Federal Government warned of cost blowout in National Disability Insurance Scheme rollout

Updated

The Federal Government is being warned about potential cost blowouts in the $22 billion National Disability Insurance Scheme (NDIS).

The agency overseeing the NDIS said factors including the increasing prevalence of autism, workforce and supply shortages, and states shifting health costs could cause overruns.

In a document obtained by the ABC under Freedom of Information, the National Disability Insurance Agency (NDIA) earlier this year urged some of the nation's most senior bureaucrats to remain vigilant.

"Clearly risks remain, especially for the Commonwealth Government which is on risk for cost overruns," it said.

Key points: NDIA this year urged senior bureaucrats to remain vigilant of cost blowouts

Agency says average annual cost of more than $38,423

Productivity Commission had modelled an average cost of $34,969

Full-scheme rollout is to start from July next year for 460,000

"Cost risks are currently being managed, but exposure is ever present."

The NDIS is currently being trialled in areas including the ACT, Barwon region in Victoria, the Hunter area in New South Wales. There are also trials in Tasmania and South Australia for children.

South Australia's trial has been plagued by problems after the State Government underestimated by about half the number of children who would be eligible, reportedly despite warnings from SA's peak autism body up to 11,000 local children would need support from the NDIS.

Many families of children with disabilities have been left out of pocket and the trial is running months behind schedule.

The agency said $952.8 million had so far been committed nationwide to individual funding plans, with an average annual cost of more than $38,423 as at June 30.

The Productivity Commission modelled an average cost of $34,969 when designing the scheme.

Full-scheme rollout is to start from July next year and is expected to cover 460,000 people, who will be given individual funding packages to choose services and manage their care.

Full costs unclear until scheme up and running: NDIA

The documents were prepared by the agency for an August meeting between Prime Minister's Department secretary Michael Thawley, Treasury secretary John Fraser, NDIS chair Bruce Bonyhady and NDIA chief executive David Bowen.

The NDIA said the proposed transition to full scheme would be "very fast" and full costs may not emerge until after it was up and running.

It said there were "a number of key risks" during transition from trial sites to the full scheme, and monitoring was needed for:

Workforce and supply shortages that could drive up costs and impact on scheme price.

Scope creep arising from cost shifting by state or territory services, such as health

Increasing prevalence of autism and development delay

The department secretaries and NDIA bosses were told the trials were on time and on budget, with a high level of satisfaction among participants.

At the start of this financial year, 19,817 people were eligible for the scheme with more than 17,000 plans approved.

"Considering the number of participants who have entered the scheme and distribution of packages committed to these participants, the scheme is within the full scheme funding envelope," the report said.

Topics: health, disabilities, federal-government, australia

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