What is the National Disability Insurance Scheme?

This section provides information about the National Disability Insurance Scheme (NDIS); what the NDIS intends to replace; the cost of the scheme; how it is funded; and information on the National Insurance Injury Scheme.

What is the NDIS?

The NDIS is a new way of providing disability services across Australia to people with significant and permanent disability. The NDIS will fund the support needs of people with significant and permanent disability which manifests between the ages of 0 to 65.

The NDIS will take a lifetime approach to the provision of services and supports to enable people with disability to live an ordinary life in which they can achieve their goals and aspirations and participate in the social and economic life of the wider community.  

The design of the NDIS aims to maintain and enhance people’s informal supports including family and friends, assist people to have greater access to mainstream services and participate more fully in wider community life. Supporting employment opportunities is also a key goal of the scheme and the economic benefits are predicated on many people living with disability and unpaid carers gaining employment. 

What does the NDIS replace?

In 2011 the Productivity Commission (PC) described the existing disability system as ‘underfunded, unfair, fragmented and inefficient’ and failed to provide essential supports and services to a majority of people with significant disability. The Productivity Commission recommended the existing system be replaced with a unified national scheme to fund long-term, high-quality care and support for all Australians who experience significant disability. The federal government subsequently began working with states and territories to establish the NDIS.[1]

The insurance scheme model aims to replace a large percentage of the existing disability system at state, territory and federal levels across Australia. Prior to the full implementation of the NDIS the National Disability Agreement articulates the responsibilities of levels of government in relation to the provision of disability services and meeting the objectives of the Agreement.

The Agreement articulates that the state and territory governments are responsible for the provision of specialist disability services. These services include accommodation support; respite; community access; community supports such as therapy and early intervention; advocacy; and information services for people with disability. 

The Commonwealth Government has responsibility for employment services for people with disability and provision of funding to support states and territories to achieve the objectives as outlined in the National Disability Agreement.

[1] Source - Parliamentary Library NDIS Quick Guides

How much will the NDIS cost?

When fully implemented the NDIS is expected to be a substantial new government program. It is a demand driven model however the cost is expected to increase as it is progressively introduced from around $5.1 billion[2] in 2016-17 to an estimated $21.6 billion when it is fully implemented in 2019‑20. The cost will be shared by the Australian and State and Territory Governments.[3] The figure below provides a comparative scale of the program in comparison to other selected programs.

Projected NDIS expenditure compared with selected Aust Govt programs

* Disability Support Pension (DSP); Pharmaceutical Benefits Scheme (PBS)

[2] Source - NDIA Quarter 2, 2016–17 Report 31 DECEMBER 2016, p.5

[3] Source - Parliamentary Library NDIS Quick Guides

How will the NDIS be funded?

The Australian Government will be responsible for just over half of the annual $21.6 billion cost at $11.2 billion. Government estimates that around $6.8 billion of this expenditure will come from the redirection of existing disability funding. The different States and Territories will make up the difference of $10.4 billion through the application of existing and new funding.

The scheme is funded, in part, by increasing the Medicare Levy from 1.5 to 2 per cent. This money will be placed in a separate fund for 10 years and will only be able to be drawn on to fund the additional costs of delivering the NDIS.

What are the timescales for the NDIS Transition?

The NDIS commenced on a trial basis on the 1st July 2013 in particular sites and is now being implemented nationally. For the first three years up to the 30th June 2016 the NDIS was introduced in specific geographical locations known as trial or launch sites. From 1st July 2016 to 30th June 2019 the NDIS will be transitioned progressively in all Australian states and territories.  

Access to the NDIS during this transition period will only be available to people who live in a location where the NDIS has commenced, and for certain locations only to people in specific age groups. It is expected that the NDIS will be rolled out Australia-wide by 30th June 2019. The following graphic is an overview of transition timescales Australia wide[​4].

What are the timescales for the NDIS Transition?

Timescales for NDIS Transition

1 The Bilateral Agreement for NDIS launch between the Commonwealth and the ACT provides for all eligible ACT residents to have access to the scheme from 2016-17.
2 In Western Australia, trials of two different models of disability service delivery are running parallel. The NDIS and WA NDIS trials are being evaluated and the outcomes will inform how disability services in Western Australia are provided in the future. In April 2016 the WA and Commonwealth governments announced the extension and expansion of the NDIS trials in WA. Existing trials were extended by 12 months to 30 June 2017. On 1 October 2016 the WA NDIS trial was expanded to include three new local government areas, Armadale, Murray and Serpenline-Jarrahdale. From 1 January 2017 the NDIS trial will expand to include the local government areas of Bayswater, Bassendean, York, Chittering, Notham and Toodyay.
3 The Western Australia NDIS contains a variation in the local government arrangements by the Western Australian government, Disability Services Commission.
Source: Based on ANAO analysis of: Heads of Agreement; Bilateral Agreements for the Transition to an NDIS.

The NDIA Homepage provides links to detailed transition information for each state and territory as do the links below:

Australian Capital Territory
New South Wales
Northern Territory
Queensland
South Australia
Tasmania
Victoria
Western Australia

[​4] Source - graphic created by National Disability Services March 2017 based on ANAO analysis of: Heads of Agreement; Bilateral Agreements for the Transition to the NDIS

How many people have accessed the NDIS during transition?

At the end of December 2016 there were 61,215 Australians who had become participants of the NDIS and received individualised plans. The NDIS Quarterly Report for October-December 2016 showed $5.1 billion had been committed to help people with disability across the country. The NDIA infographic below represents the number of participants with approved NDIS plans broken down by States and Territories at the end of December 2016[​5]

NDIS roll out Quarter 2, 2016-17 Report

[​5] Source - NDIA Infographic sourced directly from NDIA Quarter 2, 2016–17 Report 31 DECEMBER 2016

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