How the NDIS is being rorted by dodgy providers to pay for drugs, alcohol, cars and holidays
Taxpayer funds provided to the National Disability Insurance System have been used by unreliable providers to pay for medications, alcohol and holidays.
The dodgy practices were exposed by the NDIS’s head of fraud and integrity, John Dardo, during a late-night hearing into the scheme’s future funding.
Mr Dardo told the hearing that around $2 billion in NDIS funding is slipping through the cracks and being spent incorrectly.
He said dodgy providers were encouraging their customers to use their NDIS funding to pay for luxury holidays, rent, mortgages and luxury cars.
The revelation comes as the government debates how to limit wasted NDIS funding.
It is predicted that the cost of the NDIS will rise to $50 billion by 2025/2026, higher than the annual cost of Medicare.
Billions of dollars of taxpayers’ money sent to the NDIS have been used to fraudulently pay for things like drugs, alcohol and cars, the scheme’s head of fraud claims has said (stock image)
Mr Dardo informed the hearing of specific cases where funds used to help those in need were instead used for lifestyle and personal gain.
‘Examples from the past week [include] a $20,000 vacation, a $10,000 vacation,” he said.
‘Fortunately, when we were able to contact them, they understood that this was not the case and were willing to refund the money.’
‘But we have other participants…’ [who] then cut off contact and refuse to participate.’
Mr Dardo added that a man on a $480,000 per year plan would receive $40,000 per month, but would only need $20,000 to pay for his medical problems, with the rest going towards his mortgage.
He said he spoke with a participant who would meet his provider at an ATM for their payments.
“I very recently spoke with a participant who would meet the provider at the ATM, the provider would withdraw cash and give that money to the participant so she could purchase illegal substances.
‘We are not talking about tens or hundreds of participants, we are talking about significantly higher numbers. And these are providers who are doing everything they can to put people at risk by commercializing those participants and their plans.”
He said there had been numerous cases where organized crime groups had used fraudulent health reports to enroll people in the program, providing a steady stream of money to pay for their substance abuse treatment.
One participant said their provider would take cash from an ATM and give it to her so she could buy illegal drugs (stock image)
Mr Dardo said the huge amounts of funding the NDIS received was too attractive to bad actors.
‘The plan was designed with the best intentions; you talk to everyone who was there at the beginning… What no one had planned, when there is such a big pot of money there, [was that] it would attract behavior, risks and things that weren’t there before,” Dardo said.
‘The money must be able to flow more easily. But it should be easy to achieve good things… and that requires reform. There are weaknesses in the system design that need to be addressed. We simply cannot prosecute or police this.”
NDIS Minister Bill Shorten has acknowledged there are problems with fraud in the NDIS.
“I agree there are fraud issues in the scheme, but these fraud issues did not start yesterday,” Mr Shorten told parliament on Tuesday.
“The reality is that this plan was initiated by Labor and the Liberals then came to power, and there is no doubt that they increased the scale of the plan.
“But the problem with what they did is that I would have to label their management of the plan as incompetent and naive.”
He accused the coalition government of allowing the issue to fester while in power.
“The only difference between us and the people on the other side is that we are doing something to revamp the plan, but you have done nothing,” Mr Shorten said, gesturing towards the coalition.
“We continue to resolve the fraud.”
He reported approximately 500 ongoing compliance investigations, with 20 cases currently being prosecuted in court.
