Report 25: 2019-20

WA’s Transition to the NDIS

Audit finding – NDIS is a major and complex reform that will significantly change disability funding and service delivery in WA

Historically, WA has had a mature disability service system with key features similar to the NDIS in place 

Since the early 1990s, WA has had a system for disability services that included local area coordination and individualised funding. In addition to participant choice, these features are key to the nationally delivered NDIS. The extent of access to State-funded support depended on available funding. This resulted in waitlists and, for some, a high chance of not accessing all the disability support they needed.

The former Disability Services Commission spent approximately $877 million per year on disability services between 2013-14 and 2016-17. The majority (74%) of the funding was allocated to not for profit organisations (NFP) to provide support services.

The Commonwealth also contributed around 19% of funding for State-administered disability support prior to the commencement of the NDIS.

Table 1 outlines the disability services funding source and distribution in WA from 2013-14 to 2017-18, prior to the NDIA assuming full responsibility for the NDIS in WA.

Disability funding source and distribution in WA

Source: OAG using information from Communities
Table 1: Disability funding source and distribution in WA since the start of the NDIS trials

In 2012, the former Disability Service Commission launched the ‘My Way’ system. This system embedded individualised funding and local area coordination to support people with disability. It was rolled out in 4 areas across the State:

  • Perth Hills
  • Cockburn-Kwinana
  • Goldfields
  • Lower South West.

‘My Way’ provided more choice and greater flexibility than was previously available. ‘My Way’ became the WA NDIS in July 2014.

When the Bilateral Agreement between the WA and Commonwealth governments was signed in December 2017, around 26,090 people were receiving disability-related support from the State, at a cost of over $1 billion per year. Communities employed approximately 1,450 full time equivalent staff in its disability services area. This included staff who were part of the corporate services division.

NDIS is a significant reform with potential benefits for an estimated 48,000 Western Australians with a disability by 2023

The NDIS is a large and complex national reform that is being rolled out in all states and territories across Australia. It is changing the way disability support is provided and up to 48,000 Western Australians with a disability are modelled to be in the scheme by 30 June 2023, almost double the number who were accessing State services in 2017. The NDIS aims to help people by:

  • providing eligible people with access to an insurance-based scheme that covers the cost of reasonable and necessary disability support
  • providing people with disability more choice and control over their support
  • guaranteeing funding for support into the future
  • increasing Commonwealth and WA funding into the WA disability sector from an average of $877 million a year between 2013-14 and 2016-17, up to $1.9 billion in 2022-23.

The rollout of NDIS is being phased and implemented by geographical region with planned targets for when people will enter the scheme. By 1 July 2020, an estimated 39,000 people are planned to participate in the NDIS. This will include both people who are moving across from State disability services, and new entrants. The estimated annual intake of participants for the first 3 years of the transition is outlined in Table 2.

From 2020-21 to 2022-23, the NDIS will provide additional capacity for new participants that are currently not accessing State services. Participation is modelled to reach up to 48,000 by 2022-23. This was based on the Commonwealth’s original estimate of 46,531 eligible participants by 2019-20, plus population growth of 1% per annum.

In WA, Communities is the lead entity but implementation is a shared responsibility

The Commonwealth, State government, NDIA and individual entities impacted by the NDIS have a shared responsibility to ensure a successful transition to the scheme. In WA, Communities is the main State entity responsible for implementing the WA operational and transfer plans. These plans serve as a road map to transfer existing WA NDIS participants and transition to the full implementation of the NDIS in WA. Both plans set out the key deliverables agreed between NDIA, and the State and Commonwealth governments. Representatives from Communities also co-chair the committee responsible for overseeing the transition to the NDIS.

As there is a bilateral agreement that includes joint funding, DPC and Treasury also have some ongoing involvement. Specifically, DPC monitors and supports progress and governance processes. Treasury is responsible for providing advice and managing the financial impact of the NDIS on the State finances and budget arrangements.

Since July 2018, the NDIA has been responsible for the administration of the NDIS in WA. Due to the shared responsibilities of entities at a national and State level, it will be important for Communities to effectively track progress against the 2 plans to ensure the transition progresses as planned.

The State agreed to pay around $740 million per year to support Western Australians accessing the NDIS

In the 6 years from 2017-18 to 2022-23, the WA government will pay on average $740 million a year to support Western Australians accessing the NDIS. The scheme is jointly funded and until 30 June 2020 the WA government will pay a fixed 60% contribution per person for actual WA participants and the Commonwealth will pay 40%.

From 1 July 2020, the WA government and Commonwealth will each pay an equal contribution but this will be based on a planned number of participants instead of people actually accessing the NDIS. By 2022-23, it is estimated that $1.9 billion a year of State and Commonwealth contributions will be available to support Western Australians with a disability in the NDIS.

Table 2 outlines the estimated annual contributions for the WA government and the Commonwealth over the 6 year transition. Because not all participants roll in at the beginning of the year, full year equivalents were used to calculate WA and Commonwealth funding contributions.

WA and Commonwealth annual funding contribution to the NDIS during the transition

Source: OAG using information from Treasury and the December 2017 Bilateral Agreement
* Payments are due only for actual participants in the scheme for the first three years.
Table 2:
WA and Commonwealth annual funding contribution to the NDIS during the transition

In 2018-19, WA spent around $1.3 billion on the delivery of disability services, of which $325 million was its contribution to the NDIS. Commonwealth grants and contributions to the State amounted to $274 million while the State appropriation was $922 million in 2018-19. The lower actual contribution to the NDIS compared with minimum estimates for that year (Table 2, $460 million) highlights the slower rate of transition to the new scheme.

The Commonwealth is responsible for all administration costs of the scheme. Joint NDIS funding will pay for local area coordinators who assist people to develop, implement and monitor the progress of participant plans and support.  

Moving to NDIS in WA is not straightforward because people were previously on 3 different schemes

The State and Commonwealth agreed to a longer transition period of 6 years for WA rather than the average 3 years in other jurisdictions. WA was the only state in Australia to run its existing disability scheme while 2 separate trials of the NDIS were operating. One of the trials was administered by Communities and the other by the NDIA. Consequently, until July 2018, there were 3 different ways that people with disability could access support (Figure 2), depending largely on where they lived. Having 3 separate systems meant that the transition was particularly challenging.

Source: OAG using Communities information
Figure 2: Support for people with disability in WA at July 2018

An estimated 8,711 (actual 7,597) participants needed to transfer from WA NDIS to the nationally delivered NDIS. This transfer involved more work by Communities compared to those not in the WA NDIS. Communities staff had to:

  • seek consent from all WA NDIS participants transferring to the nationally administered NDIS (including meetings with the individual/family, where requested)
  • give NDIA participant data and information (individual’s details, primary contact and how complex their disability is) in the required format.

To manage the increased workload from the transfer process, Communities advised us that it recruited an additional 6 staff in the local operations area between June and December 2018.

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