Government aims to 're-make' NDIS, redirect funding to aged care

Speaking at the National Press Club on Wednesday, minister for health and ageing Mark Butler said he will soon introduce a bill to ensure the sustainability of the National Disability Insurance Scheme (NDIS), seeing about 160,000 recipients' entitlements scrapped.

Butler lamented that although the NDIS is "one of Australia's great human rights achievements" and was created with goodwill, it has strayed too far away from the scheme's original intent.

He said the NDIS actuary has advised the government that spending has blown out by $13 billion over the next four years. The changes are expected to net savings of about $15 billion a year by the end of the decade; the scheme is currently estimated to cost $70 billion by 2030.

The government says the scheme's growth rate will also be halved to 5% a year under the changes.

"Right now, the NDIS costs too much and is growing too fast, put alongside any comparable government program," Butler said.

"And unless we take action to make it sustainable, it simply will not be there in the future for the Australians who need it most.

"We can't afford for the NDIS to continue growing at its present rate."

Growing issues with the scheme include the surging number of recipients far exceeding what was anticipated, and "the lack of integrity" in the system that has opened the door to organised crime.

"The NDIS was originally intended to support around 410,000 people with a disability. Today there are 760,000 people on the scheme," Butler said.

"The Australian Criminal Intelligence Commission has told a review into NDIS integrity that criminals are paying cash kickbacks to participants and their families and sometimes resorting to intimidation and threats of violence towards vulnerable people."

The minister is set to table a Bill following next month's Budget to enforce a more stringent application process, which will strip off access to the NDIS from some 160,000 people.

"The Bill I intend to introduce in the Budget sittings will allow us to introduce standardised, evidence-based assessments of a person's functional capacity to determine access to the scheme," Butler said.

"This is a big change to the scheme - the details of which will be worked through carefully over coming months with a technical advisory group, members of the disability community and the states.

"While new eligibility rules need to be worked through, our initial modelling will see the number of people on the scheme reduce to around 600,000 by the end of the decade instead of growing to well over 900,000."

Further, Butler will establish programs with different states to conduct NDIS reviews to provide local support to people who are not given access to the NDIS.

"This work already has $6 billion allocated to it by earlier decisions of National Cabinet," he said.

"... this will see us rebuild systems that used to be there for people with less significant support needs in partnership with the community and states and territories.

"Systems that were unfortunately dismantled, leaving the NDIS as the only port in a storm for many Australians."

Butler will also reassess the management of payments and claims, where currently the scheme has "visibility" of evidence for 90% of claims that are made by plan managers or providers.

"That's around 600,000 claims every day without supporting evidence," he reiterated.

"This underlines the serious need for action to tackle the lack of integrity in the payment system.

"Enrolling providers in a digital payments system means the NDIA will be able to see evidence from every single provider and ensure that they're paid directly."

A boost for aged care

Alongside the restructuring of the NDIS, Butler has introduced measures to deliver new aged care packages.

Butler said the Budget will invest $3 billion in delivering more beds, packages and better care for older Australians, while $200 million will be invested to deliver 20 additional Specialist Dementia Care units to expand the Hospital to Aged Care Dementia Support Program.

He also said the increased rebate for Australians over 65 for private health insurance, introduced in 2004 under the Howard government, will no longer be available, stating those funds will be diverted back into aged care, while returning the rebate on the same level paid by everyone.

Dementia Australia welcomed the announcement.

"We know that people living with dementia are disproportionally impacted when demand for limited care places is high," Dementia Australia executive director services, engagement and research Kaele Stokes said.

"The number of Australians living with dementia is expected to increase to more than one million by 2065, so it is critical that care right across the spectrum is available."

However, she was more cautious when it came to the proposed NDIS measures.

"Dementia Australia recognises the government's commitment to ensuring the long-term sustainability of the NDIS scheme," Stokes said.

"It is too early to fully understand how these changes could impact people living with young onset dementia and their families. Dementia Australia will carefully consider the announced measures as more information becomes available.

"It will be particularly important that the new eligibility arrangements announced do not disadvantage people living with young onset dementia where functional capacity can fluctuate but care needs progressively increase over time."