Bill Shorten says comparisons suggesting changes to the NDIS will amount to a robodebt 2.0 are “complete rubbish” as the Greens and some experts raise concerns about how debt-raising measures might affect the disabled community.
At a hearing last week, legal experts warned senators that scheme participants could be stung with high amounts of debt if they incorrectly interpreted what items and supports can be funded under the new rules.
The changes would also prevent participants from being able to launch a review of the debt. Instead, they will need to apply for a special circumstances waiver to avoid paying it in a move some legal experts said had the “flavour and smell” of the unlawful robodebt program introduced under the former Coalition government.
The proposed changes to the NDIS, revealed in March, aim to clarify how participants can access the scheme, adjustments to how budgets and plans are offered, and what supports can be funded, among other tweaks.
The Albanese government considers the changes a first step toward making the scheme more financially sustainable over the coming decade.
A Labor-majority committee recommended the bill be passed in June but said the government should offer more details on exactly how the changes would affect the disability community. The Greens and Coalition teamed up to send the bill back to a committee for further consideration.
Shorten has been critical of the parties’ move to delay the bill’s vote in the Senate for more than a month, claiming each day delayed could cost $1.1bn – $330m for changes to tackle intra-plan inflation and $733m for the plan to develop a new budget model for supports.
But experts invited to the additional hearings have raised a new potential concern – that well-meaning participants might rack up large debts due to a misunderstanding of the rules designed to curb the scheme’s exponential cost.
Belinda Kochanowska, founder of NDIS law firm Intrepidus Law, told senators the proposed wording failed to adhere to basic legal principles such as “innocent until proven guilty”.
“I’m concerned about this flavour and smell that’s similar to robodebt where we can just make these arbitrary decisions about people and strip them of supports and entitlements,” Kochanowska said.
Under the existing rules, the National Disability Insurance Agency (NDIA), who administers the NDIS, can raise debts against participants who use funds for items and services other than those needed to support their impairments.
While the debt itself cannot be reviewed if the agency decides it exists, a waiver can apply if the agency made an error, if the debt is less than $200, or if a settlement is reached for less than the original debt.
The NDIA’s chief executive can also issue a debt waiver in special circumstances, though financial hardship or the participant’s disability cannot be considered in the decision.
Beyond raising debts, the NDIA can also choose to take control or vary a participant’s plan in response to suspected misspending.
The new rules would change what items can be funded under participant plans. It will also introduce a system to split budgets into two piles – “flexible” supports for everyday requirements and “stated” supports for big one-off equipment or service costs.
The Victoria Legal Aid’s submission urged for clear pathways to challenge the agency’s decisions to raise debt.
The submission also stated that disability could be a “crucial consideration” in understanding how the debt occurred and whether it should be waived.
Victoria Legal Aid lawyer Miles Browne said the bill prevents participants from contesting whether a debt should exist in the first place.
“There’s a special circumstances waiver, but, in considering whether a special circumstance exists, the agency or decision-maker cannot look at the impact of the person’s disability and cannot look at their financial circumstances,” he told last week’s hearing.
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“It is very surprising, in legislation of this type, in a circumstance where we’re going to see far more debts raised against participants, that these fundamental debt protections do not exist.”
The Greens’ disability spokesperson, Jordon Steele-John, accused Labor of “failing to utilise the learnings of robodebt” by “providing fewer protections and more confusion for participants”.
“My office regularly hears from participants who have urgently needed to change supports to address risks to their health and safety, and are then penalised for this. The system needs to support participants in these circumstances, not disadvantage them,” he said in a statement.
Shorten described the comparison to robodebt as “without basis and complete rubbish”.
“Never in the modern history of Australia, has a government listened to and worked more closely with people with disability,” he said in a statement to Guardian Australia.
“I organised the robodebt class action, and I proposed the robodebt royal commission. I did not hear from Jordon Steele-John on either issue.”
An NDIA spokesperson said debt recovery was not new and that it was “incorrect” to assume the process was automated or that decisions weren’t reviewable.
At a hearing on Thursday, the Department of Social Services deputy secretary, Robyn Shannon, said the department was “actively looking at whether or not we could address these concerns through a kind of strengthened special circumstances waiver”.
The NDIA’s lawyer, Matthew Swainson, said the agency’s debt-recovery practices were “small” and that “every debt is reviewed by not just one but various layers of humans”.
“We are acutely aware of the robodebt royal commission findings, and I would submit that our debt program is nothing like it.”
The online compliance intervention, known as robodebt, was devised in 2015 using an averaging process of Australian Taxation Office’s income data to estimate welfare recipients’ income. Debts were then raised for recipients the department deemed had been overpaid.
After years of anger and complaints, a royal commission into the income-averaging scheme was established.
In July 2023, royal commissioner Catherine Holmes delivered her final report, labelling the unlawful scheme as “crude and cruel” and “neither fair nor legal”.