How Much Does the NDIS Cost and Where Does This Money Come From?

Published 9th July 2018

In wake of the ongoing debate about how the National Disability Insurance Scheme will be funded, Associate Professor Helen Dickinson explains how much the NDIS costs and where the money will come from, in this piece which first appeared in The Conversation.

The Productivity Commission now estimates that around 475,000 people with disability will receive individualised support at a cost of around A$22 billion per year. Last year’s Productivity Commission review of costs found the NDIS was broadly coming in on budget. The NDIS budget is estimated to gradually increase over time to 1.3 per cent of GDP by 2044-45 as participants age. Estimates also suggest the scheme will produce benefits adding around 1 per cent to the GDP.

The way the NDIS is funded is complex, with revenue coming from a number of sources. The NDIS is funded via a pooled approach from Commonwealth and state and territory governments. The Commonwealth provides just over half of the funding for the NDIS and the rest comes from state and territories. At the creation of the scheme, all existing money spent by various governments was directed into the NDIS to cover costs. Any additional funding the NDIS needs has to come from general budget revenue or borrowings. The treasurer announced tax receipts were running A$4.8 billon higher than was estimated in December, meaning the levy was no longer needed. Read the Full ProBono Australia article here.

Federal Government ups pressure on states to uphold funding arrangements
Social Services Minister Christian Porter is warning the states they cannot "wriggle out" of their National Disability Insurance Scheme (NDIS) funding agreements, ahead of the release of a major report on the scheme's future costs. The states and territories have agreed to increase their funding by 3.5 per cent each year after 2019/20, but the Productivity Commission's final report on the cost and design of the NDIS, due in October, could recommend an increase. The states and territories have agreed to increase their funding by 3.5 per cent each year after 2019/20, but the Productivity Commission's final report on the cost and design of the NDIS, due in October, could recommend an increase. here

In NSW the State Government Transfer to the NDIS is as follows:-
National Disability Insurance Scheme - payments to National Disability Insurance Agency in 2016 $91,450,000 and in 2017 $757,089,000 (Source FACS NSW 2016-17 Annual Report here.)