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NDIS agency to spend $50m on lawyers to fight people with disability who appealed funding cuts

Critics argue national disability insurance scheme participants are increasingly being pitted against solicitors from top firms

People protest against NDIS funding cuts outside the Administrative Appeals Tribunal in Melbourne
People protest against NDIS funding cuts last month. The National Disability Insurance Agency’s legal bill may hit $50m for the 12-month period. Photograph: Diego Fedele/AAP
People protest against NDIS funding cuts last month. The National Disability Insurance Agency’s legal bill may hit $50m for the 12-month period. Photograph: Diego Fedele/AAP

The agency running the national disability insurance scheme is on track to rack up nearly $50m in fees to private law firms this financial year, as it defends itself against people with a disability and their advocates appealing cuts to support packages.

New figures published in response to Senate estimates questions on notice show the National Disability Insurance Agency (NDIA) spent $41.4m in the 10 months to 30 April 2022, a 140% increase on the previous 12 months.

With the agency spending an average of about $4m a month on fees to external firms, including $5.6m last month, it could be expected its total legal bill may hit $50m for the 12-month period.

By comparison, the agency spent only $17m in 2020-21 and $13.4m in 2019-20.

It comes after a significant increase in the number of NDIS participants appealing cuts to their funding packages and the denial of supports.

The NDIA has already come under fire for the frequency with which it engages private firms to defend appeals cases brought by people with disability and their families. These include people appealing reductions to funding packages.

Critics argue this sets up a situation where people with disability and their advocates, often not lawyers, are pitted against solicitors from some of the country’s top firms.

The $41m paid to private lawyers to defend the NDIA at the administrative appeals tribunal (AAT) also pales in comparison to the funding provided to advocates and legal aid to assist people with disability in their appeals.

Mary Mallett, the chief executive at Disability Advocacy Network Australia, said legal aid commissions and advocacy organisations had received about $13.5m from the Department of Social Services for 12 months’ work assisting NDIS participants at the AAT and in the earlier internal review process.

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Guardian Australia has reported extensively on the spiralling legal fees and increasing number of appeals cases, as well as the personal stories of participants who have spent months fighting cuts to their packages and other issues.

This included Ruth and Peter, an elderly couple who’ve been forced back to the AAT for a second time in two years, and Toby Tyne, who spent the last months of his life battling the agency at the AAT.

Another of those dealing with the AAT, Samar Bain, had her funding reinstated after Guardian Australia reported on her case last week.

During the election campaign Labor promised to fix what some advocates have labelled a crisis, promising to introduce a new reviews process and to fix the planning process which determines individual funding packages.

The incoming NDIS minister, Bill Shorten, told Guardian Australia on Tuesday: “We have committed to an investigation of appeals spending – to stop this problem at its source – and we will increase support to appeals providers.”

Shorten will be sworn in as NDIS minister on Wednesday.

The former NDIS minister under the Coalition government, Linda Reynolds, played down the increase in appeals. She argued Labor’s plan for a new reviews process would only introduce more bureaucracy to the system.

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The Greens disability spokesman, Jordon Steele-John, said the increase in legal costs was “a symptom of a very concerning trend in the NDIA to exclude and restrict access to the NDIS”.

He said the money would have been better spent on participants.

“The vast majority of AAT cases result in the agency agreeing to the participant’s initial request,” Steele-John said.

“Sending people to a tribunal to fight for what they need and are entitled to is a cruel tactic that must end.”

He said the “extreme spending further illustrates why it’s so important to put disabled people in leadership positions at the NDIA”.

The latest NDIA quarterly report said there were 4,265 open AAT cases at March 2022.

It said there were 1,583 cases in the March quarter, a 244% increase on the 460 cases in the same period in 2021.

An NDIA spokesperson said those cases represented 1.24% of active participants.

“Legal costs have increased in the past 12 months, as have the number of AAT applications and participants in the scheme,” the spokesperson said.

“The agency fully respects the right of any participant to seek a review of a decision through the AAT.

“The NDIA’s legal spend on AAT matters includes costs attributed to obtaining independent evidence to assist the AAT in its task and the preparation of documents that assist an Applicant and the AAT to consider the issues in a case.”