How to stop fraudsters tricking disabled people out of their NDIS funding

July 16, 2026

I mentioned a week or so ago that someone's NDIS provider had arranged a gardener to mow a small lawn, with the NDIS provider paying $700 per week (and billing it to the NDIS). The lawn was about a quarter the size of the lawns at the flats where I live and the person who mows them said she got nothing like that for mowing them fortnightly.

A member of my family was receiving NDIS assistance because she suffers from chronic and severe anxiety. The assistance took the form of about three hours of support a week to help with some of the housework and to take her shopping.

Her landlord told her that he wanted to move back in to the house she was renting and gave her very generous notice to find somewhere else to live. Her NDIS provider said that thy would help her find a new place and would even subsidise her rent by $100 a week provided she agreed to a few more hours of support.

Sounds good, doesn't it? The $100 didn't come off the rental stated in the lease, but was a backhander to the estate agent. The few more hours of support turned into eight hours a day, Monday to Friday. All billed to the NDIS.

The continued presence of people in her house increased her anxiety so she asked them to stop coming. Their answer was to have someone sit in a car in her driveway all day.

Another member of my family works for a company that has a peripheral connection to NDIS services and she swung into action. The dodgy provider was reported to the relevant authorities and an honest provider was found and took over. Some threatening emails arrived from the crooked NDIS provider. They were forwarded to the person lodging the complaints and otherwise ignored.

But it didn't end there. A week or so later an email from the estate agent arrived saying that the tenant should immediately contact Centrelink to have her rent payments increased by $100 a week. The email was forwarded to me and I wrote to the agent pointing out that she was paying exactly the amount on the lease and would not be paying any more. Because I like poking with a sharp stick, I suggested the agent should apologise to the tenant for the "mistake" because it had made her more anxious.

And that was the last anyone heard from the shonky agent or the crooked NDIS provider. I have told the tenant to expect a larger than warranted rent increase on her next anniversary, but we will deal with that when the time comes.

There is a temptation to blame welfare recipients for fraud and wastage in government programs. There are almost certainly people claiming benefits to which they are not entitled, but almost all the fraud in the NDIS is being conducted by those people pretending to be the ones doing the helping.

Mona Nikidehaghani, University of Wollongong

Fraud has been on the National Disability Insurance Scheme (NDIS) radar for years. Now, a new parliamentary report has made 12 recommendations aimed at stopping criminals, dishonest providers and other "bad actors" from exploiting the scheme.

The report calls for better information-sharing between government agencies, stronger action against kickbacks and conflicts of interest, a worker registration system, and better whistleblower protection.

But even more could be done to protect participants and detect fraud before false claims are paid.

How big is NDIS fraud?

The National Disability Insurance Agency recently estimated that around A$3.7 billion, or 8.3% of its payments in the previous financial year, was affected by what it calls "integrity leakage".

But this figure should be treated carefully. Integrity leakage can include mistakes, poor record-keeping, incorrect claims and other breaches of the rules.

Fraud can take many forms

A provider might charge for a service that was never delivered, add extra hours to an invoice or charge the NDIS more than it charges other customers.

Fake businesses may be created to submit claims, while some criminals impersonate participants, providers or support coordinators to gain control of NDIS money.

More disturbing cases involve participants being intimidated or threatened to allow a provider to use their plan.

Criminal groups may also work with some providers or intermediaries to prepare false documents, inflate support needs or direct participants towards particular services.

These actions can use up money a participant needs for essential support. It can leave people without services later in their plan, place them at risk of violence or neglect, and make them frightened to speak out.

What did the report say?

The report recognises the way the scheme was designed and rolled out left important gaps.

Government agencies have not always shared information effectively. This means a person or business excluded from one part of the care sector may be able to appear somewhere else under a different role or business name.

The NDIS market can also allow one organisation to advise a participant, manage their funding and sell them services, creating obvious conflicts of interest.

The report recommends better information-sharing so providers banned from other care sectors cannot simply move into the NDIS.

It calls for a system for managing conflicts of interest, stronger penalties and reporting requirements for kickbacks, and stronger whistleblower protections.

It also recommends a stronger worker registration system

Currently, around 92% of NDIS providers are unregistered. This makes it harder for the NDIS regulator to know who is operating in the market, whether they have a history of misconduct, or whether they have simply reopened under a different name.

This does not mean all unregistered providers are dishonest. Many are trusted businesses participants choose and prefer. But the lack of scrutiny can make it harder to identify suspicious behaviour before money is lost or participants are harmed.

A previous taskforce recommended a tiered approach, with stronger checks for providers delivering higher-risk services and simpler requirements for those offering lower-risk support.

The report supported stronger registration and oversight of the NDIS workforce. It didn't specifically recommend a tiered approach but doing so would allow the regulator to focus its attention where the risks of fraud and harm are greatest.

Not every provider should face the same costly and complex process. A small provider offering gardening or household help should not necessarily face the same requirements as a company controlling a participant's housing, personal care and large amounts of funding.

However, if registration is too costly or difficult, some smaller providers may leave the market. This could reduce participants' choice and, in some areas, leave people without access to essential services.

What more can be done?

Stronger investigation powers and tougher penalties usually come into play after suspicious payments have been made or somebody has already been harmed.

A better system would also ask how could this claim have been stopped before the money left the scheme. How could the participant have received help before becoming trapped by the provider? And what protection would the participant receive if they reported what was happening?

Participants need reporting pathways that are safe, accessible and independent of their providers. A standard fraud hotline may not be enough for someone who relies on the suspected provider for personal care, transport, communication support or housing.

Some participants may fear losing essential services if they complain. Others may worry they will be blamed or asked to repay money, or will have their plan placed under greater scrutiny.

This is where independent disability advocacy is essential. Advocates can help participants understand what has happened, gather information, make a report and arrange alternative support. But advocacy organisations need reliable, long-term funding to perform this role.

More can be done to check claims before they're paid

The NDIS processes an enormous number of transactions. So the payment system should be able to check basic details before releasing money.

This could mean asking:

does the provider's business number match its bank account?
is the provider permitted to deliver that type of service?
does the invoice match the participant's plan?
is the same service being claimed repeatedly, or by several related businesses?
has the provider recently changed its ownership, address or bank details?

These checks could identify unusual claims before payment, rather than relying mainly on investigations and debt recovery afterwards.

What happens next?

The government will now consider the report's 12 recommendations.

But this is only one part of a much bigger debate about the future of the NDIS. A separate Senate inquiry is examining proposed changes to eligibility, participant plans and funded supports, which are expected to reduce projected NDIS spending by $37.8 billion over four years..

As the government considers wider changes to the NDIS, it should not allow concerns about fraud to become a broad justification for reducing participant supports. Fraud, weak regulation, poor service quality and rising costs are related but distinct problems, and require different responses.

Mona ikidehaghani, Senior Lecturer in Accounting, University of Wollongong

This article is republished from The Conversation under a Creative Commons license. Read the original article.