It’s hard to know which dodgy claims are honest mistakes and which are deliberate fraud, a parliamentary inquiry has heard.
As the world around them reacted to federal health minister Mark Butler’s planned cuts to the National Disability Insurance Scheme, the NDIS board and members of parliament got down to the nuts and bolts of the beleaguered scheme.
The Joint Committee of Public Accounts and Audit’s inquiry into the administration of the NDIS heard today that it was not possible to calculate how many NDIS fraud cases were legitimate errors and how many were deliberate fraud.
John Dardo, deputy CEO of integrity, transformation and technological services said that those figures could not be reliably calculated.
“What we cannot statistically calculate yet … is where somebody’s identity has been stolen and used to create a false identity to claim, or where somebody has falsified their evidence to get into the scheme, so they’ve turned up with fake evidence to get into the scheme and then claimed against the scheme, or where there is significant organised collusion.
“Statistically, we can’t detect it in a way that we can attribute to the whole scheme.”
Mr Dardo said around 8% of claims were non-compliant, fraudulent or incorrect claims.
“That 8% – it would be impossible to tell you how much of that is deliberate, significant organised crime versus how much of that would be opportunistic or simple error.”
MP Carol Berry told the inquiry that in the quarter to 31 December 2024, only 7% of NDIS participants were agency managed, 27% were self-managed and 65% were plan managed.
Ms Berry said in the last quarter of 2024 there were 16,363 registered providers and 254,000 unregistered providers.
Auditor-General Dr Caralee McLiesh told the committee that a 2025 audit assessing the effectiveness of NDIS claims management found that the NDIS “lacked even basic prevention controls for fraud and non-compliance”.
“They were self-assessed as catastrophically weak, and even basic checks like verifying invoices and identity were absent,” she said.
“Measures to detect non-compliance were also very rarely used. When they were used, there was significant success, more than 50% success when manual prepayment reviews were employed.”
Related
Dr McLiesh said in early 2025, the estimate of fraudulent, non-compliant or incorrect claims was between 6% and 10% of all NDIS claims, or about $42 billion.
Mr Dardo told the inquiry that more than 2500 ABN providers had been identified and had payments put on hold “until they evidence every single claim”.
“For those 2500 providers, the vast majority have ceased claiming and will never claim again.
“A number of them, we’ve … executed warrants and prosecutions, and those 2500 providers historically between them have claimed over $5 billion.
“We can’t say that all of that was pure fraud, but what we can say is that, frankly, we should never have paid those low-quality in many cases, quite deliberately manipulative providers.
“That money really should have gone to high-quality, genuine providers.”
Mr Dardo said those 2500 were not concentrated in any one region or community, and involved small, medium and large providers.
“What we have observed is that that risk is spread all over the country, and that risk is spread across lots of different types of players in the NDIS.
“It includes providers from every geographic place you can imagine, including providers in regional hubs, in outback territories, suburban centres.
“You might see a cluster because a particular individual or a particular crime syndicate is centred in a particular place, or a particular accountant that is facilitating the authority centred in a particular place, but that is usually centred around an individual or a crime syndicate.
“It’s not a cultural thing. It’s not a religious thing.
“It is a particular person or a particular syndicate operating in a particular way. And … we have seen that in almost every city.”
Member for Monash Mary Aldred told the committee that constituents had told her “harrowing stories” following the loss of NDIS services.
Ms Aldred said one 13-year-old girl was severely restricted without weekly physiotherapy, and a boy was unable to communicate without speech therapy and was regularly in pain.
“These are really important services that people rely on,” she told the committee.
“It really is an issue that I deal with on behalf of my constituents every day of the week.”
Ms Aldred said a local speech pathologist reported that she was providing discounted fees to 75% of her clients.
“Such is the burnout and stress on her personally and her business, she’s looking … at shifting into another profession or industry,” she said.
“I suspect many people from regional areas … are similarly challenged.”
National Disability Insurance Agency board chair Kurt Fearnley told the inquiry the NDIS had been growing above 22% a year when he took his current role.
“It has been a focus of the board to be able to become more predictable to government,” the former Olympic athlete said.
“Noting that we have now more than halved the growth rate I can expect that we will continue down that pathway.”
Mr Dardo said the NDIS Fraud Fusion Taskforce involved 24 agencies plus every state police force and state crime commissions.
“It is probably the most powerful taskforce ever assembled in addressing non-compliance or fraud,” he said.
“That taskforce now shares intelligence that was not imaginable three or four years ago in our operational cases.
“It is now quite common for us to have federal police working alongside state police and tax office and Services Australia digital forensics.
“The level of support we’ve had from federal police, state police, Commonwealth director of public prosecutions, in that task force is beyond anything I ever would have imagined.”
