Update on a National Disability Insurance Scheme

An agreement for reform

In 2010 the Australian Government asked the Productivity Commission to conduct a public inquiry into the benefits and feasibility of establishing a new national disability care and support scheme to improve care and support services for people with disability in Australia. National consultation occurred seeking views as to what a new service system should look like.

In August 2011 the Federal Government released the Productivity Commission’s final report on the inquiry into Disability Care and Support and announced that it “supports the Productivity Commission's vision for a system that provides individuals with the support they need over the course of their lifetime, and wants reform of disability services that is financially sustainable”. The Government also announced that it would start work immediately with states and territories to “build the foundations for a National Disability Insurance Scheme” as proposed in the Productivity Commission’s Report. $10m was committed towards the technical policy work required to bring about this reform.

Less than 10 days later on 19 August 2011 the Council of Australian Governments (COAG) agreed on the need for major reform of disability services in Australia through a National Disability Insurance Scheme. Key outcomes from this agreement were:

1. COAG will develop high-level principles by the end of 2011 to guide consideration of the Productivity Commission’s recommendations regarding a National Disability Insurance Scheme, including for foundation reforms, funding and governance. Foundation reforms include developing common assessment tools to ensure equality of support at a national level, putting in place service and quality standards and building workforce capacity.
2. A Select Council of Ministers from Commonwealth, States and Territories will be established to start work immediately to lay the foundations for a National Disability Insurance Scheme (NDIS). The Select Council will report at COAG’s first meeting in 2012.
3. The Select Council will be supported by an Advisory Group which will include representatives from all States and Territories.

In line with the recommendations in the Productivity Commission’s final report the new scheme is to be gradually introduced in selected regions of Australia from 2014 with the aim to be fully functional nationally by 2018.

Copies of submissions made by CDA in relation to this inquiry can be viewed online here or obtained by contacting CDA by phone on 03 9482 1130 or 1800 222 660 (interstate or regional callers) or via email info@cda.org.au

A Summary of the Productivity Commission’s Recommendations

The following summary is adapted from the key points reported by the Productivity Commission in the Final Report on Disability Care and Support.

The current system is poor. The current disability support system is underfunded, unfair, fragmented, and inefficient, and gives people with a disability little choice and no certainty of access to appropriate supports. The stresses on the system are growing, with rising costs for all governments. A new system is needed.

The Commission is proposing a new national scheme — the National Disability Insurance Scheme (NDIS) — The NDIS would provide insurance cover for all Australians in the event of significant disability. The main function (and source of cost) of the NDIS would be to fund long-term high quality care and support (but not income replacement) for people with significant disabilities. Everyone would be insured and around 410 000 people would receive scheme funding support.

The NDIS would have other roles. It would aim to better link the community and people with disabilities, including by using not-for-profit organisations. It would also provide information to people, help break down stereotypes, and ensure quality assurance and diffusion of best practice among providers.

The benefits of the scheme would significantly outweigh the costs. People would know that, if they or a member of their family acquired a significant disability, there would be a properly financed, comprehensive, cohesive system to support them. The NDIS would only have to produce an annual gain of $3800 per participant to meet a cost-benefit test. Given the scope of the benefits, that test would be passed easily.

People would have much more choice in the proposed NDIS. It has been proposed that support packages would be tailored to a person’s individual needs. People could choose their own provider(s), ask an intermediary to assemble the best package on their behalf, cash out their funding allocation and direct the funding to areas of need (with appropriate probity controls and support), or choose a combination of these options.

The NDIS would cover the same types of supports currently provided by specialist providers (but with sufficient funding), give people more opportunity to choose mainstream services, and encourage innovative approaches to support.

Funding of the scheme should be a core function of government (just like Medicare). The Commission estimates that the amount needed to provide people with the necessary supports would be about $13.5 billion which is nearly double current spending. The Commission has recommended that the Australian Government should finance the entire costs of the NDIS by directing payments from consolidated revenue rather than implementing new taxes or levies.

The scheme would gradually be rolled out from mid-2014. The Commission proposes that the scheme should start in a few regions of Australia to allow fine-tuning of the scheme, while providing high quality services to many thousands of people. In 2015-16, the scheme should cover all regions of Australia for the highest priority groups, and should progressively expand until the scheme covered all people by the end of 2018.

A separate scheme is needed for catastrophic injuries. The Commission has recommended that a separate scheme is established for people requiring lifetime care and support for catastrophic injuries such as major brain or spinal cord injuries. Currently, many Australians get poor care and support when they acquire such injuries because they cannot find an at-fault party to sue.

A no-fault National Injury Insurance Scheme, comprising a federation of individual state and territory schemes, would provide fully-funded care and support for all cases of catastrophic injury. It would draw on the best schemes currently operating around Australia. State and territory governments would be the major driver, developing a comprehensive scheme by 2015.

Copies of the Productivity Commission’s final report into Disability Care and Support are available at http://pc.gov.au/ or by contacting the Productivity Commission on 1800 020 083 or email disability-support@pc.gov.au.