FOI 21/22-0187
DOCUMENT 1
ANSWER TO QUESTION
ADDITIONAL ESTIMATES SPILL OVER
QUESTION ON NOTICE
PDMS reference:
SQ21-000071
Date asked:
03 May 2021
Asked by:
Senator Steele-John
The attached answer has been approved by the Minister for the National
Disability Insurance Scheme and Government Services.
SENATOR THE HON LINDA REYNOLDS CSC
/ /2021
Encl.
Page 1 of 38
FOI 21/22-0187
Senate Community Affairs Legislation Committee
Additional Estimates – 03 May 2021
ANSWER TO QUESTION ON NOTICE
Social Services Portfolio
National Disability Insurance Agency
Topic: Scheme Sustainability
Question reference number: NDIA SQ21-000071
Outcome Number: 3
Senator: Steele-John
Type of Question: Spoken. Hansard Page: 39
Date set by the Committee for the return of answer: 21 May 2021
Question:
Minister – thank you very much for your reflections … Q3 report from the NDIA board and
the NDIA will be released in a couple of weeks and I have had a talk to board about level of
detail in that report and I am very confident that when published it will contain significantly
more information and more data than it had previously. We also have the budget coming in a
week and around that budget time I will certainly be releasing more information...
Steele-John – In terms of your concerns specifically around scheme sustainability which data
sets have you been provided with that speak to that are the source of your concern?
Minister – so some of those will be in Q3 report which will be published in a couple of weeks
and I can take on notice some more financial data to the committee, it is a combination of
sources so obviously the budget documents themselves and in terms of the 3.9 billion we had
to put in extra. So it is the budget documents themselves, it is also going back and having a
look at the estimates from Productivity Commission in 2011, 2017 and the estimates not only
of growth, package numbers but also how much the packages themselves were anticipated to
have costed. So as I said in my opening statement over the last couple of years there was a
lesser take up than what we had originally planned and budgeted for with the states and
territories. We were thinking over the last couple of years it would be about $150,000 per
year but that was averaging at about $100,000 so we had less packages on board at that time
but that masked the fact that the packages themselves on average were far more expensive
and we are now at that point where the numbers are now where we thought they would be at
the average budget cost so we can provide you with all those numbers and the trajectories, I
would be very happy to do that chair.
Answer:
There is continued significant pressure on Scheme sustainability due to higher than expected
numbers of participants and higher than expected average payments per participant.
Page 2 of 38
FOI 21/22-0187
The number of participants in the early phase-in sites increased by 13% in 2019-20 (as
demonstrated in Chart 1), which is well above population growth and ageing. Additionally,
the average payment per participant has increased by 12.5% per annum for the past three
years, which is significantly greater than:
• Wage inflation of 1.5% to 2.5% per annum.
• The assumptions in the 2017 Productivity Commission Report of around 4% per annum.
• Future portfolio budget estimates of around 2% per annum.
Plan budgets have increased for participants the longer they are in the Scheme and the
utilisation of these plan budgets has also increased.
Chart 1: Year-on-year increases in active participants (Financial Year)
Further, average payments have increased by 17% per annum over the last three years to 31
March, for both participants in Supported Independent Living (SIL) and participants not in
SIL. Charts 2 and 3 below refer.
Chart 2: Average annualised payments per participant by year – SIL participants
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FOI 21/22-0187
Chart 3: Average annualised payments per participant by year – Non-SIL participants
For participants who have been in the Scheme and received at least five plans (around 19% of
participants), payments have increased by 38% per annum.
Chart 4: Plan budgets, utilisation and payments for participants who have received five
plans at 31 March 2021
For participants who have been in the Scheme and received four plans (around 15% of
participants), payments have increased by 43% per annum.
Further, approximately 44% of participants are on their first or second plan, resulting in
significant upside risk to payment inflation.
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FOI 21/22-0187
Chart 5: Plan budgets, utilisation and payments for participants who have received four
plans at 31 March 2021
The rates of growth outlined above pose a significant challenge to overall Scheme
affordability.
The Portfolio Budget Statements allocation for the 2020-21 Financial Year is $23.3 billion
(Chart 6 refers). If recent rates of growth in average payments and new entrants are
extrapolated, without mitigating actions, total overall Scheme costs could potentially be in
excess of $40 billion within three years.
Chart 6: Extrapolation of scheme cost without mitigating actions - $billion
Extrapolation of scheme cost without mitigating actions -
$billion
50
40+
45
40
36+
s 35
ion
ill
29+
30
$ b
23+
25
20
15
10
5
0
2019-20
2020-21
2021-22
2022-23
Page 5 of 38
FOI 21/22-0187
Senate Community Affairs Legislation Committee
Additional Estimates – 03 May 2021
SENATE
QUESTION ON NOTICE CLEARANCE SHEET
Number:
SQ21-000071
Date Due to Table Office:
21 May 2021
Cleared by: Martin Hoffman
Chief Executive Officer
s22(1)(a)(ii) - irrelevant material
Contact Officer:
Lisa Studdert
Deputy Chief Executive Officer
Markets, Government and Engagement
(s22(1)(a)(ii) - irrelevant material
Additional Comments:
Previous answers: [Select at least one option below] ☒ This question (or similar)
has not been asked at a recent Senate Estimates hearing.
☐ This question (or similar)
has been asked at a recent Senate Estimates hearing.
Ref Nos: [Add PDR No/s]. Copy/ies attached and wording has been used in preparing this response.
☐ This question (or similar) has been asked previously via a Parliamentary / Parliamentary Committee Inquiry
Question on Notice.
Ref Nos: [PDR No/s]. Copy/ies attached and wording has been used in preparing this response.
Data Verification Source: N/A
Data Checked by: N/A
Departmental Clearance:
Cleared by email on:
16 May 2021 by:
Name:
Martin Hoffman
Position:
Chief Executive Officer
Contact phone number:
(s22(1)(a)(ii) - irrelevant material
Page 6 of 38
FOI 21/22-0187
DOCUMENT 2
ANSWER TO QUESTION
JOINT STANDING COMMITTEE HEARING
QUESTION ON NOTICE
PDMS reference:
IQ21-000022
Date asked:
18 May 2021
Asked by:
Hon Kevin Andrews MP
The attached answer has been approved by the Minister for the National
Disability Insurance Scheme and Government Services.
SENATOR THE HON LINDA REYNOLDS CSC
/ /2021
Encl.
Page 7 of 38
FOI 21/22-0187
Joint Standing Committee on the National Disability Insurance Scheme
Independent Assessments
Public Hearing – 18 May 2021
ANSWER TO QUESTION ON NOTICE
National Disability Insurance Agency
Topic: Financial Sustainability
Question reference number: IQ21-000022
Senator: Carol Brown
Type of Question: Written.
Date set by the Committee for the return of answer: 01 June 2021
Question:
Question 1
The NDIA and the Minister have suggested that over the last three or four years NDIS costs
have increased at 12 per cent per annum or 50 per cent in total.
a. Would the NDIA provide full details on how these numbers have been calculated?
b. Given that the SCHADS award was being adjusted upwards on an annual basis during
this period every December until December 2020, what would the increases in NDIS
costs have been without changes in the SCHADS award?
c. In addition to taking account of changes in the SCHADS award, what would the
increases in NDIS costs have been without the additional temporary COVID
surcharge on NDIS prices and the Temporary Transition Price (TTP)?
d. In addition to taking account of the factors in b) and c) above, what would the
increases in NDIS costs have been if changes in all plans between Plan 1 and Plan 2
had been excluded from the calculation of cost increases?
e. In addition to taking account of factors b), c) and d) above, what would the increases
in NDIS costs have been if changes in all plans between Plan 2 and Plan 3 had also
been excluded from the calculation of cost increases?
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FOI 21/22-0187
Answer:
a. The NDIA has outlined in the NDIS Quarterly Report to disability ministers how average
payments per participant have increased over the 3 years to 31 March 2021. This is shown
on page 69, figure 38 of the Quarter 3 report to Disability Ministers available at:
https://www.ndis.gov.au/about-us/publications/quarterly-reports . Average payments per
participant in the 12 months to 31 March 2018 were $37,400. This increased to $53,200
per participant in the 12 months to 31 March 2021. The increase over the 3 years is 42%
which is an average annualised increase of 12.5%.
b. For workers covered by the Social, Community, Home Care and Disability Services
(SCHADS) Industry Award 2010, wage increases apply as a result of the Equal
Remuneration Order (ERO) and the Fair Work Commission’s Annual Wage Review.
These increases resulted in an increase of 8.5% in excess of the wage increases shown in
Figures 3 and 4 on page 11 of the Quarter 3 report to Disability Ministers. Allowing for
the proportion of price represented by wages (80-90%), and the proportion of NDIS costs
represented by attendant care (about 75%), this equates to an overall increase in cost per
participant of about 5.5%
over the
3 year period. Hence the increase without the
SCHADS award would have been 36.5%
c. The loading due to the Temporary Transition Price (TTP) represents 0.8% of NDIS costs.
The additional expense arising from COVID-19 represents approximately 0.5% of NDIS
costs. The increase in plan values excluding both the TTP and SCHADS related increases
would have been about 35%.
d. Figures 6 and 7 on pages 13 and 14 of the Quarter 3 report to Disability Ministers outlines
that increases in costs per participant have been:
92% for participants on their fifth plan from Plan 3 to 5
65% for participants on their fourth plan from Plan 3 to 4
These increases are similar to or higher than increases observed for these participants
from Plan 1 to 2 and from Plan 2 to 3. Hence the increase excluding the increases from
Plan 1 to 2 is not lower than 35%.
e. Figures 6 and 7 on pages 13 and 14 of the Quarter 3 report to Disability Ministers outlines
that increases in costs per participant have been:
92% for participants on their fifth plan from Plan 3 to 5
65% for participants on their fourth plan from Plan 3 to 4
These increases are similar to or higher than increases observed for these participants
from Plan 1 to 2 and from Plan 2 to 3. Hence the increase excluding the increases from
Plan 2 to 3 is not lower than 35%.
Page 9 of 38
FOI 21/22-0187
Joint Standing Committee on the National Disability Insurance Scheme
Independent Assessments
COMMITTEE
QUESTION ON NOTICE CLEARANCE SHEET
Number:
IQ21-000022
Date Due to Table Office:
1 June 2021
Cleared by: Lisa Studdert
Deputy Chief Executive Officer
(s22(1)(a)(ii) - irrelevant material
Contact Officer:
Renelle Forster
Branch Manager, Parliamentary, Ministerial & FOI
Parliamentary, Ministerial & FOI
(s22(1)(a)(ii) - irrelevant material
Additional Comments:
Previous answers: [Select at least one option below] ☒ This question (or similar)
has not been asked at a recent Senate Estimates hearing.
☐ This question (or similar)
has been asked at a recent Senate Estimates hearing.
Ref Nos: [Add PDR No/s]. Copy/ies attached and wording has been used in preparing this response.
☐ This question (or similar) has been asked previously via a Parliamentary / Parliamentary Committee Inquiry
Question on Notice.
Ref Nos: [PDR No/s]. Copy/ies attached and wording has been used in preparing this response.
Data Verification Source: N/A
Data Checked by: N/A
Departmental Clearance:
Cleared by email on:
2 June 2021 by:
Name:
Lisa Studdert
Position:
Deputy Chief Executive Officer
Contact phone number:
s22(1)(a)(ii) - irrelevant material
Page 10 of 38
FOI 21/22-0187
DOCUMENT 3
ANSWER TO QUESTION
JOINT STANDING COMMITTEE HEARING
QUESTION ON NOTICE
PDMS reference:
IQ21-000024
Date asked:
18 May 2021
Asked by:
Hon Kevin Andrews MP
The attached answer has been approved by the Minister for the National
Disability Insurance Scheme and Government Services.
SENATOR THE HON LINDA REYNOLDS CSC
/ /2021
Encl.
Page 11 of 38
FOI 21/22-0187
Joint Standing Committee on the National Disability Insurance Scheme
Independent Assessments
Public Hearing – 18 May 2021
ANSWER TO QUESTION ON NOTICE
National Disability Insurance Agency
Topic: Financial Sustainability
Question reference number: IQ21-000024
Senator: Carol Brown
Type of Question: Written.
Date set by the Committee for the return of answer: 01 June 2021
Question:
Question 4
In response to question on notice NDIA IQ 21-000010 in part d. the NDIA states:
“As with TSP's, draft budgets will provide a link between the Scheme's overall funding and
the allocation to each individual participant.”
Would the NDIA please advise the Committee, if Independent Assessments go ahead, what
estimate of the Scheme's overall funding will be used to calibrate draft budgets in 2021 – 22?
Will it be $26.5 billion which is the forecast for total participant plan expenses as set out in
the 2021 – 22 Portfolio Budget Statement or another estimate? If it is another estimate of
overall funding what is the basis for choosing a forecast which is different to the projection in
the Commonwealth budget?
Further, given that the NDIA is only responsible for setting plan sizes and actual utilisation
has consistently been below 100 per cent, what assumptions about plan utilisation will be
built into projections of the Scheme's overall funding and hence also draft budgets?
Answer:
The National Disability Insurance Scheme (NDIS) is a demand driven scheme. The Portfolio
Budget Statement allocation for 2021-22 includes $26.49 billion for reasonable and necessary
participant supports. This amount excludes Agency operating costs.
The NDIA Scheme Actuary produces a Financial Sustainability Report (FSR) each year
which includes actuarial modelling of scheme projections, including plan budget sizes and
utilisation. The NDIA publishes in the Annual Report each year, a summary of the FSR. This
summary, which is on pages 93-96 of the 2019-20 Annual Report, discusses scheme
projections, sustainability pressures and management responses to address these. As required
under section 180E of the National Disability Insurance Scheme Act 2013, the Annual FSR is
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FOI 21/22-0187
independently peer-reviewed by the Australian Government Actuary. Page 97 of the 2019-20
Annual Report refers.
Page 13 of 38
FOI 21/22-0187
Joint Standing Committee on the National Disability Insurance Scheme
Independent Assessments
COMMITTEE
QUESTION ON NOTICE CLEARANCE SHEET
Number:
IQ21-000024
Date Due to Table Office:
1 June 2021
Cleared by: Lisa Studdert
Deputy Chief Executive Officer
(s22(1)(a)(ii) - irrelevant material
Contact Officer:
Renelle Forster
Branch Manager, Parliamentary, Ministerial & FOI
Parliamentary, Ministerial & FOI
(s22(1)(a)(ii) - irrelevant material
Additional Comments:
Previous answers: [Select at least one option below] ☒ This question (or similar)
has not been asked at a recent Senate Estimates hearing.
☐ This question (or similar)
has been asked at a recent Senate Estimates hearing.
Ref Nos: [Add PDR No/s]. Copy/ies attached and wording has been used in preparing this response.
☐ This question (or similar) has been asked previously via a Parliamentary / Parliamentary Committee Inquiry
Question on Notice.
Ref Nos: [PDR No/s]. Copy/ies attached and wording has been used in preparing this response.
Data Verification Source: N/A
Data Checked by: N/A
Departmental Clearance:
Cleared by email on:
2 June 2021 by:
Name:
Lisa Studdert
Position:
Deputy Chief Executive Officer
Contact phone number:
s22(1)(a)(ii) - irrelevant material
Page 14 of 38
