Ninety percent of the 1,000 smallest National Disability Insurance Scheme plan managers have been flagged for fraud or integrity, Labor has admitted.
The Albanese government has promised to rein in the $56 billion/year scheme, which already costs more than Medicare, and NDIS Minister Jenny McAllister revealed last week it was losing about $4 billion a year to fraud, although investigators have previously said losses were over $8 billion and too high to calculate.
Ms McAllister told News24 (formerly Sky News Australia) on Sunday there were 1,400 plan managers across Australia, including 20 large companies that controlled about half of the market.
But she said that of the smallest 1,000 operators, the vast majority had red flags, and the government was planning to overhaul the scheme as a result.
“Nine out of 10 of that bottom 1,000 companies have some flag for fraud or integrity,” Ms McAllister said, but did not specify how many of the remaining 400 had also been flagged.
“We are moving to deal with that by commissioning plan managers. We’ll go to market, we’ll have a panel of reputable plan managers.”
Ms McAllister also claimed the previous Coalition government was to blame for the out-of-control scheme, but Liberal MP Tim Wilson said Labor was trying to avoid taking responsibility.
“During the previous government, we made constant attempts to try and cut back the corruption, the fraud in the system, Labor opposed it every step of the way,” he said.
The National Disability Insurance Agency said in July its Fraud Fusion Taskforce (FFT) had prosecuted just 27 people for crimes against the NDIS since 2022, resulting in 18 offenders being jailed.
Since 2022, when Labor came to power, the government has pumped $1.1 billion into the FFT, Crack Down on Fraud and Payment Integrity programs, which it said was projected to deliver more than $3.4 billion in benefits by 2029.
An analysis from earlier this year found that Sydney’s worst areas for NDIS fraud were Labor heartland seats in the west and south-west that are home to the city’s largest Muslim and immigrant populations.
Last week a Filipino man admitted defrauding the NDIS out of $230,000 intended for vulnerable Aussies while he was living overseas, and late last month an African former public servant was arrested over an alleged $18 million plot in Darwin. Her husband has also been charged.
Header image: Left, an NDIS fraudster being taken into custody in Sydney (AFP). Right, raid on alleged NDIS fraudsters (FFT).
