Many NDIS participants are spending less than half their allocated funding, according to new research by the e61 Institute.
The analysis of service-usage data from Kismet, an NDIS plan manager, found that 34% of participants used less than half of their allocated budget, despite the NDIA reporting aggregate utilisation of 74% across the scheme.
“Some degree of underspending is expected because plans need buffers so participants can get all the care they need,” said Dr Pelin Akyol, Research Manager at the e61 Institute.
“But such a large degree of underspending among a third of participants may suggest that participants are struggling to access services or plans are not always aligning with people’s needs.”
The research found that there are some differences in utilisation rates between urban areas and regional areas where services may be more limited. However, most of the differences in utilisation are not explained by differences in service access across areas.
“Only about 2% of the variation in utilisation reflects differences across regions, with 98% occurring among participants who live in the same region. This tells us that participant-level factors and plan design are the most important factors in why people underspend,” said Dr Akyol.
The study also found that utilisation rates increase with time spent in the scheme. “We see a clear learning curve as participants use more of their plan the longer they are in the scheme,” Dr Akyol said.
The study also found that where budget flexibility is allowed, participants use it, highlighting gaps between allocated funds and actual support needs. By contrast, inflexible parts of plans may restrict spending and a substantial share of budgets—particularly smaller ones—go almost entirely unused.
“This suggests that initial allocations may not perfectly reflect real-world support needs. If plans are too rigid, they can leave participants with unused funds even when they still have unmet needs,” said Theo Gibbons, Research Economist at the e61 Institute.
“Understanding how the planning process impacts utilisation and participant outcomes will be increasingly important as the NDIA moves towards more standardised and structured planning processes.”
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