The Government has announced a Productivity Commission review into the National Disability Insurance Scheme (NDIS) costs.

The Heads of Agreement between the Commonwealth and the States and Territories on the NDIS agreed to go ahead with the Commission to review the NDIS costs, which will inform the final design of the full scheme.

Review of the NDIS Cost Media Release

Productivity Commissions NDIS Cost Terms of Reference

The scope of the study will focus on addressing the following issues identified in the Heads of Agreement:

• the sustainability of scheme costs
• jurisdictional capacity
• cost pressures (including wages pressures)
• changes in the agreed escalation parameters
• if efficiencies have been achieved within the scheme
• whether there has been any impact on mainstream services
• examine the most appropriate levers to manage any potential cost overruns.

The study will examine issues including: the sustainability of scheme costs; jurisdictional capacity (including the complementary disability services provided by the States and Territories); cost pressures (including wage pressures); changes in the agreed escalation parameters; whether efficiencies have been achieved within the scheme; whether there has been any impact on mainstream services; and examine the most appropriate levers to manage any potential cost overruns.

The review was flagged in the Heads of Agreement signed between the Commonwealth and states and territories from December 2012. It was originally scheduled to commence in July 2017 but has been brought forward several months to allow for its completion by the end of the year.

Public consultation will be undertaken as part of the study and the Government encourages all interested parties to participate. Further information and the terms of reference are available on the Commission's website.

The Productivity Commission is due to report to Government within eight months of receipt of the terms of reference.