National disability insurance scheme providers should be forced to fund a consumer rights ombudsman, advocates have argued, amid claims the government-appointed regulator is failing to address price-gouging and unscrupulous service providers.
The NDIS Quality and Safeguards Commission has faced claims complaints take too long to be processed and are frequently rejected unresolved, while independent disability advocacy organisations say they are overburdened with requests for assistance.
In what has been dubbed a “disability tax”, some NDIS participants have been charged significantly higher fees for goods and services than the general public, with reports of NDIS suppliers marking up goods by up to 1,000%. For example, one NDIS provider has advertised a shower chair for $1,150 when a similar product could be bought at a non-NDIS-registered supplier for $169.99.
Bill Shorten, the NDIS minister, has signalled the government intends to “stamp out unethical conduct” and it has established an independent review of the design of the scheme led by the former NDIS agency chair Prof Bruce Bonyhady.
In a submission to that review, Disability Advocacy Network Australia (Dana) and consumer rights expert Gerard Brody argue the NDIS commission should be split into two parts, with one arm a proactive compliance body, and the other an ombudsman that has participant complaints handling and consumer rights as its core function.
Ombudsmen are funded by the industries they investigate. Companies working in that space are required to become members, and are then charged a fee by the ombudsman when a complaint against them is investigated. Consumers can make complaints for free.
“Independent disability advocates are dealing with these kinds of NDIS consumer issues every day, working with people with disability to stop unfair contracts, rip offs and services not being delivered,” said El Gibbs, the director of policy and advocacy at Dana.
“This vital work urgently needs more funding to deliver real change, including a new NDIS consumer body, run by and for people with disability.”
Brody, who is the former chief executive of the Consumer Action Law Centre, said the recommendations would go a significant way to addressing the power imbalance between providers and participants.
“Having an independent consumer organisation that is able to focus on the NDIS would help make the market work better,” Brody said.
“There are disability advocacy organisations but they’re not well equipped for market regulation and design – that’s the domain of economists. But a consumer organisation specifically resourced for those capacities, to counter the large voices of providers, would be a really important reform.”
The submission, seen by Guardian Australia, also calls on the government to establish and resource an independent consumer organisation that would give a consumer voice to NDIS policy and the technical aspects of the market.
They point to anomalies in the system, such as that under NDIS policy since 2022, participants can be charged 100% of a service fee if they cancel with “short notice”, defined as less than a clear seven days.
Under Australian consumer law, cancellation terms and fees must be “fair and reasonable”. Advocates argue that, in most other circumstances, lumping the customer with a 100% cancellation fee with close to a week’s notice would be unacceptable.
It also used to be unacceptable in the NDIS: in 2019, “short notice” was defined as a cancellation after 3pm the day before the service or not showing up at the appointed time.
Shorten told Guardian Australia he wanted to see NDIS participants’ voices and rights improved and was looking forward to the review giving direction on that.
“For too long the scheme hasn’t had proper market stewardship or been a level playing field,” he said. “The aim for NDIS was to give agency to individuals rather than bureaucracies, but it’s a very immature system in terms of the way consumers have been treated.”
Denise Boyd, the chief executive at disability advocacy organisation Star Victoria, said there was a culture of NDIS participants and the general public receiving different prices for the same services, such as physiotherapy, and likened the situation to the systemic rorts of the government’s vocational education and training (VET) in the mid 2010s.
“There’s a different price system depending on where the money is coming from,” Boyd said. “That’s price-gouging and it’s ethically unacceptable ... It’s not there so that private companies can make heaps of money.”
It was not enough just to give NDIS participants more fine print, Boyd added. “We saw that with the energy market. You just bamboozle people with information and they can’t make any sense of it.”
Shorten said in August the Labor government would introduce new laws and consumer “tools” that meant “shonks and the people who are price-gouging and ripping off disabled people don’t have a future”.
“I want to stamp out unethical conduct that ranges from all-out crime to predatory pricing behaviour from opportunistic providers,” he said last week.
Meanwhile, waiting lists for advocacy services have continued to blow out, leaving people with disability with access to help. David McGinlay, the chief executive of Disability Rights Advocacy Service South Australia, said his organisation had to close its doors for two weeks recently to deal with the volume of requests for help.
“My advocates were burning out. We had 150 messages on the phones during those two weeks, and a number of them were saying, ‘This is our last resort, what can we do?’” McGinlay said. “We can’t turn them away. There’s nowhere else to go.”
In a statement, an NDIS Quality and Safeguards Commission spokesperson said the commission had recognised the need to improve its complaint handling and finalised the implementation of a new approach to complaints management in late February, which included new structures and teams to respond to complaints that identified “immediate risk” to participants. The commission is also recruiting new staff.
“The NDIS Commission takes complaints very seriously and does not reject complaints that relate to the quality of NDIS funded supports and services,” the spokesperson said. “Where appropriate the NDIS Commission will refer complaints to other agencies for action, including the National Disability Insurance Agency, other agencies relevant to the complaint”.
