New Management of Funding Rule

In December last year, the government legislated a new Management of Funding Rules, which helps operationalise a new section of the NDIS Act. The Act now enables the NDIA to prevent a person from self-managing their plan if the Agency believes the person is likely to spend their funding on non-NDIS supports or not in accordance with their plan. The Rule is a legislative instrument that provides more information about how the NDIA should operationalise the law and what factors they must consider.

Then, just last week, the Department of Social Services published a plain English summary of an amendment to the new Rule. DSS’s proposed amendment would address what the NDIA must consider when deciding if Self-Management would pose an unreasonable risk to the participant and whether a participant should be allowed to use a Plan Manager. But these amendments are still being negotiated with the states and territories, and are subject to change.

Amending a one-and-a-half-month-old Rule is a bit strange. Could they not hang tight and publish it all in one go? It’s an add-it-as-you-go model of legislating. But, honestly, I don’t hate it. I might take the inspiration and just write half of this article- it can be finished in Feb! There are worse ideas.

The NDIS Act- When participants can’t self- or plan-manage

First up, we need to look at the new NDIS Act. Most of the time, the NDIA has to honour a participant’s decision on how they want to manage their NDIS funding. However, the new legislation has expanded circumstances when the NDIA can not allow a person to self-manage or use a plan manager. A participant or plan nominee can’t self-manage if:

The person managing the funding is insolvent or under administration
The person managing the funding has been convicted of an offence that carries a more than 2-year jail term or involves fraud or dishonesty.
The NDIA believes self-management would pose an unreasonable risk to the participant. Unreasonable risk is not defined in the Act, but will be explored more in the Rules (we’ll cover that shortly).
Allowing a person to self-manage would break the NDIS Rules- there is no more information on what this might look like.
The NDIA believes that the person managing the funding would be unlikely to comply with Section 46 of the Act. Section 46 says that participants must spend their funding on NDIS Supports and in accordance with their plans. The new NDIS Rules outline what the NDIA would need to consider when reaching this conclusion (see below).

As you can see, some of these criteria are quite subjective. One person’s unreasonable risk is another’s dignity of risk. So the Rules are meant to provide more guidance to inform the Agency’s decision making.

Similarly, the NDIA can’t allow a person to use a Plan Manager, if the NDIA believes:

It would pose an unreasonable risk to the participant
Section 46 would be unlikely to be complied with.

Deciding if someone is likely to spend NDIS funding in accordance with their plan and on NDIS Supports

The new Rule says that when deciding if someone is likely to comply with Section 46 (spending on NDIS Supports and in accordance with their plan), the NDIA must consider:

The person’s history of complying with Section 46. Ie. Have they previously spent their funding on any non-NDIS supports? Or not followed the conditions outlined in their plan?
Whether the person has complied with past requests for information from the NDIA. And if they didn’t provide the information, whether they made a reasonable effort or had a good reason.
If the person has a history of fraud or mismanaging funds.
The person’s capacity to manage their finances, taking into account any supports they might have.
If the person has been subjected to exploitation or undue influence when managing legal or financial matters.
Any matters raised by the plan nominee or participant that the NDIA considers relevant.
Anything else the NDIA considers relevant (you can’t say they’re not keeping their options open!).

Unreasonable risk to the participant

Last week, DSS published a plain English summary of the changes they want to make to the Managing of Funding Rule. These changes would outline things the NDIA must consider when deciding whether self-management would pose an unreasonable risk to the participant. The content of this part of the Rule is still being negotiated with the states and territories, and might be subject to change.

Nevertheless, the proposed changes say that in deciding whether self-management poses an unreasonable risk, the NDIA must consider:

Whether the risks could be managed through supports in the participant's plan, or the participant’s informal, mainstream or community supports. For example, a participant who struggles with financial management might receive support from their parents when managing their NDIS funding, or the NDIS could fund financial literacy classes.
If risks have been managed in the past using supports, safeguards or strategies.
The types of support that are in the participant's plan. For example, the NDIA might decide it is an unreasonable risk for a person to manage their life-sustaining supports. However, the person might still be able to manage funding for their lower-risk supports.
The extent the participant is at risk of experiencing physical, mental or financial harm, exploitation, influence or pressure. Interestingly, in DSS’s example, a participant or a plan nominee who has been financially exploited before might be considered vulnerable to future manipulation, even if they are no longer in contact with the person who exploited them in the past. The summary says the NDIA would consider the scale of the exploitation and what has happened since. I’d like to know if the NDIA will consider how often a person has been financially exploited. As falling for a wily scammer one time doesn’t necessarily equal a pattern of behaviour that will be repeated.
The person’s ability to manage money, taking into account the support they have.
Whether a court has ordered another person to manage the participant’s money or property. For example, if the participant has a Guardian or Public Trustee, the NDIA will align plan management decisions with the court order.
Any matters raised by the participant or plan nominee that the NDIA considers relevant.
Anything else the NDIA considers relevant.

Considering whether a person can use a plan manager

The plain English summary released by DSS also includes things the NDIA must consider when deciding whether a person can use a plan manager.

Similar to the criteria above, the NDIA must consider:

Whether the risks to the participant could be managed through supports, safeguards and strategies. For example, a participant might not be able to access the internet to approve invoices. But if a family member could help them access the internet, this risk might be managed.
If the risks have been managed in the past.
The extent to which the participant is at risk of experiencing physical, mental or financial harm, or exploitation, influence or pressure.
Anything raised by the participant or plan nominee that the NDIA considers relevant.
Anything else the NDIA considers relevant.

What the NDIA can’t consider

For all of these decisions, the NDIA can’t take into account:

The nature of the participant’s impairments. But while the NDIA can’t consider the nature of a person’s impairment, they can consider the impact of the impairment. The distinction is subtle- the nature of a participant’s impairment could be a cognitive impairment, but the impact of the impairment might be a limited ability to use online banking.
The amount of funding in the plan.
If the plan has been underspent in the past.
Past bankruptcies that a person has been discharged from.

Reviewable decisions

All of these decisions relating to plan management are reviewable.

Learn more

It’s likely to be raining Rules in the first half of 2025, so you might want to get an umbrella! (Apologise for the awful joke).

But, in all seriousness, we’ll keep you updated as things happen.

And to learn more about the NDIS Act, check out our articles: