There is no doubt that 22 billion dollars is a lot of money. There is no doubt that this kind of money being injected into the Australian economy in a specific sector is going to grow a marketplace.
The NDIS is Australia’s biggest reform since Medicare. In its purest form it provides the opportunity for Australians with disabilities to live their best life, with funding available for the right supports delivered by the people who have been chosen by the person who wants them.
In many cases it doesn’t quite look like this but there are many of us out here who continue to fight for the desired model.
In the eyes of many, businesses who are providing supports within the NDIS are money hungry ratbags who promise much and deliver little. In my experience as an NDIS specialist business advisor this represents a small minority – but it can be very difficult for potential customers to tell the difference. The bottom line for many businesses trying to have a go in this marketplace is that the going is tough, the margins are small and the workforce is non -existent. The rules change constantly and the administration burden is significant. This makes excellence all the more challenging to achieve.
In July 2018 a new challenge to the sector presented itself with the introduction of the much needed NDIS Commission to manage Quality and Safeguarding. With them came the NDIS Practice Standards – outcome regulation that requires auditing before a business can successfully register. Audit pathways are different in terms of complexity and expense and are dependent on the level of risk of the supports that the business wants to offer. The Commission has decided which supports are high and low risk. They have accepted feedback from the sector where the audit pathways did not seem to make sense and were acting as significant barriers to businesses to register and have made changes to try and correct that.
But still – if an NDIS participant chooses to Plan or Self Manage their NDIS funds, in most cases they do not have to access an NDIS registered business for their supports. In many parts of NSW, businesses are conducting viability tests to see whether with a small number of Agency / portal managing customers it is worth spending the time preparing and paying for a potentially expensive audit.
The latest NDIS Quarterly reports show a drop in NSW providers who were active in the past quarter with just 4012 active businesses making claims. This is a long way from the just over ‘approved’ 9000 that were listed as NDIS providers prior to the new registration system that came along with the NDIS Commission.
The NDIS has stimulated the development of a growing private marketplace. This is a good thing. For choice and control to be truly achieved people with disabilities ideally are able to have a range of offers out there from which they can determine which are the best for them. It is worth remembering that this means that there are people out there who are taking significant risk to set these businesses up – financial and personal. Running a business is hard work even when you love what you do.
While the larger traditional not – for – profits will ensure that they are doing their best to meet the outcomes in the NDIS Practice Standards and will undergo their audit as a matter of essential business, it remains true that the vast majority of businesses offering supports within the NDIS are small, privately owned businesses. In September 2019 40% of ‘approved’ providers were sole traders with no breakdown of small businesses set up as companies within the other 60% where they have always been grouped with the large organisations. Having supported hundreds of small companies over the past year the proportion of these within that 60% segment is likely to be high.
As such the decision to register a business with the NDIS becomes a business decision. Cost must not be the only factor that is considered and it is essential that the business understands exactly what their registration requirements are so that they can make an informed decision. We are doing our bit to support small businesses in understanding their requirements and successfully navigate the audit. We are running a workshop in Melbourne on March 18th. Registrants for this workshop can access an online follow up session at no extra cost. Register here.
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