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After years of careful manoeuvring, the Coalition government is readying to make radical changes to the National Disability Insurance Scheme. The revised system will force new assessments and tighten eligibility. By Rick Morton.

Exclusive: The seven-year plot to undermine the NDIS

The minister for the National Disability Insurance Scheme, Stuart Robert.
Credit: AAP Image / Mick Tsikas

Stuart Robert was not happy about the sex.

It was May and the minister for the National Disability Insurance Scheme was concerned that the government had lost its appeal, in the Federal Court of Australia, on the question of whether the disability program should fund sex workers for therapy.

At great emotional cost, the case had been fought by a woman in her 40s, known as “WRMF”, who has multiple sclerosis “and a range of other related serious medical conditions”. Three judges of the court found the woman’s disability had developed in such a way that “the prospect for her of sexual release of any kind without assistance is highly unlikely”. She had been single for the 17 years since her diagnosis and was unable even to masturbate.

The court’s decision was a vindication of a fundamental human desire for touch and sexual contact. Politically and personally, Robert, an evangelical Christian, was uneasy with it.

Three months later, in August, Robert announced the “most substantial package of reforms” to affect the NDIS since it began. Late last month, the Department of Social Services released its information paper about the proposed changes.

The changes include the controversial introduction of mandatory “independent assessments”. These assessments are currently done by health professionals who are already treating an NDIS participant – the new system will sever this link, and the assessments will be done by a third party without direct knowledge of the case. The agency responsible for the scheme has explicitly linked this to containing costs.

As well as the independent assessments, the list of conditions that granted people “automatic access” to the scheme will be torn up. Every single person in the scheme will have their support reassessed from the end of next year if they seek a plan review or have a change in circumstances. The fear is this will leave them vulnerable to a reduction in care.

There are also several measures in the information paper aimed at soothing the concerns of Robert and some of his conservative colleagues.

“Changes to the legislation will also make it clear that NDIS funds should not be used to purchase the services of a sex worker or devices solely intended for sexual stimulation and arousal,” the paper read.

To do this, and to bring in outsourced independent functional assessments that will govern who gets into the NDIS and what support they receive, the Coalition has been playing a years-long game of policy chess. All the key pieces are now in position to fundamentally reshape the nation’s disability scheme.

The story of how they were moved into place is one of frustration, political ransom and long horizons.

 

In mid-2017, the Commonwealth forecast that it owed states and territories more than $6 billion in NDIS revenue, which had been held under lock and key for three years. It was designed to be this way.

When Julia Gillard legislated the disability scheme in 2013, she also won support for a 0.5-percentage-point rise to the Medicare levy. All that money was stashed away in the DisabilityCare Australia Fund (DCAF), which is administered by the Future Fund. Annual payments are made to jurisdictions based on their population share of the NDIS.

Once key transition criteria were met by states and territories – such as phasing in existing disability service participants to the NDIS – all they had to do to be reimbursed from the fund was to sign an agreement for the full rollout of the scheme.

In all, more than $10 billion in receipts up to 2024 was held until the states signed up. Currently, every state and territory, except Western Australia, has done so. A spokesperson for WA’s Disability Services minister, Stephen Dawson, said the minister “strongly supports and is committed to co-governance of the NDIS”.

Under Gillard’s scheme, it was intended that the states would remain jointly in control of the NDIS. The staged release of money was designed to ensure all states signed up and remained committed.

Once the Coalition was in power, however, they introduced a catch: every agreement for the full scheme included a clause that handed back significant control to the Commonwealth.

It is hard to understate the seismic nature of this shift for the NDIS – and the decision-making power it has concentrated in the hands of the federal government.

“I worry,” says Bill Shorten, the opposition’s spokesman on the NDIS, “that there is a faction within the government who just simply want to reduce costs and make it hard to claim.”

Shorten was one of the earliest official voices to back the idea of the scheme. At the time, he was a parliamentary secretary in the Rudd and Gillard governments.

“They [the Coalition] are at risk of losing the confidence of the people in the system,” he says. “And that would be a disaster.”

Reports from NDIS participants who have had funding slashed or low-balled are not new. In some cases, participant plans have gone from $55,000 a year to more than $460,000 in secret legal settlements with the agency.

But people with disabilities, and their advocates, are concerned the proposed model of outsourced “independent assessments” will build chronic underinsurance into the system.

“What is the motivation for it all? People are suspicious,” Shorten says. “This is a government that does a lot of things very slowly but on this one they have been rushing. And it is perplexing, and it creates anxiety.”

In theory at least, functional capacity assessments are the backbone of the NDIS – a scheme designed to ensure support is provided based on a person’s needs, not their diagnosis.

While both Stuart Robert and the National Disability Insurance Agency, which administers the scheme, claim the introduction of independent assessors will ensure consistency in decision-making and equity for participants of the NDIS, experts and advocates disagree.

Late last month, the Victorian Advocacy League for Individuals with Disability (VALID) published an open letter from its chief executive, Kevin Stone, in which he said the league had withdrawn from “any further consultation processes” around the independent assessors measure. These measures are due to begin in the middle of next year.

“The Productivity Commission said in 2011 that independent assessments should only be used when the right assessment tools become available. Those tools still do not exist,” Stone wrote.

“The 2019 Tune Review also said that independent assessments should be optional. We agree. We believe that the unintended consequences of the current proposal will be potentially devastating for people with intellectual disabilities and their families.”

VALID is not alone in this view. In a statement, the spokesperson for WA Disability Services Minister Stephen Dawson said: “The Minister has expressed concern regarding the implementation of Independent Assessments and their alignment with the original intent in the Tune Review and has been advocating for ongoing consultation with people with disability. How they could be implemented in regional and remote areas, what impact they will have on existing participants and new applicants will continue to be discussed through Ministerial forums.”

 

For his part, Stuart Robert says the introduction of independent assessors is not a measure designed to push scores of people off the NDIS, nor to reduce their support payments.

“Independent assessments and legislative changes to provide more guidance and clarity on the boundaries of the NDIS are not designed to reduce people’s budgets, rather it delivers consistency with the original intent of the scheme to ensure equitable access to the NDIS and to allow more flexible use of plans,” he tells The Saturday Paper.

The minister says program boundaries – for example, whether the health or education systems should pay for certain support – will be further clarified, as will detail about “what should and should not be charged to NDIS plan budgets”.

Robert notes that independent assessments will be paid for by the government, as opposed to what happens in the current system, in which NDIS applicants are required to pay for their own assessments from their treating physician.

Despite sector opposition to the change, independent assessments are in essence a fait accompli. But in order to carry out the proposal, the Commonwealth needs to amend the NDIS Act. At the moment, the system they are proposing does not have legal grounding.

“Draft legislation to give effect to the reforms will be released for consultation in 2021, ahead of introduction to parliament,” Robert says, “with a view to it coming into effect by mid-2021.”

While the government has not revealed what elements of the legislation will need to change – or what new rules will need to be passed – it is clear that rules relating to section 35 of the NDIS Act are among them. It seems more likely that the government will also seek to amend section 209 of the law now that it has agreement to do so from states and territories.

This would give the federal minister almost unfettered power to make decisions under the “exclusionary power” of section 35.

Rules that can be made under this section are a crucial piece of the puzzle – part of the powers handed back to the Commonwealth through the bilateral agreements signed with each state and territory, except for WA.

Section 35 allows rules to be made by the federal government that may prescribe “methods or criteria” or other matters that the NDIA chief executive must consider when determining “reasonable and necessary supports or general supports that will be funded or provided under the National Disability Insurance Scheme”.

It also allows the government to decide what “reasonable and necessary supports will or will not be funded or provided”.

In the sex worker case, both the Administrative Appeals Tribunal and the Federal Court confirmed that the Commonwealth could create a power to ban certain supports from the scheme – it just hasn’t chosen to do so yet because, until now, such a rule could have been vetoed by any state.

“The Tribunal correctly identified s.35 as a mechanism available to the executive … to take a policy position on particular kinds of supports,” the Federal Court judgement read.

“The Tribunal otherwise correctly distanced itself from decision-making based on ‘political’ considerations. To this might be added ‘moral’ considerations.”

The Federal Court judgement said that what drove the NDIA’s blanket ban on support for sex work “was never clearly revealed in its explanations to the respondent, its media release, or in its submissions to the Tribunal or to this Court”.

“It is difficult to tell whether an accurate descriptor of the Agency’s position is ‘political’, or ‘moral’ or another adjective,” the court said.

If the government rewrites the legislation governing how rules are made – section 209 of the act – by moving the section 35 power to “Category D”, then this will require only that each state and territory be “consulted in relation to the making of the rules” regarding this section. In theory, once this is done, any Commonwealth minister will be able to ban whatever they like under the scheme.

This will be the final step in giving all significant control of the NDIS to the federal minister.

 

Almost since the scheme began, the government has worried about its cost.

Former arrangements for collective governance worried bean counters at the scheme’s governing agency, as well as Commonwealth ministers. This is because, in almost every case, it is the Australian government on the hook for 100 per cent of cost overruns in the NDIS.

If the scheme goes over budget, the Commonwealth pays. Not the states.

It is notable, then, that since the NDIS was established, every quarterly or annual report from the NDIA has identified “emerging” cost pressures.

Rather than soften over time, the language in these reports has become more alarmist. The latest annual report from the agency refers to a litany of “sustainability” and “cost pressures”.

“In the early years of the scheme … inflation [of costs] reflected the dynamic and rapidly changing environment of a newly established scheme,” it read. “However, these high levels of inflation have persisted over time, despite the increasing maturity of the scheme.”

The report noted that the entry of new participants into the scheme had been expected to slow over the 2019-20 financial year.

“However, this has not occurred,” it read, “and there are few signs that the scheme’s rapid growth is abating.”

For the NDIA, the cost pressures are sprawling: more eligible children than forecast; more people remaining as full-scheme participants even after early intervention requirements have been met; a 39.5 per cent increase between 2018 and 2020 in average support package costs for participants with supported independent living, to $325,000 per annum. Even for those who are not in the intensive supported independent living program, funding per person per year has risen 39.6 per cent to $34,900.

The agency’s own annual report explicitly links the forced rollout of independent assessments to cost-saving measures.

“The immediate and effective implementation of these management responses is required to both improve participant outcomes and ensure the scheme is financially sustainable into the future,” it said.

That is: it is hoped the independent assessors will bring down costs. Fewer people will be eligible for the scheme, and those in it may get fewer services.

 

In the NDIA’s latest corporate plan, covering 2020 to 2024 and released earlier this year, the agency goes further in its ambition for reform.

“We are proactively addressing pressures, including support costs for Supported Independent Living where costs have been increasing significantly above normal inflation,” agency chair Helen Nugent wrote in her introduction.

“In addition, we are managing the pressures in entry and funding decisions, particularly in relation to how the Scheme interfaces with mainstream services, and community and informal supports.”

Under the heading “strategic risks”, the agency notes that “costs, scope, eligibility or funding approvals deviate significantly from funding expectations”.

“We must safeguard the financial sustainability of the Scheme in a risk-aware manner, providing reasonable and necessary supports based on independent assessments of a participant’s needs and the impact of disability on daily life,” the corporate plan says, noting that through to the end of next year the agency must “strengthen policies, procedures and controls to ensure financial sustainability, particularly [on] reasonable and necessary [supports]”.

From the beginning of 2018, the NDIA has been working on what was then a secret plan – given the internal moniker Operation Green Light – to deliver functional assessments as a gatekeeper to the NDIS itself.

The plan was revealed during a senate estimates hearing on June 1 that year in response to questions from Labor senator Carol Brown directed at surprised agency bosses. The agency leaders scrambled to explain the concept and in so doing ended up speaking plainly.

“This is about making sure that the right people get into the scheme who are eligible for the scheme,” Rob De Luca, then chief executive at the NDIA, told the hearing.

“It’s about an access decision, ensuring that the scheme is set up to service those who should be in the scheme.”

In the same hearing, agency staff were peppered with questions about an apparently “accidental” change made to an access list of conditions that automatically qualify people for entry to the NDIS.

In the unannounced revision, autism with a severity level of two – there are three levels – was removed from the list. If this were carried through, potential participants would all have to be tested before their NDIS access was agreed.

“I think the key focus for us from a sustainability perspective is a number of things we need to continue to monitor, including making sure we’ve got the right people in the scheme with the right packages,” De Luca told senate estimates.

“That’s really core to what we need to focus our attention on. Whether it’s autism or other disabilities, we monitor that in line with the expectations.”

Now, under Stuart Robert’s proposed reforms, not only will the automatic access list be deleted entirely, but these functional assessments will apply to everyone whether they are seeking access to the scheme or already in it.

Just five months after that senate estimates hearing, in November 2018, the NDIA launched an independent assessment pilot in eight metropolitan NSW locations.

The pilot was tendered to a West Australian company, Advanced Personnel Management (APM), which The Saturday Paper understands is now one of the frontrunners for the open tender to deliver the full national rollout.

APM, which donated $100,000 to the Liberal Party during the 2018-19 financial year, when the assessment pilot began, was founded by Megan Wynne.

It has since become the largest provider of government-funded disability employment services and made about half a billion dollars in revenue from other outsourced government programs, including Jobactive, home care assessments in the aged sector, and training through its subsidiary company, Management Consultancy International (MCI). The Saturday Paper is not suggesting any impropriety in the awarding of these contracts, or any others, to APM or MCI.

MCI has testimonials from major corporations such as Nestlé and British American Tobacco Australasia.

Wynne, whose estimated personal fortune rose to more than $300 million earlier this year when American private equity firm Madison Dearborn Partners bought a controlling stake of APM, is now one of just two investors in an NDIS housing supply company named Sana Living.

Sana Living’s chief executive is former Human Services minister and WA Coalition MP Michael Keenan.

The APM assessment pilot had only 500 volunteers. Of those, just 140 surveys were returned about its effectiveness, according to Bill Shorten.

“And only 100 of the returned surveys said they found the process satisfactory,” he says.

“So, it’s just poor evidence-based work and reform, on the basis of 100 surveys, to change the system for 400,000 people. And they haven’t come clean with their facts and figures, the actuarial modelling. Who are the winners and who are the losers?”

The government has made clear to potential and current NDIS participants that independent assessments will not “replace the relationship a person has with their treating medical or allied health professionals”. And they will still be required to pay for their own health experts to “provide evidence of disability to support their request to access the NDIS”.

“This includes information and clinical judgement that an impairment is permanent, or likely to be permanent,” the NDIS reform information paper says.

Many fear a model proposed to end inequity in assessments will instead just duplicate unfairness with more layers of bureaucracy.

Former prime minister Julia Gillard wrote the NDIS into law. This week, she told The Saturday Paper that people “campaigned for the NDIS because they wanted to be able to make decisions about their lives and to customise the best mix of services for their unique circumstances, needs and life plans”.

“Any reforms to the NDIS must remain true to these aims.”

Both the federal government and the NDIA claim the reform intentions are pure. Yet trust in the system has been brittle for years. Thousands have had support stripped or reduced only to have the decisions reversed by competent tribunals. At every turn the agency has briefed expensive silks to crush people in court before conceding, mostly during secret settlements, that its support allocation was too little. In other cases it has fought until the bitter end and lost anyway.

Since the beginning, people with disabilities have learnt that promises have a habit of turning sour unless they fight. That is where they are now.

This article was first published in the print edition of The Saturday Paper on Dec 5, 2020 as "Exclusive: The seven-year plot to undermine the NDIS".

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Rick Morton is The Saturday Paper’s senior reporter.