Fraudulent NDIS Providers
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Four-billion dollars of NDIS spent on fraudulent expenses

It has come to light that four billion dollars of NDIS funds have been misused on fraudulent expenses, including cars, drugs, and alcohol.

Hearing Disclosure

During a heated late-night hearing, John Dardo, the NDIS Head of Fraud and Integrity, disclosed that at least five percent of the scheme’s funds were being spent in error. Dardo stated:

“At least five percent of the scheme is being spent in error.”

Opposition Demands for Change

The Opposition is calling for urgent reforms to address the misuse of funds. These funds have been spent on inappropriate and illegal items, including:

  • Cars
  • Drugs and alcohol
  • Holidays
  • Hard drugs such as heroin and ice

The Opposition argues that significant changes are needed to ensure the integrity of the scheme and prevent future misuse.

Looming Changes to the NDIS Scheme

John Dardo, NDIS Head of Fraud and Integrity, discussed the impending changes to the scheme which aim to tighten provider regulations and revolutionize how plan budgets are allocated.

These changes are causing concern among participants who have been told by their providers that they could access rent subsidies, alcohol, other lifestyle expenses, and gift vouchers through the scheme.

“The participants … have grown accustomed to that as a standard of living, or they have signed leases on the understanding that was the lifestyle they would enjoy. And saying, ‘Sorry, you cannot keep claiming that money to subsidize that type of spend’, you can imagine some of our participants are having their standard of living disrupted.”

Concerns and Challenges Highlighted

Senator Jordon Steele-John’s Criticism

Greens Senator Jordon Steele-John challenged Dardo for concrete numbers regarding the proportion of NDIS funding spent on inappropriate expenses. Dardo did not provide specific figures.

“When you put into the public domain an assertion such as you have made … it has really serious implications for the discrimination faced by disabled people in Australia,” said Steele-John. “In a scheme of 660,000 people, you will find individual examples of many different types of behavior. You have specifically referenced alcohol, and yet when asked to provide the specific numbers, you are unable to do so. That is deeply concerning to me.”

Liberal Senator Maria Kovacic’s Inquiry

Liberal Senator Maria Kovacic emphasized the challenge of ensuring genuine needs are met while addressing exploitation within the system. She questioned Dardo on whether illicit drugs had been recently sourced or sold through the scheme.

“Absolutely,” Dardo confirmed. “I have spoken very recently to a participant who would meet the provider at the ATM, the provider would withdraw cash, and provide that cash to the participant for her to source illicit substances … We’re not talking dozens or hundreds of participants, we’re talking significantly higher. And these are providers going out of their way to put people in harm’s way to commoditize those participants and their plans.”

Issues with the Current System

Dardo highlighted the difficulties in tracking inappropriate spending due to the system’s current design.

“Some of the channels participants can claim through require no ABN, no description, no word. Nothing. They can put in a dollar amount and they get paid,” he said. “I have been really transparent in saying the systems are immature. We rely on a range of indicators and data points and exemplar work and casework to actually bring a picture together.”

Organised Crime Involvement

Dardo also pointed out that organized crime has exploited the system by getting people onto the scheme through fraudulent health reports to facilitate cash flow for substance abuse.

“The scheme was designed with the best intent; you talk to anyone who was there at the beginning … What nobody planned on, when there’s such a big pot of money there, [was that] it would attract behaviors, risks, things that weren’t there before,” Dardo said. “It should be easier for the money to flow. But it should be easy for it to flow for good things … and that requires reform. There are weaknesses in the design of the system that need to be addressed. We just cannot prosecute or audit our way out of this.”


The NDIS scheme is facing significant challenges that require urgent reforms to prevent misuse and ensure that funds are directed towards genuine needs. The forthcoming changes to provider regulations and plan budget allocations are essential steps towards improving the integrity of the scheme.

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