Back in 2012, Australia's Labor Prime Minister Julia Gillard pushed through a new entitlement called the National Disability Insurance Scheme (NDIS). The basic idea is that the Australian government would provide direct funding to individuals with disabilities. Those individuals would then choose how to spend the money to provide for their own support.
There were some pilot programs starting in 2013 and by 2016 the program began to be opened up one geographic region at a time until it became universal in 2020. But the program grew much more quickly than expected and cost much more as well. Within two years of it going nationwide, there was concern that the program had been heavily infiltrated by organized crime. This story is from 2022:
An investigation by Nine newspapers has alleged members of the Hamzy and Alameddine crime groups in Sydney and other organised criminal gangs have been rorting billions of dollars from the NDIS scheme.
What is "rorting" you ask? It's Australian slang for fraud or, in this case, ripping off the system.
The head of the Criminal Intelligence Commission, Michael Phelan, told Nine newspapers that criminals were systemically "ripping off our most vulnerable people".
Mr Phelan said there was evidence of criminals creating fake clients, skimming money, exploiting and intimidating clients and using pharmacy employees as "spotters" to find new NDIS clients to target.
Phelan warned at the time that up to 20 percent of the money was going to fraud aka rorting. By 2024 he said he might have been too conservative.
Mr Phelan said since taking on the job as acting commissioner of the NDIS Quality and Safeguards Commission, he had learned criminal influence was possibly worse than he thought.
"I certainly made those comments in 2022, in my position as head of the crime commission, and to be perfectly honest I haven't stepped back from that position," Mr Phelan said.
"When I made that assessment, we didn't have perfect information before us, we only had what we got from the intelligence inside the commission ... now I've been involved with working in the NDIS, it is arguable I was a little conservative — particularly with some of the things that have been happening."
By 2026 it had become clear to almost everyone that something needed to change because the program was spending far too much money.
When the NDIS started, it was estimated it would cost about $22bn a year, with about 475,000 participants. But this financial year it has ballooned to $54bn and the scheme now supports more than 700,000 people. Those figures are expected to keep growing, which is why the government is proposing a massive reset.
"It has grown too big too fast," says Hannah Orban, Senior Associate at the Grattan Institute and co-author of a report Saving the NDIS. According to her research, each of the participants receives an average of approximately A$65,000 ($44,800) of funding per year. Some, such as those with complex needs, receive considerably more; others receive far less.
This year a plan was presented to fix the program and it seems to be headed for passage because no one thinks the rorting can go on.
The National Disability Insurance Agency estimates 6 to 10 per cent of payments made to participants are lost to inflated invoices, organised crime or ineligible payments each year, or about $2.8 billion to $4.6 billion.
On average, it equates to as much as $6,500 in payments per NDIS participant.
The Australian Criminal Intelligence Commission has said the scale of integrity issues inside the NDIS extends beyond "isolated or opportunistic" misuse and includes deliberate fraud and organised exploitation consistent with the behaviour of serious organised crime groups...
Just on Thursday, Australian Federal Police charged a 33-year-old Sydney man over $1.5 million in claims for NDIS services which were not provided, alleging he was also suspected to be associated with organised criminal groups.
Police allegedly linked the man to 80 NDIS claims submitted against 22 "unknowing" participants in early 2024.
But of course once you open the government coffers everyone who benefits wants the money to keep flowing, even if they weren't the intended recipients.
There's also been criticism that people are using the NDIS to access support not originally intended for the scheme, which was designed to address the needs of those with permanent or significant disabilities. According to a study by the Australian National University, there's been a 32% increase in the prevalence of autism since the NDIS was introduced. Experts, however, say the explanation for this is simple...
One of the other criticisms of the scheme has been that providers have gamed the system, offering unnecessary and expensive services.
"Where there's government money, there have been over-servicing and over-charging and shonky providers," says Shorten. "Many are good providers, but some are bad. That's the nature of a government scheme: people will hone in on it and try and slice off amounts for themselves."
So there you have it. It sounds a lot like the hospice fraud happening in Los Angeles and other similar fraud happening elsewhere in the U.S. Once there's government money on offer, crooks and thieves will find a way to get it. And even apart from that, the programs always seem to grow to cover more people and cost the taxpayers more money. In this particular case, the NDIS has only been around for 14 years and only six as a nationwide program, but it's already going broke and rife with rorting.
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