The national disability insurance scheme is failing those with severe mental health problems and risks creating significant gaps in support services, a new report warns.

The University of Sydney report, titled Mind the Gap, warns problems with the NDIS’s handling of serious mental health issues could leave many without proper support.

The authors interviewed 58 stakeholders in the mental health sector and found that people with a psychosocial disability are having significant difficulty accessing the scheme.

The latest figures show just 6.4% of NDIS participants have a primary psychosocial disability, less than half the number expected.

About 81.4% of those who requested NDIS support for psychosocial disability were accepted, compared with more than 97% for people with cerebral palsy, autism or intellectual disability.

The scheme, at full rollout, is designed to cover about 64,000 people with psychosocial disability. That is well below the total number of people who require ongoing support for severe mental illness in Australia, which the government estimates at 230,000. The report casts doubt on the government’s figure, saying its basis is unclear, given there are an estimated 690,000 Australians with a severe mental illness.



The federal government has repeatedly stated the NDIS is designed to complement, not replace, existing mental health services, and is only for those who have a permanent, or likely to be permanent, disability caused by a mental health issue.

A National Disability Insurance Agency (NDIA) spokeswoman said the scheme was never intended to replace other government support systems, such as the mental health system.

“The mainstream mental health system continues to be responsible for the broader group of people who require community based psychosocial supports outside the NDIS,” she said.

But report author Jennifer Smith-Merry, of the University of Sydney, warns the NDIS risks leaving gaps in support services. She said existing support services were being closed and their funding withdrawn on the assumption that they will be replaced by NDIS-funded supports.



“What is significantly worrying is that at full rollout the scheme is only designed to meet the needs of 64,000 people with severe mental illness, yet existing services are being closed and funding moved into the NDIS,” Smith-Merry said. “This means that many people are going to miss out on the services they need.”

Late last year, the NDIA began working on dedicated pathways to accessing the scheme for those with severe mental health issues. It also pledged to curb the use of phone interviews to plan an individual’s NDIS-funded supports, a practice that had drawn the ire of a broad range of disability advocates.

“Work is also underway to develop tailored pathways to ensure the NDIA has the right response for all participants, including people with psychosocial disability, children, people from Aboriginal and Torres Strait Islander communities, those from culturally and linguistically diverse backgrounds and people with more complex needs,” the spokeswoman said.

Organisations are losing staff with expertise in psychosocial disability University of Sydney report

But the report identifies deeper problems with the NDIS’s treatment of psychosocial disability. It warns that knowledge of the NDIS is low among many people with a psychosocial disability and that individuals are either not applying for support or withdrawing their applications.

The scheme’s need for participants to prove “permanence” of disability is alienating those with mental health problems, who are treated on the basis that they can and will recover, the report said.

Support for those from Indigenous or culturally diverse groups is poor, the report finds, particularly for those in remote locations. The quality of NDIS assessments of mental health is also described as “poor”, due to a lack of understanding among assessors.

Families and service providers are prevented from contributing in the NDIS planning process, the report said, and expert assessments are often ignored. Participants are not given an opportunity to review their support plan sufficiently before it is signed off.

The report warns the NDIS transition is having significant ramifications for groups providing mental health services.

Organisations specialising in psychosocial disability are “collapsing, merging and selecting not to engage with the NDIS” because the government’s costing structure is unworkable.

“Organisations are losing staff with expertise in psychosocial disability because the level of funding provided by the NDIA for instances of care does not match the cost of employing trained staff or providing training and supervision to new staff,” the report warns.

The Community Mental Health Association vice-president, Kerry Hawkins, said the report reinforced that those with psychosocial disability were not engaging or applying for the scheme and that the NDIS eligibility criteria were creating significant barriers.

“The solutions highlighted in the report include a separate stream for psychosocial disability with recovery-orientated language and practice, high-level leadership on psychosocial disability within the NDIA and alternate funding models for those not eligible for the NDIS,” Hawkins said. “These would be a good start.”