Explainer – National Disability Insurance Scheme and market failure

Explainer – National Disability Insurance Scheme and market failure

The National Disability Insurance Scheme (NDIS) is working well for many people with disability and has the potential to change the lives of thousands of people with disability, their families, friends and carers.

But we see many cases of people who need multiple services, with no one available to provide them or problems with coordination between different services. This means that the NDIS doesn’t work for people with more complex needs, putting them at risk of significant harm. When people cannot get the services they are funded to receive, this is called ‘market failure’. 

To ensure that no one is left behind, we are urging state and federal government to work together to ensure there is a service safety net for people with complex needs who face barriers navigating the NDIS system.

Why is the market failing?

We assist clients with disability who are funded to receive NDIS supports, but are stuck in prison, at risk of being separated from their loved ones or of getting in trouble with the police, because they cannot access the services covered by their NDIS plans.

There are a range of reasons why people with disability aren’t able to access the NDIS services they have been funded for, including a lack of:

  • services in rural, regional and remote areas;
  • culturally accessible services for Aboriginal and Torres Strait Islander peoples and people from culturally and linguistically diverse backgrounds; 
  • specialist services which provide the types or levels of support a person requires;
  • integration and coordination with mainstream support services.

Because they often suffer from many forms of disadvantage, the people who are affected by market failure are often those who would most benefit from using supports offered by the NDIS. 

How ‘market failure’ hurts​ people

Market failure has very real consequences for people with disability, their families and the communities around them. These include: 

  • long periods in custody 
  • inability to obtain bail or parole and exit jail
  • homelessness 
  • long-term detention in mental health inpatient units
  • deterioration in health, wellbeing and social engagement 
  • increased risk of offending and re-offending 
  • family breakdown, including through the child protection system
  • increased exposure to family violence.

Clients stuck in custody

Our client Francis
Our client Francis

Our 20-year-old client Francis spent 180 days in jail after his NDIS funded supports failed. Justice Lasry eventually granted him bail, saying ‘He’s in 23-hour lockdown at Melbourne Assessment Prison. I can’t imagine a worse place for him. The longer he is there the more he will be damaged. Who knows what damage has been done already?’

Because there is no safety net that guarantees services will be provided, our clients can be taken into custody for minor offending and then kept in prison, unable to get the supports they would need to successfully apply for bail or parole. In most cases, they are kept in jail because there is nowhere else for them to go.

As the examples of FrancisAlex and Rebecca show, these clients can spend long periods in solitary confinement and be subject to other restriction because prison staff do not have the resources or training to manage  behaviours related to their disability. 

This puts our clients at risk of:

  • serious harm to their mental health (clients with significant cognitive impairments may be targeted within prison environments and may struggle to understand their treatment in detention, resulting in distress and fear);
  • physical harm (such as self-inflicted harm without access to essential supports to manage their behaviours or harm from others), and
  • social exclusion and marginalisation (their social supports in the community are disrupted or removed completely, making their transition back to community care more difficult).

The need for a safety net

Currently, it is unclear which government agency is responsible for ensuring that people actually receive NDIS services funded under their plan. When people or their support workers try to resolve this issue, they’re often bounced between the NDIA and state-based services, without a clear pathway forward.

We are urging State and Federal Governments to work together to set up a sustainable and enforceable service safety net. It must be clear who is responsible for coordinating, funding and providing services to people with disability in cases of market failure to make sure people do not slip through the cracks facing terrible consequences.

Ensuring people with disability are supported to effectively engage with  the NDIS also requires funding for support coordinators and disability advocates to support people who would otherwise struggle to navigate the NDIS system on their own.

We believe in the NDIS. That's why we're working with governments, disability groups and our clients to try to improve how it works for people with disability, their carers and loved ones.

More information 

We have made several policy submissions with recommendations about how to create a sustainable safety net:

Read our submissions to the parliamentary Joint Standing Committee on the National Disability Scheme:

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