A new parliamentary inquiry has examined fraud, non-compliance and sharp practices in the NDIS. Here is what the report found and what it means for providers going forward.

Background

In March 2026, the Joint Standing Committee on the National Disability Insurance Scheme agreed to self-refer an inquiry into the integrity of the NDIS, following a recommendation from the Minister for the NDIS. The inquiry examined the nature and extent of non-compliance, fraud and sharp practices in the Scheme, the impact of this behaviour on participants and their families, and what legislative or other reforms might be needed to strengthen Scheme integrity.

The committee received 97 submissions and held three public hearings in Canberra, Sydney and Melbourne. Evidence was heard from participants, families, advocates, providers, workers, peak bodies, regulators and government agencies, including a joint submission from the Department of Health, Disability and Ageing, the National Disability Insurance Agency (NDIA) and the NDIS Quality and Safeguards Commission (NDIS Commission).

The inquiry sits within a broader period of reform. Since 2022, the Scheme has moved from a largely compliance-based approach to a more coordinated, intelligence-led response to fraud, including through the establishment of the Fraud Fusion Taskforce. The NDIS Amendment (Integrity and Safeguarding) Act 2026 passed parliament in April 2026, and the National Disability Insurance Scheme Amendment (Securing the NDIS for Future Generations) Bill 2026 was introduced concurrently with the inquiry, proposing further changes to fraud controls and provider regulation.

The committee's report was tabled with 12 recommendations. It is worth noting that the report includes additional comments from Coalition members and from the Australian Greens, both of whom raised concerns that the majority recommendations do not go far enough in different respects. Providers should be aware that further legislative change in this space is likely as these perspectives are considered by government.

Key findings

The committee's report painted a picture of a Scheme under increasing strain from fraud, non-compliance and sharp practices, with risks that have grown more organised over time.

The NDIA does not measure fraud directly, but instead tracks a broader "integrity leakage" figure covering everything from administrative errors to deliberate fraud, currently estimated at 8.2 to 8.3 per cent of Scheme payments, or around $3.7 billion a year. Evidence to the committee, including from the Australian Criminal Intelligence Commission, suggested this leakage increasingly reflects organised and coordinated exploitation rather than isolated misconduct, including cases where small inducements or profit-sharing arrangements were used to gain access to a participant's plan.

Registration remains a key gap: a high percentage of providers in the NDIS market are unregistered, creating what several submitters described as a "two-tiered" market with uneven oversight. The plan management sector was also flagged as high-risk, with over 90 per cent of the smallest 1,000 plan managers carrying fraud risk indicators. In response, from 1 July 2026, providers delivering supports that meet the new definition of supported independent living, and providers operating defined NDIS digital platform services, are subject to mandatory registration requirements. Mandatory registration of support coordination has been paused while further reform is considered.

Significant improvements have already been made to payment systems since 2022, including payment holds, bulk claim review, and stronger evidence requirements, contributing to $3.4 billion in combined savings and redirected funds. The Securing the NDIS for Future Generations Bill proposes reducing the claim-submission period from two years to 90 days from 1 December 2026. As at 15 July 2026, the current two-year claim period remained in force, and the proposed 90-day limit had not yet become law.

Beyond the financial picture, the committee heard evidence of real harm to participants, including plan depletion, exposure to unqualified workers, coercive control and psychological distress, with these risks often compounded in thin markets, regional and remote areas, and First Nations communities.

What this means for providers

The direction of travel is clear: registration requirements are expanding, oversight of plan managers and support coordinators is tightening, information sharing between regulators is increasing, and penalties for serious misconduct are becoming more severe. Providers should treat the following as priorities:

• Determine whether the new mandatory-registration rules apply

• Review your conflict-of-interest arrangements

• Strengthen record-keeping now

• Prepare for identity verification requirements

• Review service agreements

• Monitor the proposed national worker registration scheme

• Expect closer scrutiny of pricing and claiming patterns

• Be alert to the changing whistleblower landscape

• Monitor for signs of exploitation and coercive control

• Strengthen governing-body oversight

• Conduct an integrity and safeguarding readiness review

Conclusion

Taken together, the report signals a continuing shift toward broader market visibility, more active regulatory oversight and stronger evidence requirements across both registered and unregistered providers. The direction of reform is consistent across every area examined by the committee: greater visibility of who is operating in the market, stronger evidence behind every claim, clearer accountability where conflicts of interest arise, and less tolerance for providers who cannot demonstrate that the supports they are funded for are actually being delivered.

The reforms are being driven by consistent, serious evidence of harm to participants, from plan depletion and coercive control to exposure to unqualified workers, and by a Scheme-wide recognition that fraud and non-compliance are not victimless. Providers who treat these obligations as central to how they operate, rather than as an administrative burden layered on top of service delivery, will be better placed to withstand the scrutiny that is coming and to build trust with participants, families and regulators alike.

 

Nicole Chen

Nicole is a Principal Consultant at Ideagen CompliSpace with a background in the healthcare industry across acute, aged and community services. Throughout her career, she has held various management and clinical positions, contributing significantly to both research and higher education within the sector. Nicole provides valuable knowledge and insights from both a clinical perspective and a nuanced understanding of the operational and strategic aspects of healthcare. She holds a Bachelor in Nursing, a Postgraduate Certificate and a Doctor of Philosophy (PhD).

 

 

Nick Edwards

Nick is a Legal Content Senior Associate at Ideagen CompliSpace. Nick has several years' experience designing and administering eLearning for the Aged Care Sector and holds a Bachelor of Laws from the University of Technology Sydney with First Class Honours.