National Disability Insurance Agency 'saves' money by not spending

The National Disability Insurance Agency underspent its budget by $18 million in the 2013-14 financial year, driving savings by reducing formal support in favour of "informal support" provided by family and community members.

According to the  NDIA annual report, tabled in federal parliament on Wednesday, only $130.9 million of an allocated $148.8 million was spent on supporting people with disabilities in 2013-14.

The NDIA is implementing the federal government's National Disability Insurance Scheme, which is operating in four trial sites around Australia ahead of the $20 billion program's full rollout in 2019.

Its annual report showed average packages cost $34,600 a year, less than the $35,000 average estimated by the Productivity Commission.

According to the annual report: "In the first quarter, the costs of the plans approved were found to be above the average annualised package cost used for modelling Scheme funding. A review of decision making found that early plans included an over-reliance on formal supports. Changes were made to encourage planners to consider the role of community and mainstream supports as well as formal supports."Costs were partly reduced through "increasing emphasis on informal supports".

The findings raise questions for disability advocates, who say funding packages they have been offered do not cover "reasonable and necessary" supports.

Families of children with autism have complained that they have been told they will receive funding for less than six hours of early intervention therapy, less than a third of the recommended 20 hours.

Autism Awareness Australia chief executive Nicole Rogerson questioned the underspend, saying the money was not being well managed.

"It's not really a saving if it means the money is not being spend on the kids who need it or it's being spent on cheap therapy which is not effective," she said.

Other potential participants in the scheme have taken legal action after being given incorrect information about their entitlements or denied funding entirely. 

A report from a joint parliamentary standing committee on the National Disability Insurance Scheme released in July identified significant problems in the trial sites including a reported "lack of clear, up-to-date and timely information from the Agency" and dissatisfaction from some participants and carers about the responsiveness of the NDIA.

The NDIA's annual report found that 94 per cent of participants at trial sites rated NDIA planning as good or very good.

It also noted that the time taken to assess eligibility for the program fell from 29.7 days in July-December 2013 to 13.3 days in January-June 2014.

The NDIA approved 7316 plans for people with disability, delivered by 1350 NDIS registered service providers.

At full rollout, it is anticipated that only 7 per cent of NDIS costs will be spent on administration, with 85 per cent of NDIA staff roles dealing directly with people with disability.

An NDIA spokesman said the surplus did not reflect an underspend and was related to the way in which people were being phased into the program. Participants have the right to appeal if they feel they have been denied "reasonable and necessary" supports.