What is NDIS and how it works

What is the NDIS (National Disability Insurance Scheme)?

The NDIS stands for National Disability Insurance Scheme, which extends great support towards people with disabilities, their families, and carers. 

It is jointly operated and funded by the Australian government and participating states and territories. The NDIS has been introduced and exercised across Australia since July 2016.

The primary contribution of NDIS is the support packages for individuals, the people with disabilities. After the optimized implementation of NDIS in Australia, it is expected to benefit approximately 460,000 Australians with personal support.

NDIS also plays a broader role in helping people with disabilities to:

  • access general services such as health care, housing, and education,
  • access public services such as sports clubs and libraries, and
  • nurture informal support such as family and friends.

NDIS is an uncoiled (demand-driven) scheme, not a means-tested scheme. Like many other Australian government social policy programs (such as Medicare, the Pharmaceutical Benefits Scheme, and income support payments) are means-tested.

NDIS: goals and principles

NDIS was established under the National Disability Insurance Scheme Act of 2013 (NDIS Act). The NDIS rules are legal instruments based on the NDIS Act, which illustrates about operations and working of the NDIS. The NDIS Act has also initiated and established the National Disability Insurance Agency (NDIA), an independent statutory body responsible for the administration of the NDIS.

According to the NDIS Act, the objectives of the NDIS include:

  • extension of support towards the independence and socio-economic participation of people with disabilities
  • provision of adequate and necessary support to participants, including early intervention, supports
  • empowering persons with disabilities to make decisions and monitor their achievements, goals, and planning of their supports.
  • promotion of access to a consistent national approach, planning, and funding of supports for persons with disabilities, and
  • provision of innovative, high-quality supports for disabled people. 

The NDIS is based on the “actuarial analysis-based insurance method for providing and funding assistance to persons with disabilities”. The NDIS Act also stipulates that the implementation of NDIS must ensure its financial stability.

NDIS Eligibility: Who can access the customized support package?

In order to be eligible for individualized NDIS support, individuals must meet certain access requirements. 

This includes Individuals who must:

  • live in an area where NDIS can be accessed,
  • meet residency requirements (be an Australian citizen, permanent resident, or Protected Special Category Visa holder)
  • meet disability or early intervention requirements, and
  • must be under 65 years old while completing an access request.

Requests for such support from NDIS are directed to NDIA. People who are eligible to participate are called NDIS “participants”.

What supports are available?

Funding for support in areas such as independence, housing, health, well-being, education, employment, social participation, etc. 

Funding may include:

  • daily activities
  • transportation to ensure participation in society, society, economy, and daily life activities
  • workplace support so that participants can successfully get or keep the job, in the open or supported labor market.
  • therapeutic supports including behavior support
  • support housework so that participants can maintain their home environment
  • help by skilled personnel in arranging aids or equipment assessment, set up and training
  • planning, building or modifying a home
  • mobile devices and vehicle modifications.
  • the initiatives including funding and payment for products via the NDIS act (such as sensory toys, sensory products, etc)

The NDIS website provides more detailed examples of the types of supports that can be provided to the participants.

NDIS employees or participants meet with NDIA to determine whether the agreed support services are “appropriate and necessary” to achieve the goals. These are then included in their “NDIS plan.” 

Under the objectives and principles of the NDIS Act, participants have the right to “choose and control in achieving their goals and planning the delivery of supports.” Funds provided through the NDIS plan can be managed by the NDIA member, a registered program management provider, or a nominee of the participant or member. The supports are provided by registered providers in what the NDIA considers to be a competitive and “self-sustaining” market.

There are several providers who promote the mode of payment through the NDIS act in order to provide financial aid, the payments can be done at sensory stores for buying sensory toys or products to embrace the different abilities in children or others. 

How much does NDIS cost?

With the launch of the NDIS, its cost has increased significantly in the four years, from approximately $4.2 billion in 2016-17 to $21.6 billion in 2019-2020. 

However, it is worth noting that the Australian government is only responsible for a little over half ($11.2 billion) of the annual cost of the scheme. 

After it is fully implemented, NDIS will become a substantial new government program. It is estimated that the annual cost will not be much higher than the Australian government’s plan to take care of the elderly or the Disability Support Pension (DSP). The (DSP) is higher than the current annual cost of the Pharmaceutical Benefits Plan (PBS), but not significantly lower than the current annual cost of Medicare.

However, the Productivity Commission argues that while the NDIS will be a cost to the government it will not be a cost to the economy. 

In its 2011 report recommending the introduction of the NDIS, it suggested that the benefits of the NDIS would exceed the costs and increase Australia’s GDP by nearly 1.0%.



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