughout the report. It is profoundly disappointing that its authors were forced to continually criticise the Agency by hammering home this concept. A decade after the Agency’s inception, it should be clear that equity and consultation are necessary concepts embedded within the Scheme However, while pointing out the obvious, the report also demonstrates why the IAC’s continued presence is crucial. The last 12 months, in particular, have taught us that no matter how many stakeholders are involved, no matter the government policy, and no matter the financial implications, people with disabilities and their advocates are essential stakeholders in the policy development process. An inability to recognise this elementary point means that any policy is bound to fail, regardless of its merits.


Todd Winther

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