NDIS – Defining what’s Cheap and Obligatory – Half 1 – Insurance coverage

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The National Disability Insurance Scheme came into being in 2013
with the passing of the National Disability Insurance Scheme
Act 2013 (“the Act”). The Act created a scheme that
would allow for the implementation and funding of care plans for
individuals with a disability in Australia. Throughout its
development and implementation the scheme has been lauded as one of
the greater modern day successes in supporting those with a
disability in Australia and on the other hand has been criticised
in its application. This is due to the delays in delivering
supports, and in some cases the delivery of inadequate supports
that do not take into account individual circumstances of
participants which is the very object of the scheme.

In 2015 the Australian Bureau of Statistics Survey of
Disability, Ageing and Carers found that around 4.3 million
Australians had a disability. Further, of that number, about 1.4
million people had a severe or profound core activity limitation
which meant that they require assistance with day-to-day activities
related to self-care, mobility and communication. Given these
figures are likely to have increased with the growth of our
population, what is abundantly clear is that a National Disability
Insurance Scheme is a necessary scheme in order to support those
living with a disability in Australia.

Eligibility Criteria for Participation in the

In order to gain access to the scheme a person must meet the
access criteria as defined in Chapter 3 Part 1 of the Act which
includes that they must:

  1. Be aged under 65;1
  2. Reside in Australia and be either an Australian citizen or
    holder of an appropriate visa including permanent
  3. Meet disability requirements that are attributable to
    one or more intellectual, cognitive, neurological, sensory
    or physical impairment
    or to one or more impairments
    attributable to a psychiatric condition. In
    addition they must be permanent or likely to be
    permanent and the impairment must result in a substantially
    reduced functional capacity
    to undertake activities
    including communication, social interaction, learning, mobility,
    self-care, self-management and the disability must otherwise
    affect the persons capacity for social or economic
    such that they will require support under
    the scheme for the persons lifetime.3
  4. Meet the early intervention requirements, being that the CEO
    must be satisfied that the provision of early intervention supports
    for the person is likely to benefit them by reducing their future
    needs in relation to their disability. In considering whether or
    not the person is likely to benefit from the supports, the CEO must
    be satisfied that it would mitigate or alleviate the impact of the
    persons impairment upon their capacity to undertake communication,
    social interaction, learning, mobility, self-care or
    self-management or prevent a deterioration of such function or
    capacity or indeed improve such function or capacity and otherwise
    strengthen the sustainability of informal supports available to the
    person. The Act gives a specific example that a person with a
    degenerative condition could meet the early intervention
    requirements and therefore become a participant even in
    circumstances where their capacity may be greater than what it
    might otherwise be at some point in the future in the event
    degeneration occurs.4

The CEO of the National Disability Insurance Agency
(“NDIA”) does have the capacity to revoke participation
status if any of the eligibility criteria including the residence,
disability or early intervention requirements are not met at some
point after participation occurs.

It is important to note that a blanket approach cannot be taken
by the NDIA to deny access to support. For example in the decision
of Evans and NDIA (“Evans”)
,5 the NDIA relied on a guidance policy which stated
that hearing loss of more than 65 decibels was a threshold for
access to the scheme. On appeal, the Administrative Appeals
Tribunal (“the Tribunal”) found that the relevant
question is always whether a specific person has an impairment that
results in substantially reduced functional capacity to do one of
the things defined in Section 24 of the Act, set out at point 3 of
the eligibility criteria above.6

The case of Evans is of particular interest to the NDIS
community because it is a clear example where the Tribunal will
push back on the NDIA’s approach to rely upon its policies and
operational guidance as an absolute bar to someone accessing the
NDIS, or receiving a certain level of support. However, it is
important to note that operational guidance and policy is
important, and the Tribunal will usually have regard to it, but not
if it is inconsistent with the legislation. Therefore, the
legislation will always take precedence over any policies or
operational guidance that the NDIA might seek to apply in a
particular case.

In another recent decision in FSQQ and National Disability
Insurance Agency ,7the Tribunal confirmed that a
“beneficial approach” should be taken to interpreting the
Act. The Tribunal has emphasised that if the NDIA thinks that the
information provided to it by an Applicant about their disability
is insufficient, then the NDIA is under an obligation to seek
further information from them. In this case it was not acceptable
to simply deny the claim because insufficient information was
provided. What this seems to suggest is that the NDIA does have an
inquisitorial function in that it must make its own enquiries in
circumstances where it formulates the view that insufficient
information is given about a submitted disability.

In review of the case law it appears there is a consistent line
of authority where the NDIA raises disputes about the permanent
nature of psychiatric disabilities suffered by potential
participants. For example, in the decision of Furminger and the
National Disability Insurance Agency,8 the Tribunal
affirmed a decision of the NDIA accept the provision of support for
a spinal condition but to deny access to the applicant who was
diagnosed with clinical depression and PTSD on the basis that the
psychiatric conditions were not accepted as being permanent or
likely to be permanent.

The practical effect of this is that no supports would be
provided for the psychiatric diagnosis. The reasoning provided by
the Tribunal indicated that there was no evidence to satisfy the
Tribunal that the impairments resulted in satisfaction of any of
the disability requirements in Section 24 of the Act, namely that
the impairment or impairments result in substantially reduced
functional capacity to undertake or psychosocial functioning in
undertaking activities involving communication, social interaction,
learning, mobility, self-care and self-management and/or affecting
the persons ability for social and economic participation and the
likelihood that they would require support for the remainder of
their life. The issue in this case largely appeared to be that the
evidence seemed to suggest that with treatment that this
participant could have likely recovered and/or improved so as not
to render the condition permanent.9

Conversely, in a more recent decision of KDYG and National
Disability Insurance Agency,10 a reviewable
decision denying access to an individual with complex PTSD with
dissociative identity disorder, severe anxiety, severe depression,
chronic suicidal ideation and disorientation was overturned and the
participant was accepted in the scheme. In that case careful
consideration was again given to Section 24 of the Act and the
evidence before the Tribunal such that the Tribunal was persuaded
on the evidence that the Applicant met the access criteria contrary
to the decision made by the NDIA. The Tribunal went further at
paragraph [91] to say that:

“Having found that the Applicant’s impairment or
impairments are permanent and that they result in substantially
reduced functioning to undertake self care, the Tribunal finds that
she is likely to require the support of the NDIS for her lifetime
pursuant to Section 24(I) (e) of the

Having regard to these decisions it is therefore extremely
important to ensure that any evidence diagnosing a psychiatric
condition deals not only with the required supports and diagnosis,
but most importantly the permanence of any particular condition. In
a practical sense this will be very difficult to establish in a
case involving a recent event or diagnosis.

Defining what is Reasonable and Necessary

In order to receive supports under the Act they must be
determined to be reasonable and necessary. The concept of what is
reasonable and necessary is by no means a new concept and has been
in place and applied in various State based compensation schemes
for a number or decades. The relevant section of the Act appears in
Section 34 which says that the CEO of the NDIA must be satisfied of
the following:

(a) The support will assist the participant to pursue the
goals, objectives and aspirations included in the participants
statement of goals and aspirations;

(b) The support will assist the participant to undertake
activities, so as to facilitate the participants social and
economic participation;

(c) The support represents value for money in that the costs
of the support are reasonable, relative to both for benefits
achieved and the costs of alternative support;

(d) The support will be, or is likely to be, effective and
beneficial for the participant, having regard to current good

(e) The funding or provision of the support takes account of
what is reasonable to expect families, carers, informal networks
and the community to provide;

(f) The support is most appropriately funded or provided
through the National Disability Insurance Scheme, and is not more
appropriately funded or provided through other general systems of
service delivery or support services offered by a person, agency or
body, or systems of service delivery or support services

(i) as part of a universal service obligation; or

(ii) in accordance with reasonable adjustments required
under a law dealing with discrimination on the basis of

The Tribunal has been asked to consider what is reasonable and
necessary in the context of those living with a disability. In a
recent case of XXYC by his mother and National Disability
Insurance Agency13 the Tribunal confirmed that:


The NDIS is not simply subject to legislative requirements
as is a private health insurer but in the creation of statute.
Although styled as an insurance scheme, the NDIS has some features
that take it outside the boundaries of insurance. The benefit that
is payable, for example, is not defined in absolute terms. It is,
instead, determined by reference to the support that the CEO is
satisfied is the reasonable and necessary support in each
individual case or that is a general support that will be funded by
the agency. That means that each benefit is tailored for
each individual participant. It is a bespoke


When regard is had to all of the matters, to which the CEO
must have regard under s34, in approving the supports that will be
provided to a participant as well as those matters, which s33
requires the CEO to have regard in deciding whether to approve a
participants plan in the context of the objects of the NDIS Act set
out in s3, the principles that must guide actions of people doing
acts or things on behalf of others and the need to maintain
stability, it becomes clear that the plan, including its statement
of participant supports that is approved, is unlikely to meet every
participants every wish. The NDIS Act itself recognises that it is
unlikely to do so for s34 itself requires consideration to
be given to whether a support is most appropriately funded or
provided through NDIS or more appropriately funded or provided
through other services offered as part of a universal service
obligation or in accordance with reasonable adjustments required
under a law dealing with discrimination.
The CEO must also
take account of what is reasonable to expect families,
carers, informal networks and the community to
” 14

In this case the Tribunal was asked to consider whether early
childhood intervention supports that were identified as capacity
building supports and other supports to assist with the activities
of daily living were reasonable and necessary for the Applicant who
is living with autism. The Tribunal ultimately decided to vary the
initial funding of approximately $40,000 in favour of a plan that
delivered funding in the amount of approximately $113,000 in order
to assist with the early childhood supports that were sought by the

As with the cases involving eligibility criteria, the Tribunal
is concerned with considering cases on a case by case basis. For
example, in McKenzie and National Disability Insurance
Agency,15 a case advanced before the Tribunal in
2019, the Applicant, suffering with multiple sclerosis, sought to
have ducted air conditioning installed in his home.

Initially the NDIA refused this aid on the basis they did not
consider it reasonable and necessary. Importantly the Applicant
already had an old air conditioning system that stopped working and
was too expensive to repair and therefore replacement was
recommended. The Tribunal took into account expert evidence that
accepted that people with multiple sclerosis experienced temporary
worsening of symptoms when their core body temperature rises.
Interestingly, in finding that the replacement of an air
conditioning system was reasonable and necessary the ongoing
repairs and maintenance would not be and therefore the NDIS would
generally not fund the ongoing repairs and maintenance of the air
conditioning unit even though it is reasonable and necessary to
replace an existing one that had stopped working.16

In a more general sense, in McGarrigle v National Disability
Insurance Agency17 the Federal
Court, in considering reasonable and necessary supports within the
context of Section 34 of the Act said that:

“Whether a support is “reasonable” requires a
different assessment to whether a support is “necessary”.
Again, it is not necessary in the context of this proceeding to be
definitive about the nature and extent of the meaning of the
phrase, or its components. It is enough to observe that using the
concept of necessity would appear to tie one aspect of the
CEO’s assessment to an evaluation of the kinds of factors set
out in S34(1)(a) and (b) and (d).”

In other words, a reasonable construction of the Act needs to be
undertaken by any decision maker in determining what is reasonable
and necessary. For example, in considering whether something is
reasonable, a decision maker would have to take into account that
the support represents a value for money in that the costs of the
support are reasonable, relative to both the benefits achieved and
the cost of alternative support.18

Furthermore, in considering what is reasonable and necessary it
is important to consider whether or not a particular expense arises
as a result of a person’s disability. In a recent decision
before the Tribunal a review was sought following the refusal by
the NDIA to fund an Applicant’s legal practising certificate as
a reasonable and necessary support within the meaning of the Act.
The argument advanced was that the funding of a practicing
certificate allowed the Applicant the ability to engage in
employment. The Tribunal commented as follows:

“[43] I accept the proposition put by Mr Johnston that
it is an objective of the scheme to have people with a disability
in employment. However, it does not follow that the scheme is
intended to fund all costs associated with a participant’s
employment. If Mr Johnston’s argument is correct, the scheme
would be required to fund many of the fees associated with
professional bodies and trade associations when those wishing to
engage in work are participants in the scheme. Such supports would
neither be reasonable nor necessary if the fees were not related to
the person’s disabilities.

[44] I acknowledge that Mr Johnston’s disabilities are
of such significance that there is nothing in his life on which
they do not impact. However, it does not follow that all expenses
he may incur in pursuing his chosen career and thereby earning an
income, are “related to” those disabilities. The words
used in the Act limit the expenses which can be funded under the

When considering applications to the Tribunal to consider
reasonable and necessary expenses it is important to note that if a
decision is made by a participant and/or their family to go ahead
with the cost of supports that are not funded while awaiting the
appeal outcome, the Tribunal does not have jurisdiction to consider
whether the parents or the participant can be reimbursed, even if
the support is ultimately found to be reasonable and necessary.
Interestingly the Tribunal has found that decisions about payments
that have been made are not specified as reviewable decisions that
it can consider within the meaning of Section 99 of the Act.
Because decisions about payments are not reviewable, the Tribunal
has determined that it has no power to order that any amount of any
expenditure that has been paid over and above supports already
granted can be reimbursed. It has however clarified that the NDIA
itself does have the power to reimburse parents or participants if
they decide they want to.20 This is clearly a deficiency
in the Act and one that would almost certainly lead to participants
and their families being out of pocket even in circumstances where
a decision by the NDIA is overturned.

Another important factor to be aware of when considering
reasonable and necessary supports is that the NDIS is not required
to fund things that can be reasonably funded by the health system.
However, this has recently been clarified in a case of Burchell
and National Disability Insurance Agency 21brought
by a participant who, as a result of physical and mental
disabilities, had difficulty swallowing. The Applicant’s
dietician had formulated an eating plan that included food
supplements that were not available to him through the health
system. After it was submitted to the NDIA it was requested that it
be reviewed in favour of a less expensive plan. Following the
submission of a less expensive plan that included the same food
supplements, the NDIA rejected both and indicated that it was more
appropriately provided through the health system.

In this decision, the Tribunal considered earlier decisions of
the Tribunal that found that where health services can fund the
relevant support, it is not the responsibility of the
NDIS.22 However, this decision departed from this line
of authority and instead indicated quite clearly that the health
system did not actually fund the support sought by the Applicant
who was forced to use cheaper substitutes than the plan that was
designed for him which subsequently lead to health problems. In
short, the Tribunal found that it was reasonable and necessary to
grant the eating plan along with food supplements because it was
not adequately provided to him by the health care system.
Interestingly, consideration was given to the Productivity
Commissions report which formed part of the basis of the creation
of the NDIS and which also dealt with the question of directing
participants to the main stream public health system as opposed to
the NDIS wherever possible.

Whilst this Applicant was successful in his challenge and
received the support that he was seeking, this case does illustrate
the issue that arises on the question of funding when the NDIS is
funded by the Commonwealth Government and the health care systems
are funded by the State Government. In the writer’s view this
vests a very real conflict of interest in that it is in the
interests of the NDIS to try and re-direct participants to a State
funded scheme as opposed to a Commonwealth one which, in some
cases, may not be sufficient to meet a participants needs. In these
circumstances it is very likely that the type of argument run by
the NDIA in this case will not be the last time it is advanced;
particularly in light of the number of cases previously advanced
that do confirm that health scheme funded supports would not be
funded by the NDIS.23

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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