Reduction of funding during NDIS transition

The Bilateral Agreement between the Commonwealth and Queensland for the transition to a National Disability Insurance Scheme (NDIS) sets out, amongst other requirements, the participant phasing schedule that will result in Queensland no longer providing disability services to those people whose needs are intended to be met by the NDIS. As such, departmental funding of specialist disability services and community care services will cease for existing clients who are eligible for the Scheme.

Cessation of funded support by the department will occur as part of a planned step-down reduction in line with the agreed phasing arrangements for transition to full Scheme from 1 July 2016 to 30 June 2019. Information regarding the progressive roll out of the NDIS in Queensland from July 2016 is available on the NDIS website.

As people transition to the NDIS and have an approved plan, the departments’ funding will reduce. Variations to reduce funding and services will be made in line with the Framework for the Reduction of Funding and Services through a Service Agreement (PDF, 279 KB) Framework for the Reduction of Funding and Services through a Service Agreement (DOCX, 37 KB) (the Framework).

An understanding of how the funding reduction will be applied can assist with the assessment of potential cash flow impacts for organisations as the source and timing of revenue changes. An organisations business practices may also need to be adjusted as the department ceases funding and services and there is an introduction of short payment provisions to recover overpayments.

Overpayments will occur as the department is continuing to provide funding payments quarterly in advance, and, people will transition out of state arrangements into the NDIS at different times throughout a quarter.

There are four different treatments in the Framework to manage the reduction across a variety of service delivery models and funding arrangements. The application of the Framework by the department and the calculations to determine the reduction and recoupment amounts will be based on the contracted funding and services.

As reductions are effected the department will give formal notice under the Service Agreement including specific information about;

  • the service user/s whose state funded service delivery has ceased and the date of cessation
  • the value of funding reduction
  • the type and quantity of output reduction
  • payment summary details (including short payment amounts and related funding cessation)

questions and answers guide (PDF, 584 KB) questions and answers guide (DOCX, 883 KB) has been developed to assist you in understanding how the funding and service reduction will occur. If you have any queries regarding the reductions for your Agreement please contact your regional contract manager.

Disability Services Recourse

As the Framework for the reduction of funding and services is automatically applied based on the contractual information the department holds pro-active management by both the department and organisations is essential to make sure the information held by the department is always reflective of the service delivery arrangements agreed throughout the NDIS transition. 

If there are reasonable circumstances where, despite pro-active management, a reduction is not reflective of the service delivery which has occurred, an organisation can request the department reconsider the amount of service or funding reduced in their Agreement and/or the amount of funding recouped due NDIS arrangements.

To be eligible for consideration an organisation will need to evidence that there was a true and reasonable basis for the service provision and use of funding. Recourse is only available for situations where:

  • the information held by the department was not reflective of the service delivery arrangement; or
  • the application of a daily pro-rata reduction of funding was not reflective of service delivery which has occurred.

recourse request form must be submitted along with supporting evidence within 20 business days of Notification being given.