NDIS Costs on Track

Participation in the National Disability Insurance Scheme has doubled since December 2013 with the average cost of individual care packages dropping to within budgeted predictions, the Federal Government has told the Senate Estimates Committee.

Assistant Minister for Social Services Mitch Fifield told the Senate Estimates Community Affairs Committee that some 6,434 participants have been found eligible for the NDIS, with 5,414 having an approved plan by the end of March.

Quoting from the NDIS Third Quarterly Monitoring Report, Senator Fifield said the average package costs had fallen in the latest quarter following improvements in January which provided more guidance about reasonable and necessary levels of support.

“I think colleagues will remember that in the first quarter of the operation of the NDIS, that average package costs were $46,300, which was nearly 30% higher than the budgeted average package cost of $35,000.

“I was at pains in November last year… to make clear that you do have to be careful in extrapolating one quarter’s results to full scheme. But nevertheless, that’s no reason for the Scheme not to, out of an abundant sense of prudence, to interrogate the results of the first quarter.

“In the second quarter, the average package cost fell to $40,600, which was still 15 per cent higher than anticipated.

“Following the release of this data I did express concerns to the Board regarding the potential impact of these average package costs being higher than anticipated on an ongoing basis. And it’s fair to say that that’s a concern that was also shared by the Board.

“In response the Agency put in place a number of measures to address that situation, which has helped bring average package costs down to within the budgeted average at $34,000.

“The third quarter report also shows that 5,400 participants have an approved plan. In the first and second quarter, approved participant rates were around half of what was anticipated in the bilateral agreements. As of the third quarter, we are nearly at 80 per cent of the bilateral target of 6,861 approved participants,” Fifield said.

However, the Senator warned that funding for some trial sites could continue to blow out.

“I think colleagues will also recall the Scheme Actuary’s advice that higher costs for supporting people in large residences in the Barwon and Hunter trial sites hadn’t been factored into the bilateral agreements signed by the previous administration, which could – and I emphasise could – result in an extra $100million in costs over the trial. That’s an issue for the trials, not for full scheme.”

Fifield told the Committee that the national headquarters for the NDIS in Geelong recently and signed an agreement with the Northern Territory for the NDIS trial site.

“An agreement has also been signed with Western Australia for a trial site to commence there for 1 July, and rollout details are imminently to be finalised with the ACT. These clearly are not the actions of a Government that is intent on doing anything other than rolling the NDIS out in full.”

The Quarterly Report shows that around $107 million of support will flow to participants in 2013/14 – well within the funding envelope of $152 million for 2013/14.

To date the largest disability groups across the trial sites are autism, intellectual disability, Down syndrome and cerebral palsy.

“There will obviously be quite a bit of variability in the data from quarter to quarter as different groups are phased into the NDIS. But these results show it’s steady as she goes in the NDIS trial sites, although of course we’ve still got lots more work to do,” National Disability Insurance Agency Chairman Bruce Bonyhady said at the release of the Third Quarter results.

“In the months ahead the NDIS will undergo further improvements to improve the experience and flexibility of participants, as well as the value for money for all Australian taxpayers.”

Bonyhady said the NDIA was working to:

• Build a diverse and innovative market for disability support, including fostering new providers and helping existing providers move from block funding to a contestable market.

• Make individual plans more flexible and provide greater control and choice to participants.

• Increase the capacity of disability support organisations to get people ready for the broader roll-out of the NDIS.

• Ensure approved plans help to build family, informal and community supports.

• Work with governments to tackle challenges with “in-kind” arrangements which restrict control and choice among participants and hurt cash-flow for some providers.

“The NDIS is on budget and is growing steadily. That’s welcome news given how crucial the NDIS is to our community and our economy,” he said.

“This report shows we are using the experiences gained in the trial sites to build a better NDIS, with better outcomes for Australians with disability and their families.”