Source: The Conversation (Au and NZ)
Fraud has been on the National Disability Insurance Scheme (NDIS) radar for years. Now, a new parliamentary report has made 12 recommendations aimed at stopping criminals, dishonest providers and other “bad actors” from exploiting the scheme.
The report calls for better information-sharing between government agencies, stronger action against kickbacks and conflicts of interest, a worker registration system, and better whistleblower protection.
But even more could be done to protect participants and detect fraud before false claims are paid.
How big is NDIS fraud?
The National Disability Insurance Agency recently estimated that around A$3.7 billion, or 8.3% of its payments in the previous financial year, was affected by what it calls “integrity leakage”.
But this figure should be treated carefully. Integrity leakage can include mistakes, poor record-keeping, incorrect claims and other breaches of the rules.
Fraud can take many forms
A provider might charge for a service that was never delivered, add extra hours to an invoice or charge the NDIS more than it charges other customers.
Fake businesses may be created to submit claims, while some criminals impersonate participants, providers or support coordinators to gain control of NDIS money.
More disturbing cases involve participants being intimidated or threatened to allow a provider to use their plan.
Criminal groups may also work with some providers or intermediaries to prepare false documents, inflate support needs or direct participants towards particular services.
These actions can use up money a participant needs for essential support. It can leave people without services later in their plan, place them at risk of violence or neglect, and make them frightened to speak out.
What did the report say?
The report recognises the way the scheme was designed and rolled out left important gaps.
Government agencies have not always shared information effectively. This means a person or business excluded from one part of the care sector may be able to appear somewhere else under a different role or business name.
The NDIS market can also allow one organisation to advise a participant, manage their funding and sell them services, creating obvious conflicts of interest.
Read more:
NDIS fraud is more than ‘growing pains’ – how fundamental flaws in the scheme should be addressed
The report recommends better information-sharing so providers banned from other care sectors cannot simply move into the NDIS.
It calls for a system for managing conflicts of interest, stronger penalties and reporting requirements for kickbacks, and stronger whistleblower protections.
It also recommends a stronger worker registration system
Currently, around 92% of NDIS providers are unregistered. This makes it harder for the NDIS regulator to know who is operating in the market, whether they have a history of misconduct, or whether they have simply reopened under a different name.
This does not mean all unregistered providers are dishonest. Many are trusted businesses participants choose and prefer. But the lack of scrutiny can make it harder to identify suspicious behaviour before money is lost or participants are harmed.
A previous taskforce recommended a tiered approach, with stronger checks for providers delivering higher-risk services and simpler requirements for those offering lower-risk support.
The report supported stronger registration and oversight of the NDIS workforce. It didn’t specifically recommend a tiered approach but doing so would allow the regulator to focus its attention where the risks of fraud and harm are greatest.
Not every provider should face the same costly and complex process. A small provider offering gardening or household help should not necessarily face the same requirements as a company controlling a participant’s housing, personal care and large amounts of funding.
However, if registration is too costly or difficult, some smaller providers may leave the market. This could reduce participants’ choice and, in some areas, leave people without access to essential services.
What more can be done?
Stronger investigation powers and tougher penalties usually come into play after suspicious payments have been made or somebody has already been harmed.
A better system would also ask how could this claim have been stopped before the money left the scheme. How could the participant have received help before becoming trapped by the provider? And what protection would the participant receive if they reported what was happening?
Participants need reporting pathways that are safe, accessible and independent of their providers. A standard fraud hotline may not be enough for someone who relies on the suspected provider for personal care, transport, communication support or housing.
Some participants may fear losing essential services if they complain. Others may worry they will be blamed or asked to repay money, or will have their plan placed under greater scrutiny.
This is where independent disability advocacy is essential. Advocates can help participants understand what has happened, gather information, make a report and arrange alternative support. But advocacy organisations need reliable, long-term funding to perform this role.
More can be done to check claims before they’re paid
The NDIS processes an enormous number of transactions. So the payment system should be able to check basic details before releasing money.
This could mean asking:
- does the provider’s business number match its bank account?
- is the provider permitted to deliver that type of service?
- does the invoice match the participant’s plan?
- is the same service being claimed repeatedly, or by several related businesses?
- has the provider recently changed its ownership, address or bank details?
These checks could identify unusual claims before payment, rather than relying mainly on investigations and debt recovery afterwards.
What happens next?
The government will now consider the report’s 12 recommendations.
But this is only one part of a much bigger debate about the future of the NDIS. A separate Senate inquiry is examining proposed changes to eligibility, participant plans and funded supports, which are expected to reduce projected NDIS spending by $37.8 billion over four years.
As the government considers wider changes to the NDIS, it should not allow concerns about fraud to become a broad justification for reducing participant supports. Fraud, weak regulation, poor service quality and rising costs are related but distinct problems, and require different responses.
Read more:
The government plans to tighten NDIS eligibility. Here’s what’s likely to change
Mona Nikidehaghani does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
Original source: https://analysis1.mil-osi.com/2026/07/06/how-to-stop-fraudsters-tricking-disabled-people-out-of-their-ndis-funding/