NDIS: a $50b honeypot for scammers and criminals
When the National Disability Insurance Scheme (NDIS) was first implemented in 2016, we warned that it would draw an army of scammers and middlemen looking for a piece of the multibillion-dollar honey pot on offer.
After all, we’d seen comparable rorting in the private vocational education and training (VET) and pink batts systems, as well as in childcare subsidies.
In 2018, the National Disability Insurance Agency (NDIA), which runs the NDIS, established a 100-officer fraud task force to investigate over 500 allegations of fraud or “sharp practice”, including cases where tens of thousands of dollars were “syphoned” from support packages.
Then, Social Services Minister Dan Tehan stated at the time, “We are putting criminals on notice, you come after the NDIS, and we will come after you”.
Criminal syndicates were also revealed to have defrauded the NDIS out of millions of dollars.
In 2022, the Australian Criminal Intelligence Commission (ACIC) Chief, Michael Phelan, called for the formation of a new multi-agency unit to combat organised crime’s abuse of the NDIS. He suggested that up to 20% of the NDIS cash was being abused.
“It just sickens you”, bemoaned Phelan. “This is not a victimless crime. You’ve got to wonder how far down the scumbag scale you get before you start ripping off our most vulnerable people”.
Fast forward to today, and the ACIC has again warned that criminals are exploiting the NDIS. The ACIC told an NDIS integrity review that organised crime gangs are using the scheme to launder money, earn income, and hide assets.
The ACIS has also told the review that insufficient surveillance has allowed NDIS providers who have been banned from the system to reapply and resume their rorting.
“Weaknesses in provider suitability and screening can allow unsuitable or criminally‑linked providers to operate within the NDIS, increasing the risk that participants are exposed to poor‑quality care, exploitation, or services that are not delivered as intended”, ACIC officials said.
“Where oversight is limited and funding can be accessed without meaningful scrutiny, these risks are heightened, particularly for participants who rely heavily on providers to manage or deliver their supports”.
Any $50 billion government scheme is going to have a certain percentage of people doing the wrong thing for personal financial gain.
However, Phelan’s estimate of 20% ‘misuse’ should raise significant concerns in Canberra. That’s an enormous figure, suggesting up to $10 billion could be getting skimmed from the scheme annually.
The worst aspect of this situation is that there are people with severe disabilities who are struggling to gain funding because the NDIS is so stretched. So these thieves are taking money away from those who need it most.
Regardless, with the NDIS continuing to grow at an unsustainable pace, Treasurer Jim Chalmers has advised that NDIS cost reductions will be a key savings measure in the federal budget on 12 May.
While cost savings are certainly required, integrity measures are arguably the most important reform the government could make.
