Minister for the NDIS Bill Shorten said consulting with the disability sector on ways to reduce the “torrent of appeals” was one of his first priorities, blaming the former Coalition government for spending millions on private lawyers to fight NDIS participants in court.
“While there must be full rights to appeal, it is critical that we improve processes to ensure early and fair resolution, before people with disability have no option but to take matters to court,” he told The Australian Financial Review.
Responses to a question on notice from outgoing Centre Alliance senator Stirling Griff, released last week, show a surge in taxpayer-funded legal spending by the NDIA, which is the agency that administers the NDIS.
In the first 10 months of the current financial year, the NDIA spent $41.4 million – or $4.1 million a month – on legal costs related to cases at the AAT, up from $17.3 million in the 2020-21 financial year.
The figures dwarf the funding provided to disability advocacy providers and legal aid commissions as part of the NDIS Appeals Program, which stood at $5.1 million in the first 10 months of the current financial year.
Former disability discrimination commissioner Graeme Innes said it was “ludicrous” how much money was being spent by the NDIA on legal bills.
The surge in AAT cases was a result of participants fighting cuts to the size of their support plans.
“The average cut is 4 per cent. But some people have had huge cuts – I know of people who’ve had 40 and 50 per cent cuts to their plans,” Mr Innes told the Financial Review.
Scheme to double
“So inevitably, people are going to seek to have that reviewed, and the only mechanism to have it reviewed is the AAT.”
Mr Innes said there needed to be a mediation mechanism introduced before the AAT, and said the existing appeals process favoured the NDIA.
“The agency sends along teams of lawyers from expensive law firms,” he said. “Most people with disabilities tend to turn up with no advocate, or one advocate who may or may not be legally trained”
The surge in legal expenses comes amid estimates the annual cost of the NDIS is on track to double to $60 billion by 2030.
The forecasts reflect strong growth in the number of people using the scheme and the average payments made to participants, which outstrip projections made by the productivity commission.
The average NDIS participant receives a payment of $55,200, with the figure increasing 10.8 per cent annually over the past three years.
As at March 2022, there were 518,668 NDIS participants, with the NDIA’s annual financial sustainability report projecting this number to increase to 670,000 by June 2025 and almost 860,000 by June 2030.
By contrast, the productivity commission forecast in 2017 that 582,860 Australians would use the scheme in 2030.
Mr Innes said up to 300,000 NDIS participants never received services before the NDIS was established.
Left-wing think tank Per Capita said spending on the NDIS had a large economic multiplier.
In a report released last November, it estimated that every $1 billion spent on the NDIS boosts economic activity by $2.25 billion.