This report contains the findings from my Office’s performance audit of Western Australia’s (WA) transition to the National Disability Insurance Scheme (NDIS). At the time of this report, WA is in the third year of a 6‑year transition.

The December 2017 announcement that the State would transition to the Commonwealth administered NDIS marked a substantial change in the way Western Australians with a permanent and significant disability would receive funding and access the disability services they need to realise their potential and participate in the community.

The scheme is expected to double the funding for disability services in WA to nearly $2 billion a year, and improve access to support services for over 40,000 eligible Western Australians by 30 June 2023. Under the NDIS, overall funding for disability services is demand-driven and uncapped with the Commonwealth paying 50% of the costs. This compares with pre-NDIS arrangements where the Commonwealth covered approximately 19% of the cost of public disability services in WA (Table 1).

I acknowledge the complexity of this significant social reform and the considerable potential benefits for people with disability, their families and carers. I also acknowledge that change on this scale is particularly challenging, as it involves many responsible parties and participants, and so many varied systems, processes and case-specific judgements, each of which has a very real human impact.

State entities have drawn on WA’s long experience in delivering disability services across a vast geographic area, and learnt from the experiences of other jurisdictions, to effectively manage the early risks to WA from transitioning to the NDIS. Lengthy negotiations and studies that analysed actual disability prevalence in WA resulted in savings of potentially several hundred million dollars in contributions to the Commonwealth scheme (Table 2).

I recognise the State and Commonwealth entities’ commitment to ensuring the transition achieves the best possible outcomes for all Western Australians with disability. However, the State’s transition to the scheme has not been without its challenges for people with disability, government entities and service providers. This is underscored by the rate of transitioning participants to the NDIS, which has not progressed as planned.

While State entities to date have addressed many emerging challenges, this report highlights the need for these entities to continue to closely monitor and manage ongoing transition risks so the expected benefits of the scheme are fully realised for people with disability and the State. This includes the important step of formalising documentation to ensure the State only pays the Commonwealth for the actual number of participants in the scheme from 1 July 2020 to 30 June 2023.

This early implementation review, conducted in parallel with WA’s peak transition activities, provides transparency to the Parliament and the community on the nature of the changes, how implementation is tracking and the key risks in a significant area of State service delivery and expenditure. It also provides foundational understanding that will support ongoing scrutiny of disability service provision in WA.