A new parliamentary report has outlined 12 recommendations to combat fraud within the National Disability Insurance Scheme (NDIS), targeting criminals, dishonest providers, and other 'bad actors' who exploit the system. The report, released on July 6, 2026, calls for enhanced information-sharing between government agencies, stricter action against kickbacks and conflicts of interest, a worker registration system, and improved whistleblower protections.
Scale of NDIS Fraud
The National Disability Insurance Agency (NDIA) estimates that approximately A$3.7 billion, or 8.3% of its payments in the previous financial year, was affected by 'integrity leakage.' However, this figure includes mistakes, poor record-keeping, incorrect claims, and other rule breaches, not just intentional fraud.
Forms of Fraud
Fraud can take many forms: providers charging for undelivered services, inflating invoices, or charging the NDIS more than other customers. Fake businesses submit fraudulent claims, while criminals impersonate participants, providers, or support coordinators to gain control of NDIS funds. More disturbing cases involve participants being intimidated or threatened to allow a provider to use their plan. Criminal groups may collude with providers to prepare false documents, inflate support needs, or direct participants to particular services, depleting funds needed for essential support and leaving participants at risk of violence or neglect.
Report Recommendations
The report highlights gaps in the scheme's design and rollout. Government agencies have not always shared information effectively, allowing individuals or businesses excluded from one part of the care sector to reappear elsewhere under a different role or business name. The NDIS market also permits one organisation to advise a participant, manage their funding, and sell them services, creating obvious conflicts of interest.
Key recommendations include better information-sharing to prevent banned providers from moving into the NDIS, a system for managing conflicts of interest, stronger penalties and reporting requirements for kickbacks, and enhanced whistleblower protections. The report also supports a stronger worker registration system.
Worker Registration
Currently, around 92% of NDIS providers are unregistered, making it difficult for the regulator to monitor who is operating, their history of misconduct, or if they have reopened under a different name. While many unregistered providers are trusted businesses, the lack of scrutiny hampers identification of suspicious behaviour before money is lost or participants harmed.
A previous taskforce recommended a tiered approach, with stronger checks for higher-risk services and simpler requirements for lower-risk support. The report supports stronger registration and oversight of the NDIS workforce but did not specifically recommend a tiered system. However, such an approach would allow the regulator to focus on areas with the greatest fraud and harm risks. Not every provider should face the same costly process; a small provider offering gardening help should not face the same requirements as a company controlling a participant's housing and personal care. Yet, if registration is too costly, smaller providers may leave, reducing participant choice and access to essential services.
Preventive Measures
Stronger investigation powers and tougher penalties often come into play after suspicious payments or harm has occurred. A better system would stop claims before money leaves the scheme, help participants before they become trapped, and provide protection for those who report wrongdoing. Participants need safe, accessible, and independent reporting pathways. A standard fraud hotline may not suffice for someone reliant on a suspected provider for personal care, transport, or housing. Some participants fear losing essential services if they complain, being blamed, or having their plan scrutinised.
Independent disability advocacy is essential. Advocates can help participants understand what happened, gather information, make reports, and arrange alternative support. However, advocacy organisations need reliable, long-term funding.
Pre-Payment Checks
The NDIS processes an enormous number of transactions, so the payment system should check basic details before releasing money. Questions could include: does the provider's business number match its bank account? is the provider permitted to deliver that service? does the invoice match the participant's plan? is the same service claimed repeatedly by several related businesses? has the provider recently changed ownership, address, or bank details? These checks could identify unusual claims before payment, rather than relying mainly on investigations and debt recovery.
Next Steps
The government will now consider the report's 12 recommendations. This is part of a larger debate about the NDIS's future. A separate Senate inquiry is examining proposed changes to eligibility, participant plans, and funded supports, expected to reduce projected NDIS spending by A$37.8 billion over four years. As the government considers wider changes, it should not allow fraud concerns to justify reducing participant supports. Fraud, weak regulation, poor service quality, and rising costs are related but distinct problems requiring different responses.
