The Queensland and Commonwealth Governments have agreed that North Queensland will have an early launch (April 2016) of the National Disability Insurance Scheme (NDIS), which was scheduled to commence from 1 July 2016.

Overview

The purpose of the NDIS is to deliver a national system of disability support focused on the individual needs and choices of people with disability. The scheme is the Government’s response to the Disability Care and Support inquiry report by the Productivity Commission which concluded that the current disability support system in Australia is “underfunded, unfair, fragmented and inefficient, and gives people with a disability little choice and no certainty of access to appropriate supports”.

The NDIS is governed by the National Disability Insurance Scheme Act 2013 (Cth) (“the Act”). The scheme will enable people to have choice and control over their disability support, including who provides this support and how it is managed, through an individualised planning process tailored to the goals and needs of each participant.

The NDIS is premised on an “insurance” approach and provides for the funding of life long needs of a person with disability, the costs of which are supported by actuarial assessment and spread across the community.

Under the Act, a person can access the NDIS if they:

  • Are under the age of 65 when the NDIS is implemented;
  • Are an Australian resident or permanent visa holder;
  • Have a disability that is permanent and impairs their capacity for social or economic participation; and
  • Are likely to require support for their lifetime.

Rollout

Persons under 18 years in Townsville and Charters Towers and all eligible people with disability on Palm Island will be the first Queenslanders to have access to the NDIS. Around 1,600 people are expected to be eligible for the NDIS in the early launch group, with 600 of these expected to be receiving their funded packages from April 2016.

The process will keep rolling through and will be fully implemented in Queensland by 2019, with approximately 97,000 Queenslanders eligible to receive support through the NDIS. The NDIS has already been trialed and implemented in other states across Australia.

Impact on insurance claims

Importantly, the NDIS does not interfere with a participant’s right to damages. Whilst the Act aims to prevent double recovery, it does not replace existing statutory compensation schemes or common law entitlements. In fact, the legislation encourages participants to pursue claims, otherwise the NDIS Agency (“the Agency”) may compel them to take reasonable, specified action to obtain the compensation.

Where participants receive benefits under the scheme and subsequently secure compensation, insurers will be required to direct re-payment to the Agency, similar to Medicare and Centrelink refunds.

Given that participants will retain their rights to recovery, it is not expected that the NDIS will have any significant impact on insurance claims. Further, the NDIS does not provide compensation for pain and suffering, damages or economic loss, which are usually included in a claim for compensation. The NDIS will simply operate as a safety net for disabled persons without a right to compensation.

It remains to be seen whether the increased funding creates pressure on the available care providers and therefore an increase in the commercial cost of care (which could impact awards of damages for care in compensable insurance claims) and further, in what circumstances the Agency will compel a participant to pursue an action and who would be responsible for the costs of such an action if it was unsuccessful.