National Disability Insurance Scheme (NDIS) Fraud in Australia

The National Disability Insurance Scheme (NDIS) in Australia has been a beacon of hope for individuals with disabilities, providing them with support and services to enhance their quality of life and independence. However, amid the scheme’s noble intentions, a darker side has emerged—the rise of fraud. 

What is NDIS Fraud?

NDIS fraud occurs when individuals or organisations deliberately deceive the scheme for financial gain, exploiting loopholes or misrepresenting information to access funds illegally. Such fraudulent activities undermine the integrity of the NDIS and divert resources away from those who genuinely need support.

One of the primary forms of NDIS fraud involves false claims for services or support that have not been provided. Individuals or service providers may exaggerate the level of care a participant needs, submit invoices for services that were never rendered, or inflate the costs. 

This type of fraud defrauds the NDIS of funds and deprives participants of the assistance they are entitled to receive.

Another common form of fraud is identity theft, where scammers impersonate NDIS participants to access their funds or personal information. By gaining unauthorised access to a participant’s account, fraudsters can syphon off funds intended for their care, leaving them vulnerable and without the necessary support.

Current NDIS Issues in New South Wales

There is a prevalent issue with the NDIS in today’s healthcare setting that influences people all over Australia. 

A recent study noted that ‘90% of plan managers out of 1000 have significant indications of fraud.’ Laurie Leigh, the CEO of the National Disability Services, confirms this figure, noting that ‘the bar needs to be lifted.’

Leigh states that there are two sides to the issue — criminals at one end who can easily get into the system and take advantage of those with disabilities, and companies/genuine providers who are trying to help people but making very little or no money in the process.

Furthermore, almost 5% of the NDIS scheme is being misspent in the wrong areas—this means that at least $2 billion of the funding is not allocated where it should be. Although most people in the NDIS could have benefited from the scheme, 5% is an extremely significant margin. 

Lastly, because of the lack of financial ability to succeed in the market, many genuine providers and small healthcare companies that have been around for four or five decades could leave the system. Not only do they barely profit in the business, but consistent staff turnover makes it hard to continue spending on training, onboarding, and hiring. 

40% of healthcare companies’ staff are casual workers—25% of those workers change every single year. This means more manpower, effort, and resources to continually train new people to enter the workforce. 

Federal fraud in Australia

The Criminal Code Act 1995 (Cth) applies across the nation and makes it a criminal offence to defraud Commonwealth agencies, such as through the NDIS. 

Part 7.3 of the Act is titled ‘Fraudulent conduct’ and sets out the penalties for instances where the prosecution is able to prove beyond a reasonable doubt that a financial benefit has been obtained from a Commonwealth agency by way of fraud, in other words, through dishonesty and/or by way of a deception. 

Obtaining Property or a Financial Advantage by Deception

A person commits this offence if the person dishonestly obtains property belonging to another person or the property belonging to the Commonwealth. 

Concerning the NDIS, a person who causes an amount to be transferred from an account held by a secondary person into their own account is considered fraud. Furthermore, a person who obtains a financial advantage by deception from a secondary person or the Commonwealth can face imprisonment for up to 10 years. 

General Dishonesty

The second criminal act involving the NDIS is general dishonesty. If a person does anything with the intention of dishonestly taking from another person or the Commonwealth, they can face imprisonment for up to 10 years. 

Obtaining a Financial Advantage

Thirdly, a person is breaking the Criminal Code Act 1995 if they engage in acts to obtain a financial advantage from another person, obtain a monetary gain when they know they are not eligible, or obtain a financial advantage from a Commonwealth entity. In this instance, the accused faces prison for up to 12 months. 

This can occur in the NDIS scheme when people obtain disability rights or payments that are not rightfully theirs. 

Conspiracy to Defraud

If a person wants to obtain the healthcare benefits of a third individual or the financial benefits of the NDIS system, they may collaborate with a second party to defraud the third person. In this case, conspiracy to defraud can lead to a sentencing of up to 10 years in prison. 

False or Misleading Statements in Applications

Someone might mislead an application reviewer or provide false information to earn NDIS benefits or financial gain. If an individual makes a statement that is false, misleading or omits critical information, and the statement is connected to an application for a claim benefit (NDIS), they could face imprisonment for upwards of 12 months. 

False or Misleading Documents

Similarly to providing false or misleading information orally or on an application, an individual who produces a document to another person that is false, misleading, or not in compliance with the Commonwealth could face imprisonment for up to 12 months. 

Forgery

The final instance in which fraud directly relates to obtaining NDIS benefits is through forgery. ‘Forgery’ occurs when a person makes a false document with intent another will use it to induce a third party’s capacity as a public official deeming it genuine AND to obtain a gain (ex: NDIS benefits). The punishment for forgery is a prison sentence of up to 10 years. 

Using a Forged Document

One of the most common charges related to forgery includes using a forged document. A person does so when they use a false document intending to ensure another person’s capacity as a public official believes it to be true AND obtain a gain or influence the system. 

Possession of a Forged Document

Possession of a forged document is similar to using one, including the intent to use it for gain or influence over a public official. 

Falsification of Documents 

Lastly, document falsification occurs when a person dishonestly damages or alters a document held by a Commonwealth entity or retained for the Commonwealth and uses it with the intention of obtaining a gain. The punishment for falsifying documents to obtain NDIS benefits is seven years in prison. 

Combating NDIS Fraud

The Australian government and NDIS regulatory bodies have implemented various measures to combat NDIS fraud. These include enhanced monitoring and compliance mechanisms, such as audits and investigations, to detect and deter fraudulent activities. Additionally, introducing stringent penalties for fraud offenders aims to act as a deterrent and uphold the scheme’s integrity.

As the NDIS continues to evolve and expand, the need to address fraud and safeguard the program’s integrity becomes increasingly crucial. Collaboration between government agencies, service providers, and the community is essential to combat fraud effectively and ensure that the NDIS fulfils its promise of supporting individuals with disabilities to lead fulfilling lives.

In conclusion, NDIS fraud is a serious issue that poses a threat to the sustainability and effectiveness of the scheme. By raising awareness, implementing robust oversight measures, and holding perpetrators accountable, we can work towards a more secure and trustworthy NDIS that genuinely serves the needs of individuals with disabilities.