What are the key principles the NDIS is built upon?

The NDIS operates under a set of principles ^[1] to guide their approach to funding supports and services for participants:

Choice and control: This means people with disability can choose and control how, where and when their reasonable and necessary supports are provided. The provision of services in this way is sometimes referred to as a person-centric service approach. This can be challenging at first for participants, workers and services.

Suit individual circumstances and individualised funding: This means people with disability get reasonable and necessary supports they need to pursue their goals, to be more independent and to participate in the community.

Take a lifetime view: This means planning that looks beyond immediate needs to what is needed across a person’s lifetime. This includes goals and aspirations, living arrangements, informal supports and carers’ circumstances. It also includes making early investment where this reduces needs and costs over someone’s lifetime. Support arrangements can be changed as goals, preferences and needs change over time.

Insurance-based approach: This is sometimes referred to as spreading the cost and sustainable funding. This means the costs of disability services and supports are shared across the community. Insurance approaches are also used to estimate the cost of reasonable and necessary supports and manage costs to make sure the Scheme is sustainable. This is important in how governments fund the NDIS in the future.

^[1] Source - NDIS Principles to Determine Responsibilities of the NDIS and Other Service Systems (PDF)

How does the NDIA apply a person-centred approach to NDIS participants?

The NDIA assumes a person-centred approach to be the appropriate approach to the provision of their services to participants of the NDIS. A person-centred approach is one in which a person with disability has the same right as other members of Australian society to be able to determine their own best interests and to engage as equal partners in decisions that will affect their lives. This approach aims to ensure that the person's needs and preferences are a driving force behind decisions and planning that occurs in relation to them. As articulated in the National Standards, "Person-centred approaches ensure that individuals are in the centre of service design, planning, delivery and review. Individuals shape and direct service and support arrangements to suit their strengths, needs and goals with the support of families, friends, carers and advocates"^[1].

The NDIA apply the principle of choice and control in relation to participants' supports and services. In addition the NDIA will provide funding for supports and services that suit individual circumstances through individualised funding. This combination of principles enables the NDIA to take a person-centred approach with participants of the scheme. This approach facilitates empowerment of people with disability as they are positioned to make their own decisions in relation to purchasing their preferred supports and services from their preferred suppliers.

The scheme also values the principle of least restrictive alternative which refers to decision-making and practice that favours changing or modifying an environment to enable a person to participate as much as possible with the least restrictions possible. This is a guiding principle to ensure that people with disability have the same opportunities as others to participate in normal community activities such as living, education, employment and recreation.

^[1] Source - National Standards for Disability Services, p.9 (PDF)

How does the NDIS incorporate the principle of taking a lifetime view?

Investing in early intervention is a key design principle in the NDIS to ensure people with disability receive the supports they require at the right time, to assist a person to lead a more independent life and reduce the amount of support the person may require in the long term. Early intervention is built into a number of the Objects of the NDIS Act 2013:

1. support the independence and social and economic participation of people with disability;
2. provide reasonable and necessary supports, including early intervention supports, for participants in the National Disability Insurance Scheme launch;
3. enable people with disability to exercise choice and control in the pursuit of their goals and the planning and delivery of their supports; 
4. facilitate the development of a nationally consistent approach to the access to, and the planning and funding of, supports for people with disability;
5. promote the provision of high quality and innovative supports that enable people with disability to maximise independent lifestyles and full inclusion in the mainstream community.

What are the insurance-based principles on which the NDIS is built?

The Scheme is based on a social insurance or investment approach to the provision of support and as such there are a number of insurance principles applied to the design and implementation of the NDIS. These principles outlined below are consistent with principles applied to the economic assessment of health care and pharmaceutical interventions:

Actuarial estimate of long-term costs

This estimate will be a living reflection of emerging experience of utilisation and cost, and will assist the Board and NDIA to ensure the NDIS is financially sustainable. The aggregate annual funding requirement will be estimated by the NDIS Actuary's analysis of reasonable and necessary support need, including a buffer for cash flow volatility and uncertainty. The aggregate funding requirement will comprise equitable resource allocation at an individual and sub-group level, and will be continually tested against emerging experience. This will require a comprehensive longitudinal database.

Long-term view of funding requirements

Unlike historic welfare schemes, the NDIS will focus on lifetime value for scheme participants, and will seek to maximise opportunities for independence, and social and economic participation, with the most cost-effective allocation of resources. This will align the objectives of the NDIS with those of participants and their families.

Investment in research, innovation and outcome analysis

The NDIA will support insurance-based governance through a long term approach with the objective of social and economic participation, and independence and self-management, for participants. One example of work being undertaken in this space includes the enhancement of reference packages. These provide guidance on the types of supports that are commonly provided and increase the flexibility for participants. The development and implementation of an Outcomes Framework which measures the extent to which participants are achieving their goals, is another example.

Investment in community participation and building social capital

To further support long term investment, the NDIA will invest at a systemic level in addition to providing for individual supports. The NDIS will support the development of community capability and social capital so as to provide an efficient, outcomes-focused operational framework, local area coordination and a support sector which provides a high quality service and respects participant social and economic participation and independence. This includes (a) encouraging the use of mainstream services to increase social and economic participation of people with disability, and (b) building community capacity and social capital, which will be particularly important for people with disability who are not participants. The ongoing implementation of the National Disability Strategy by governments will support this work.