Government Fails to Police NDIS, Allowing $2 Billion in Misuse

Over $2 billion of National Disability Insurance Scheme (NDIS) funds are misappropriated annually, with participants spending on drugs, alcohol, luxury goods, and other non-essential items.

At a budget estimate hearing on June 3, NDIS Integrity Chief John Dardo highlighted rampant fraud and corruption. Many participants, along with unscrupulous plan managers and service providers, misuse the scheme. Dardo revealed, “There would be thousands of cases where participants are claiming things that are not consistent with their plan.” Instances included extravagant holidays and expensive cars, far beyond approved plans.

One participant on a $480,000 annual plan fraudulently claimed $40,000 monthly, diverting half to personal expenses like mortgage payments. While some misused funds were recovered, others refused to repay.

Dardo also exposed organized crime involvement, with plan managers facilitating drug purchases using NDIS money. He described a scenario where a plan manager provided cash for illicit substances at an ATM. “These are not genuine providers,” he stated, urging their removal from all government services.

The estimated misuse accounts for over 5% of NDIS funding yearly. Dardo admitted the impossibility of prosecuting all fraud cases, suggesting systemic redesign and new laws to curb dodgy providers. Despite government efforts, including over 100 fraud cases in court, NDIS costs continue to soar, with federal and state spending rising by 21% to $44.3 billion in 2023-24, and projected to increase further.

The government’s failure to police the NDIS effectively has allowed significant misuse, exacerbating budgetary challenges and undermining the scheme’s integrity.