A leaked review document shows the National Disability Insurance Agency used ‘legalistic brinkmanship’ to force disabled people to ‘bargain away their rights’. By Rick Morton.
Exclusive: NDIA used the law to ‘exhaust’ participants
A backlog of thousands of National Disability Insurance Scheme tribunal appeals was almost entirely artificial, not based on proper legislative interpretation and driven instead by “external pressures” to rein in costs of the scheme, according to independent reviewers chosen to work through the stricken cases.
Late last year, NDIS Minister Bill Shorten established an independent expert review (IER) to help resolve about 4500 cases that had become stranded before the Administrative Appeals Tribunal (AAT) under the former Coalition government.
For the first time, people with direct knowledge of an NDIS practice to “exhaust” participants and see them “bargain away their rights” have gone on the record and laid bare a system the National Disability Insurance Agency now acknowledges causes “undue stress”.
A report prepared by four independent reviewers, obtained by The Saturday Paper, is scathing and details an approach of “adversarial legalistic brinkmanship” taken by the NDIA when disabled participants sought reviews of its decisions.
The IER assessors – who were given access to case files, participants, experts and the NDIA itself in matters awaiting AAT determination – dealt with contested funding decisions that had already been subject to “two or three reviews” and which had lingered for two or more years.
Some participants were never able to discuss their case with a person from the agency until the IER process started.
“Attempts at resolution of disputes relied on adversarial legalistic brinkmanship to produce the result,” the reviewers say.
“In many cases, there appeared to be a failure to follow the evidence in expert reports and lived experience. The Agency often appears to have a primary focus on the costs of supports and trying to reduce them.”
The NDIS provides support for people with serious disabilities, to help them to have a good quality of life and participate in the community.
Participants develop a statement of supports – a plan – with the agency that administers the scheme, but it is the agency that ultimately decides what is funded and what is not.
Where there is disagreement, a disabled person can ask for an internal review and, where that fails, take the case to the AAT. It is a long and arduous process and, historically, participants have been fought every step of the way.
“It is notable from our observations that participants with higher education, and with ability to interrogate the Act and articulate their views do better than others,” independent reviewers Marg O’Donnell, Mary Kelly, Margo Couldrey and Tony Woodyatt wrote in their submission to the NDIS review, which has not been made public.
“In our experience, many of the decisions which appeared to be in conflict with expert evidence were based on the decision-maker focusing on the sustainability/costs of the scheme rather [than] the validity of requested supports according to law which requires a holistic consideration of all the elements in section 34(1) of the NDIS Act.
“This is an almost impossible ask of front to mid-line decision-makers who are dealing with the specifics of individual cases. The consequence of an over-reliance on costs is that the Agency’s decisions sometimes appeared inexplicable or irrational.”
Marg O’Donnell is a former director-general of several Queensland government departments and former chair of Legal Aid Queensland. Her co-signed “Brisbane reviewers” are all eminent professionals, with experience ranging from regulatory practice to law.
What they saw while working on NDIS review cases was so egregious they were compelled to write a voluntary submission to the NDIS review, ordered by Bill Shorten and overseen by the scheme’s “grandfather” and first chair, Bruce Bonyhady. Their submission documents the “emotional and financial toll on participants” conducted “at a great financial cost to the scheme”.
Indeed, even as the IER and other dispute resolution processes worked through the backlog of AAT cases, the NDIA still managed to spend $66.5 million in the past financial year, paying external law firms to work on tribunal matters. Its total external legal expenditure for that period was $72 million.
The independent reviewers noted with some alarm that lawyers were still being assigned to the cases they had been given to clear. That is, the agency was sending in private law firms to “negotiate” with participants who were also being reviewed under the IER.
“As a result of the parallel process, often during the course of our considerations, offers were made to participants by either lawyers from external firms or the Agency itself,” the reviewers wrote.
“This often resulted in the Agency agreeing to previously disagreed matters, sometimes just before a key milestone in the AAT or IER process. Requested supports which for two years were not deemed ‘reasonable or necessary’, suddenly became so without explanation.
“As independent reviewers, we often only found out about the parallel process and its outcomes via the participants and their advocates who provided us with new Statements of Issues from the Agency and the participants’ responses to the offers. Often there were no clear reasons based on evidence for offers and at times the offers were presented as a negotiation, i.e., the offer being contingent on the participant relinquishing some of their requests if they accepted the Agency offer.”
Just why is a matter of debate, although it seems to have been the result of early confusion in the IER trial and was stopped after the issue was brought to the attention of the agency’s chief counsel.
Lack of evidence is a common theme in the reviewers’ submission. It adds weight to a longstanding accusation that the NDIA never acted as a model litigant, which is an obligation it holds as a Commonwealth agency.
After dragging participants to the tribunal in the first place, the agency has drawn out the process of review before apparently determining, sometimes the day before an AAT member is due to decide, that the agency will settle. Almost 98 per cent of closed cases – 13,118 out of 13,428 – were “resolved before a hearing”.
New data from the AAT annual report for 2022-23 gives a sense of just how frequently the agency was forced to change its original decision: 97 per cent of the time. In that financial year, 127 resolved matters agreed with the agency’s original decision but 4268 had to be changed.
The vast majority of those changes were to grant some or most of what the participant had originally requested.
These are not small matters. In one case earlier this year, the parents of a child with a $53,000 annual package challenged the decision and, before the case went to a hearing, the agency almost tripled the funding to $146,550. In another matter, which did go to a hearing, the NDIA lost and the plan funding for a young child was quadrupled.
In the past financial year, the agency lost more cases at hearing than any other government body – more than half of the 90 cases it allowed to be finalised by decision of a tribunal member. In one particularly alarming matter, decided in May by AAT member Simon Webb, the NDIA didn’t bother to give any reasons at all for its original decision.
“It is a matter of concern that an Agency of the Commonwealth with responsibility for administering the NDIS appears to have failed to adhere to the requirements of the legislation it administers, as well as the basic tenets of contemporary procedural fairness and administrative decision-making,” Webb said in the May 25 decision.
“[These require] an administrative decision-maker provide reasons for a decision to a person whose rights, entitlements or reasonable expectations are adversely affected by it.”
Webb went even further, arguing the decision may well have been systemic and noted that providing someone with a “formulaic plan setting out supports that will be provided or funded” does nothing to satisfy the “legal obligation to provide reasons for the … decision”.
“A systemic failure to provide reasons for administrative decisions made under [section] 33(2) of the NDIS Act would be a matter of serious concern one would expect the CEO to promptly address,” he wrote.
That matter related to a decision made in November last year, just a month after the agency’s new chief executive, Rebecca Falkingham, started in the role and two months after Kurt Fearnley was appointed as chair.
“The NDIA acknowledges past processes for dispute resolution, including matters before the Administrative Appeals Tribunal (AAT), have caused undue stress among participants,” a spokesperson told The Saturday Paper.
“We are focused on improving fairness for NDIS participants; providing better and earlier outcomes to reduce the need for matters to be considered by the AAT and reducing the reliance on external lawyers.
“The NDIA has made significant improvements in reducing the backlog in the AAT through the introduction of a range of alternate dispute resolutions initiatives, including the early assessment team, intensive case reviews and the independent expert review (IER) trial.”
The overall AAT caseload has been falling – down 35.6 per cent to the end of September – and new matters as a proportion of participants have fallen from 1.52 per cent to 0.71 per cent. Of the 4500 “legacy” cases on the books in June last year, 90 per cent have been resolved by the new dispute resolution processes.
Minister Shorten told The Saturday Paper in a statement that he was proud of the work the NDIA had done to turn around a dire situation.
“At the time of the election 4500 individual participants were locked in a David and Goliath struggle, in many cases for a year and a half, just to achieve basic conditions,” he said.
“Under the Liberals, the NDIA was underfunded and unable to do its job for almost a decade. I am proud of the work the NDIA has undertaken to fix this problem. It shows when you invest in people for people you can make real change.”
For AAT matters received in the past 12 months, the median time to close or resolve matters has fallen from 31 to 18 weeks. New NDIA board member and former disability discrimination commissioner Graeme Innes told The Saturday Paper there had been a “significant change in culture under the new senior leadership and the new chief counsel”.
“We are now trying to work with people to resolve matters rather than having a really high level of contestability,” he said.
Senior sources within the agency have told The Saturday Paper there was an understanding at the highest levels that the former Coalition government encouraged or was happy to accept a hardline stance on frustrating participant challenges and this flowed down through the agency.
The IER reviewers in their submission have hinted at this same understanding.
“What caused the disturbingly large AAT back-log of cases in the first place, and their subsequent rapid resolution (without necessarily proceeding to the AAT) can only be explained by changes in the practices/processes of the agency itself,” they wrote.
“Those changes appear to have coincided with external pressures related firstly to reining in costs and then to clearing the back-log – for example the introduction of the ADR [alternative dispute resolution] process. Some participants believed the agency had become distrustful of them and considered that participants exaggerated their difficulties.”
The reviewers argue the ability to resolve the AAT backlog suggests it was artificial in the first place.
“Our experience is that the existence of IER and the opportunity to quiz both the agency and the participant about their positions, plus the capacity to have IER reports tabled at the AAT created vigilance and responsiveness and led to the majority of cases not proceeding to the AAT,” the submission says.
The NDIS review, commissioned by Shorten, has been finished and will likely be released in early December, after it has been shared with national cabinet.
A critical focus of that review is the deficient planning decisions made by agency staff and contractors in an environment where, Bruce Bonyhady says, all levels of society have begun to treat the NDIS “like a limitless resource”.
The May budget, which forecasts the scheme will cost $42 billion this financial year, set a growth target of 8 per cent each year from July 2026.
This article was first published in the print edition of The Saturday Paper on October 28, 2023 as "Exclusive: NDIA used the law to ‘exhaust’ participants".
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