Registered NDIS Providers Struggling Against Unregulated Competition, Inquiry Hears

Providers say the current funding model for the National Disability Insurance Scheme (NDIS) is broken, and urge that pricing be set independently.

The National Disability Insurance Scheme NDIS logo is seen at the head office in Canberra, Australia, on June 22, 2022. AAP Image/Mick Tsikas

The current National Disability Insurance Scheme (NDIS) pricing system is putting pressure on organisations and contributing to unsafe care for participants, according to a peak body representing over 125,000 providers.

Alliance 20 told a federal parliamentary inquiry that the National Disability Insurance Agency (NDIA) needed to control its spiralling costs and to ensure the long-term financial sustainability of the NDIS.

The Joint Committee of Public Accounts and Audit is currently examining the administration of the multi-billion-dollar scheme, which cost taxpayers about $49 billion at the end of the last financial year 2024-25.

In a submission to the committee, the organisation says current NDIS payment rates did not adequately cover the cost of service delivery, compliance, and award wages.

“The current pricing approach does not adequately recognise the cost of service provision, compliance, and alignment with industrial instruments and does not provide any incentive or reward for quality and safety,” the submission said (pdf).

Alliance20 also argued the NDIA’s dual role in both setting prices and managing scheme costs created a “direct conflict,” and said this risked undermining the sustainability of the provider market.

It called for the establishment of an independent pricing authority separate from the NDIA.

The group said there were more than 260,000 providers operating in the NDIS, but only about 16,000 were registered with the regulator.

It claimed many unregistered providers and sole traders were charging similar rates to registered providers, without the same compliance costs or oversight.

“Unregistered providers and sole traders are mostly claiming the same price as registered providers,” the submission said.

The organisation also raised concerns about oversight, saying the NDIA and the NDIS Quality and Safeguards Commission had limited visibility over much of the provider market.

Alliance20 said this had coincided with a rise in sole traders, many of whom were paid at rates comparable to registered providers despite lower overheads.

For example, a sole trader working 40 hours a week would be claiming in excess of $150,000 per year as a disability support worker, compared to someone doing the same job and paid under the national industrial award, who would be paid about $75,000 per year plus entitlements.

The submission also argued the scheme’s pricing model was disadvantaging clients with complex needs, as funding was increasingly based on standardised pricing structures as a means of saving money.

It said the proportion of clients funded at high intensity had fallen from 60 percent in 2018 to 20 percent in 2025, despite what it said were no corresponding reductions in participant needs.

NDIS pricing has come under scrutiny with One Nation leader Pauline Hanson expressing criticism of current rates.

“Wages under NDIS can be claimed up to $195 per hour, much higher than typical wages for similar services, contributing to inflated costs and sucking away providers from other important industries like aged care and veterans services,” she said in March.