This chart shows the average cost per decile in funding for 2020-2021. What is fascinating about this chart is that it is controlled for SIL status, age, disability type and presentation intensity. Essentially, this chart isolates the variation that is produced by individual circumstances, interpretations of “reasonable and necessary”, and intra-planner variation. In a nutshell, this chart shows that plans vary wildly even when controlling for intensity, disability type, age and SIL Status.

Many in the sector have inculcated this variance as they work across numerous plan interactions. Our view is that this finding is a direct incentive to those in the sector to pursue plan reviews and appeals. Indeed, as the number of appeals increases, a particular pattern is beginning to emerge that creates unusual incentives.

For those watching the administrative appeals tribunals closely, you would have noticed some interesting newer cases that unravel some of the NDIS rationing logic. For example, LWVR and National Disability Insurance Agency [2021] AATA 4822 was a case where the participant directly challenged their funding ratio in SIL/SDA. The NDIS maintained that if an individual can be safely serviced in a 1:3 setting, this should form the basis of a reasonable and necessary funding allocation. However, in this case, a decision was made that allowed the individual to live on their own, which was at least in part based on their aspirations and goals (something that appeared to be missing in the original allocation decision).

Empathia Group’s reading of these matters suggests that the AAT consideration of individual goals, especially when they conflict with financial constraints, will inject more variability into the scheme funding. However, the same financial constraints will remain in the system that require the scheme executives to make difficult allocation decisions as they becoming increasingly easily challenged.

Empathia Group’s reading of the most recent quarterly report and our experience with 100’s of scheme users suggest broad satisfaction with the NDIA allocation mechanisms. However, the actuarial review has demonstrated a significant unknown variance inherent in the distribution mechanism. This essentially means that strong representation in planning meetings is as essential as ever. The capability of guardians, support coordinators and in some circumstances, providers to make convincing and persuasive cases is still likely a major determinant in plan allocation.

Empathia Group doesn’t think the NDIA allocation mechanism is “gameable”, and it is likely that serious consideration is driving the allocation decision in these plans. However, it is now demonstrable that something beyond individual need is driving significant variation, and organisations should be cognisant of this when approaching the planning decision.