letaifixit

Welfare + fraud · Issue

Why does the NDIS cost so much, and how much is fraud?

Written by an AI, prompted by a human, checked against the linked sources. Updated 2026-09-08. Spotted an error?

Short answerThe NDIS cost $46.3 billion in 2024-25 and is growing about 10.8 per cent a year, per the NDIA's own quarterly report. The Fraud Fusion Taskforce had more than 500 active fraud investigations at last count. There is no audited public figure for total NDIS fraud. Cause: a demand-driven scheme paying half a million claims a day with checks bolted on afterwards.
$46.3bn
NDIS scheme expenses, 12 months to June 2025 (NDIA)

What's happening?

  1. Total scheme expenses for the 12 months to June 2025 were $46.3 billion, and the annual growth rate was 10.8 per cent.Source: NDIA Quarterly Report Q4 2024-25
  2. Projected scheme expenses are $210.3 billion for the four years to June 2028.Source: NDIS news, Annual Financial Sustainability Report summary
  3. The NDIA processes about 500,000 claims per day, second only to Medicare.Source: Department of Health, Disability and Ageing, Budget 2025-26
  4. The government says its latest changes will hold the scheme to $55 billion in 2030, instead of the more than $70 billion forecast in the 2025-26 budget.Source: ABC News, 21 Apr 2026
  5. The Fraud Fusion Taskforce reported 97 operations, 521 active investigations and more than 50 people referred to the Commonwealth DPP at its two-year mark.Source: NDIS news, Fraud Fusion Taskforce two-year milestone
  6. Total NDIS fraud: no public figure. Neither the NDIA nor the ANAO has published an audited estimate of total fraud loss. We will not invent one.letaifixit.org note

Why is it happening?

Pay first, check later.

Half a million claims a day are paid largely on trust and audited afterwards. Any payment system built that way leaks. Each successful prosecution is one provider; the taskforce lists hundreds of open investigations at a time.

Source: Department of Health, Disability and Ageing

Growth was budgeted at 12 per cent and treated as normal.

The NDIA's own sustainability report projected 12 per cent growth for 2024-25 and calls 8 per cent the target. A programme growing at 8 per cent doubles in nine years. That is the plan, not the failure case.

Source: NDIA Quarterly Report Q4 2024-25

Nobody publishes the fraud number.

The taskforce reports arrests, warrants and seizures. It does not report an estimated loss rate. Without a loss rate, nobody can say whether $1 in every $100 or $1 in every $10 is going astray, so nobody can be held to reducing it.

Source: NDIS Fraud Fusion Taskforce

How would you fix it?

Ranked by how much of the problem each one removes, in the AI's opinion, based on the facts above.

  1. Publish an audited fraud loss estimate every year.The ATO publishes a tax gap for every tax. The NDIA should publish a payment-integrity gap the same way: sampled, audited, with a target. What gets measured gets managed.
  2. Pre-payment checks on the risky categories, not post-payment chasing.Flag new providers, sudden billing jumps and plan-manager clusters before money leaves. Card networks do this in milliseconds; a $46bn scheme can too.
  3. Provider registration with real teeth.Unregistered providers still bill the scheme through plan managers. Require registration for anyone paid more than a set amount per year, and strike off on first proven fraud.
  4. Report the growth rate against the target quarterly, on one page.The 8 per cent target exists. Publish actual vs target every quarter, in plain numbers, with the reasons for any miss.

What fixing it could save?

$0.5–1.2 billion
a year, low to high. OUR estimate, not a government figure. Built from the linked sources and the assumptions below.
  1. Start from scheme expenses of $46.3 billion in 2024-25 (government figure).Source: NDIA Quarterly Report Q4 2024-25
  2. OUR estimate: fraud and over-servicing leakage of 2% (low) to 5% (high) of payments. There is no government figure for this; the Fraud Fusion Taskforce publishes investigations (500+) and prosecutions, not a loss rate, so this is an assumption in line with leakage rates other large payment systems report.Source: NDIS Fraud Fusion Taskforce
  3. OUR estimate: pre-payment checks and provider registration stop half of that leakage. $46.3bn × 2–5% × 50% = $0.5–1.2 billion a year.letaifixit.org note
  4. Not counted: slowing scheme growth toward the 8% target, which the government already books as its own reform saving.Source: ABC News, 21 Apr 2026

Every line marked OUR estimate is an assumption made by an AI for this experiment. Government figures are marked as such and linked. Change the assumptions and the range changes; that is the point of showing them.

Questions people ask

How much does the NDIS cost per year?

$46.3 billion in scheme expenses for the 12 months to June 2025, per the NDIA's Q4 2024-25 quarterly report.

How fast is the NDIS growing?

10.8 per cent year on year at June 2025 (NDIA). The government's target is 8 per cent by 2026-27.

How much NDIS money is lost to fraud?

There is no audited public figure. The Fraud Fusion Taskforce reports investigations (500+ active) and prosecutions, not a total loss estimate.

How much could be saved by fixing this?

Our estimate is $0.5–1.2 billion a year. It is an AI's estimate built from the linked public figures and stated assumptions, not a government number.

Written by an AI, prompted by a human, checked against the linked sources. This page is opinion generated by an AI model from the linked public sources. It discusses public bodies, programs and policies, never private individuals. It is an experiment, not journalism or advice. Full disclaimer · Request a correction