Compensation and the National Disability Insurance Scheme

The effect of applying for funding through the NDIS on compensation received following a court order/settlement in relation to a disability can provide many challenges. The legislation has provided for this scenario in order to avoid the possibility of “double dipping”.

It is reassuring to note that people who are eligible for NDIS may receive funded supports and services despite receiving compensation from another organisation, such as the Traffic Accident Commission or Spinal Injuries Australia. The NDIS is designed to complement, not replace, existing compensation arrangements for personal injury.

The NDIS guidelines provide for the recovery and/or the reduction of funds where compensation for personal injury has been received as a result of a Judgement or Settlement. The NDIS can also require that a participant seek compensation and even take action on their behalf where appropriate. In cases where compensation has been received the NDIS must establish what component of the compensation relates to supports properly provided by the NDIS. If this is easily done by reference to the Judgement or papers prepared during settlement negotiations, then the calculation is relatively simple. The NDIS takes this figure and deducts any payments already made by the participant personally before arriving at what is known as the ‘Compensation Reduction Amount’. This amount is then apportioned over the expected life time of the participant and used to reduce the amounts payable by the NDIS. Another way of looking at this is that the participant will have to pay a certain proportion of the supports from the compensation money received and the balance, if any, will be paid by the NDIS.

In the case of a Judgement/Settlement which does not specify the proportion of the compensation related to NDIS supports then a series of assumptions are made which feed into the NDIS calculations.

Due to the individualised nature of NDIS, it is ultimately very difficult to know exactly how much a participant will need to contribute to their support until they have undergone the initial stages of an application. This involves the participant taking part in the ‘planning and assessment conversation’. This process is based on the participant’s statement of goals and aspirations and looks at the particular strengths and abilities of the participant with a view to these being maximised or enabled. In complex cases, it is well worth seeking professional help with the application process.


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