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ILC: Kneecapping the NDIS

DSC is getting lots of calls from organisations confused about how the ILC program will operate. Sadly, once you understand the fundamentals of ILC and LAC, confusion is replaced with serious concern. Roland outlines the major failings of the ILC program design - and how a failure to address these might just kneecap the NDIS.

By Roland Naufal

Updated 15 Apr 202416 Jan 2017

The ILC roll out commences with the first (ever) round of funding available for both ACT and national ILC initiatives, commencing late January. DSC is getting lots of calls from organisations confused about how the ILC program will operate. People want to know what the program is really about and understand its relationship to Local Area Coordination (LAC).

Sadly, once you understand the fundamentals of ILC and LAC, confusion is replaced with serious concern. In a nutshell: the ILC will be a very significant underachiever for at least the next couple of years. The majority of ILC funding has been put into an ineffective LAC approach and the remainder of the funding is way too small to fit the scale of the program’s ambitions.

The sector is just starting to undergo the seismic shifts that will result from the NDIS shift to individualised funding. We are certain that a large number of organisations that do fabulous ILC/LAC style work will go broke in the next 2 to 3 years.  When these groups go, so many of the community connections that have been built over the decades will be lost and the chaos for participants (and those with disability who are not NDIS eligible) will get a lot worse.



The ILC is a foundation stone of the NDIS; in fact the NDIA describe it as ‘one of the two parts’ of the NDIS. One part is individualised funding (NDIS plans for 460,000 people), the other is ILC.

ILC is the part that is needed when a block funded system shifts to individualised plans. It is essential in the new NDIS market where individual’s needs for ‘access type’ assistance will greatly increase. Everybody from the Productivity Commission to the NDIA Board has recognised that the move to NDIS individualised funding must be accompanied by (non individualised) programs that facilitate access and connection to supports. The NDIA tell us the ILC is needed for:

  1. Personal capacity building: making sure people with disability and their families have the skills, resources and confidence they need to participate in the community or access the same kind of opportunities or services as other people.
  2. Community capacity building: making sure mainstream services or community organisations become more inclusive of people with disability.

DSC has been arguing from the start that there is nowhere near enough funding (see ILC: A Serious Imbalance) to achieve these goals, a sentiment echoed recently by Bruce Bonyhady: 

“Currently only $132m has been allocated to the ILC. This is not sufficient… one of the key foundations on which the NDIS is being built is weak”.

The lions share (over $550 million) of the original ILC funding was allocated to LAC and the hope was it would perform a lot of the key ILC community inclusion functions.

So, with a measly 0.6% of the NDIS budget remaining for the ILC program (the second part of the NDIS), achieving its vital goals becomes an impossibility.



The NDIA states

LACs have three important jobs:

  1. Connect people who have plans into mainstream services and community activities and get their plan into action,
  2. Assistance to people who do not have a plan (short term) to connect into mainstream services and community activities,
  3. Make communities more accessible and inclusive for people with disability.

The context of each of these ‘three important jobs’:

The relatively small number of NDIS participants already in the system are not getting the assistance they need to find and access mainstream services, so what will happen when demand really kicks in?

Around 900,000 people with a disability will not have a plan and will have their supports eroded as the NDIS replaces state based funding supports, disadvantaging about double the number of total scheme participants.

The NDIS and its insurance approach is built on supporting people into more inclusive mainstream services; the scheme will be an epic fail without adequate support for mainstream inclusion.

The hope was that LACs would fulfil these three jobs. That might have been possible, until the Federal Government forced the outsourcing of LAC and the NDIA added insult to injury by giving LACs the Planning function to do in their spare time. DSC has said so many times, this will not work and now in practice we can see: it does not work.

The pace of the roll out means new plans are meant to be created at a rate of 2,000 a week (and remember, plan reviews were meant to occur every 12 months as well as on demand). Planning has taken over the LAC role; they have been ordered to focus on getting plans done (however badly). This work eclipses the community inclusion (ILC) work. LACs are simply too bloody busy with this huge and urgent task to also undertake the complex community development function in any meaningful way. And what will this mean for the poor bastards who are not NDIS eligible that the LACs are meant to be assisting in their free time?

The remaining hope for LAC is that when the main planning role has finished, they will have time to get back to their other jobs.  Well, that’s about 2 to 3 years away and what happens in the meantime? People with disability will bumping around a new, complex system without the supports they need (and that everyone originally thought were going to be part of the scheme). We are off to a very poor beginning, and the prognosis is: LAC seems unlikely to recover.



With the clear incapacity of the LAC role to fulfil ILC functions, ILC funded programs are needed to fill the LAC gap. Unfortunately, the NDIA’s approach to the current ILC funding (outlined in the funding guidelines) may hamper some potentially great programs from getting up:

“There are some things that we will not fund in ILC… We will not fund organisations to carry out activities that duplicate the role of the LACs.”

Duplicate what?  A function not being done!

What do we know about the ILC funding? The ILC budget is now to be split between the recently announced Jurisdictional and National Readiness grants programs (more detail click here).  Basically, this means organisations will be able to apply for non-recurrent, non core, non advocacy funding to develop fabulous low budget ILC type ideas, either locally in the ACT (this year) or to develop programs with national ambitions. Organisations will also need to demonstrate that they do not replicate LAC work, and that their work is scaleable and able to quickly achieve community development outcomes with short term funding. That's adds up to a pretty big ask.

With so many problems, why is DSC running a forum on how to apply for ILC funding on 3 February? Because however inadequate the funding, this is absolutely vital work. There are still many opportunities to support fabulous existing and new programs in the ILC space. We want to support organisations to understand the program and develop ILC proposals that are based on collaboration, experience and best practice.

DSC also wants to continue to argue for a massive rethink of the ILC before it becomes another mess of NDIS style epic proportions. Is anyone out there listening?


Roland Naufal

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