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NDIS - Defining What is Reasonable and Necessary - Part One

NDIS – Defining What is Reasonable and Necessary – Part One

Published on December 15, 2020 by Joshua DaleJoshua Dale

First presented at the National Disability Conference by Joshua Dale, this series of articles examines the National Disability Scheme.

Article One looks at the establishment of the NDIS, eligibility criteria for participating in the scheme, and defining what is reasonable and necessary in respect of receiving supports under the NDIS.


The National Disability Insurance Scheme came into being in 2013 with the passing of the National Disability Insurance Scheme Act 2013 (“the Act”).  The Act created a scheme that would allow for the implementation and funding of care plans for individuals with a disability in Australia.  Throughout its development and implementation the scheme has been lauded as one of the greater modern day successes in supporting those with a disability in Australia and on the other hand has been criticised in its application. This is due to the delays in delivering supports, and in some cases the delivery of inadequate supports that do not take into account individual circumstances of participants which is the very object of the scheme.

In 2015 the Australian Bureau of Statistics Survey of Disability, Ageing and Carers found that around 4.3 million Australians had a disability.  Further, of that number, about 1.4 million people had a severe or profound core activity limitation which meant that they require assistance with day-to-day activities related to self-care, mobility and communication.  Given these figures are likely to have increased with the growth of our population, what is abundantly clear is that a National Disability Insurance Scheme is a necessary scheme in order to support those living with a disability in Australia.

Eligibility Criteria for Participation in the Scheme

In order to gain access to the scheme a person must meet the access criteria as defined in Chapter 3 Part 1 of the Act which includes that they must:

  1. Be aged under 65;[1]
  2. Reside in Australia and be either an Australian citizen or holder of an appropriate visa including permanent visas;[2]
  3. Meet disability requirements that are attributable to one or more intellectual, cognitive, neurological, sensory or physical impairment or to one or more impairments attributable to a psychiatric condition. In addition they must be permanent or likely to be permanent and the impairment must result in a substantially reduced functional capacity to undertake activities including communication, social interaction, learning, mobility, self-care, self-management and the disability must otherwise affect the persons capacity for social or economic participation such that they will require support under the scheme for the persons lifetime.[3]
  4. Meet the early intervention requirements, being that the CEO must be satisfied that the provision of early intervention supports for the person is likely to benefit them by reducing their future needs in relation to their disability. In considering whether or not the person is likely to benefit from the supports, the CEO must be satisfied that it would mitigate or alleviate the impact of the persons impairment upon their capacity to undertake communication, social interaction, learning, mobility, self-care or self-management or prevent a deterioration of such function or capacity or indeed improve such function or capacity and otherwise strengthen the sustainability of informal supports available to the person.  The Act gives a specific example that a person with a degenerative condition could meet the early intervention requirements and therefore become a participant even in circumstances where their capacity may be greater than what it might otherwise be at some point in the future in the event degeneration occurs.[4]

The CEO of the National Disability Insurance Agency (“NDIA”) does have the capacity to revoke participation status if any of the eligibility criteria including the residence, disability or early intervention requirements are not met at some point after participation occurs.

It is important to note that a blanket approach cannot be taken by the NDIA to deny access to support. For example in the decision of Evans and NDIA (“Evans”),[5] the NDIA relied on a guidance policy which stated that hearing loss of more than 65 decibels was a threshold for access to the scheme.  On appeal, the Administrative Appeals Tribunal (“the Tribunal”) found that the relevant question is always whether a specific person has an impairment that results in substantially reduced functional capacity to do one of the things defined in Section 24 of the Act, set out at point 3 of the eligibility criteria above.[6]

The case of Evans is of particular interest to the NDIS community because it is a clear example where the Tribunal will push back on the NDIA’s approach to rely upon its policies and operational guidance as an absolute bar to someone accessing the NDIS, or receiving a certain level of support.  However, it is important to note that operational guidance and policy is important, and the Tribunal will usually have regard to it, but not if it is inconsistent with the legislation.  Therefore, the legislation will always take precedence over any policies or operational guidance that the NDIA might seek to apply in a particular case.

In another recent decision in FSQQ and National Disability Insurance Agency,[7] the Tribunal confirmed that a “beneficial approach” should be taken to interpreting the Act.  The Tribunal has emphasised that if the NDIA thinks that the information provided to it by an Applicant about their disability is insufficient, then the NDIA is under an obligation to seek further information from them.  In this case it was not acceptable to simply deny the claim because insufficient information was provided.  What this seems to suggest is that the NDIA does have an inquisitorial function in that it must make its own enquiries in circumstances where it formulates the view that insufficient information is given about a submitted disability.

In review of the case law it appears there is a consistent line of authority where the NDIA raises disputes about the permanent nature of psychiatric disabilities suffered by potential participants.  For example, in the decision of Furminger and the National Disability Insurance Agency,[8] the Tribunal affirmed a decision of the NDIA accept the provision of support for a spinal condition but to deny access to the applicant who was diagnosed with clinical depression and PTSD on the basis that the psychiatric conditions were not accepted as being permanent or likely to be permanent.

The practical effect of this is that no supports would be provided for the psychiatric diagnosis.  The reasoning provided by the Tribunal indicated that there was no evidence to satisfy the Tribunal that the impairments resulted in satisfaction of any of the disability requirements in Section 24 of the Act, namely that the impairment or impairments result in substantially reduced functional capacity to undertake or psychosocial functioning in undertaking activities involving communication, social interaction, learning, mobility, self-care and self-management and/or affecting the persons ability for social and economic participation and the likelihood that they would require support for the remainder of their life.  The issue in this case largely appeared to be that the evidence seemed to suggest that with treatment that this participant could have likely recovered and/or improved so as not to render the condition permanent.[9]

Conversely, in a more recent decision of KDYG and National Disability Insurance Agency,[10] a reviewable decision denying access to an individual with complex PTSD with dissociative identity disorder, severe anxiety, severe depression, chronic suicidal ideation and disorientation was overturned and the participant was accepted in the scheme.  In that case careful consideration was again given to Section 24 of the Act and the evidence before the Tribunal such that the Tribunal was persuaded on the evidence that the Applicant met the access criteria contrary to the decision made by the NDIA.  The Tribunal went further at paragraph [91] to say that:

Having found that the Applicants impairment or impairments are permanent and that they result in substantially reduced functioning to undertake self care, the Tribunal finds that she is likely to require the support of the NDIS for her lifetime pursuant to Section 24(I) (e) of the Act.”[11]

Having regard to these decisions it is therefore extremely important to ensure that any evidence diagnosing a psychiatric condition deals not only with the required supports and diagnosis, but most importantly the permanence of any particular condition. In a practical sense this will be very difficult to establish in a case involving a recent event or diagnosis.

Defining what is Reasonable and Necessary

In order to receive supports under the Act they must be determined to be reasonable and necessary.  The concept of what is reasonable and necessary is by no means a new concept and has been in place and applied in various State based compensation schemes for a number or decades. The relevant section of the Act appears in Section 34 which says that the CEO of the NDIA must be satisfied of the following:

(a) The support will assist the participant to pursue the goals, objectives and aspirations included in the participants statement of goals and aspirations;

(b) The support will assist the participant to undertake activities, so as to facilitate the participants social and economic participation;

(c) The support represents value for money in that the costs of the support are reasonable, relative to both for benefits achieved and the costs of alternative support;

(d) The support will be, or is likely to be, effective and beneficial for the participant, having regard to current good practice;

(e) The funding or provision of the support takes account of what is reasonable to expect families, carers, informal networks and the community to provide;

(f) The support is most appropriately funded or provided through the National Disability Insurance Scheme, and is not more appropriately funded or provided through other general systems of service delivery or support services offered by a person, agency or body, or systems of service delivery or support services offered;

(i) as part of a universal service obligation; or

(ii) in accordance with reasonable adjustments required under a law dealing with discrimination on the basis of disability.[12]

The Tribunal has been asked to consider what is reasonable and necessary in the context of those living with a disability.  In a recent case of XXYC by his mother and National Disability Insurance Agency[13] the Tribunal confirmed that:


The NDIS is not simply subject to legislative requirements as is a private health insurer but in the creation of statute.  Although styled as an insurance scheme, the NDIS has some features that take it outside the boundaries of insurance.  The benefit that is payable, for example, is not defined in absolute terms. It is, instead, determined by reference to the support that the CEO is satisfied is the reasonable and necessary support in each individual case or that is a general support that will be funded by the agency.  That means that each benefit is tailored for each individual participant.  It is a bespoke benefit.


When regard is had to all of the matters, to which the CEO must have regard under s34, in approving the supports that will be provided to a participant as well as those matters, which s33 requires the CEO to have regard in deciding whether to approve a participants plan in the context of the objects of the NDIS Act set out in s3, the principles that must guide actions of people doing acts or things on behalf of others and the need to maintain stability, it becomes clear that the plan, including its statement of participant supports that is approved, is unlikely to meet every participants every wish.  The NDIS Act itself recognises that it is unlikely to do so for s34 itself requires consideration to be given to whether a support is most appropriately funded or provided through NDIS or more appropriately funded or provided through other services offered as part of a universal service obligation or in accordance with reasonable adjustments required under a law dealing with discrimination.  The CEO must also take account of what is reasonable to expect families, carers, informal networks and the community to provide.[14]

In this case the Tribunal was asked to consider whether early childhood intervention supports that were identified as capacity building supports and other supports to assist with the activities of daily living were reasonable and necessary for the Applicant who is living with autism.  The Tribunal ultimately decided to vary the initial funding of approximately $40,000 in favour of a plan that delivered funding in the amount of approximately $113,000 in order to assist with the early childhood supports that were sought by the Applicant.

As with the cases involving eligibility criteria, the Tribunal is concerned with considering cases on a case by case basis.  For example, in McKenzie and National Disability Insurance Agency,[15] a case advanced before the Tribunal in 2019, the Applicant, suffering with multiple sclerosis, sought to have ducted air conditioning installed in his home.

Initially the NDIA refused this aid on the basis they did not consider it reasonable and necessary.  Importantly the Applicant already had an old air conditioning system that stopped working and was too expensive to repair and therefore replacement was recommended.  The Tribunal took into account expert evidence that accepted that people with multiple sclerosis experienced temporary worsening of symptoms when their core body temperature rises.  Interestingly, in finding that the replacement of an air conditioning system was reasonable and necessary the ongoing repairs and maintenance would not be and therefore the NDIS would generally not fund the ongoing repairs and maintenance of the air conditioning unit even though it is reasonable and necessary to replace an existing one that had stopped working.[16]

In a more general sense, in McGarrigle v National Disability Insurance Agency[17] the Federal Court, in considering reasonable and necessary supports within the context of Section 34 of the Act said that:

Whether a support is reasonable requires a different assessment to whether a support is necessary.  Again, it is not necessary in the context of this proceeding to be definitive about the nature and extent of the meaning of the phrase, or its components.  It is enough to observe that using the concept of necessity would appear to tie one aspect of the CEOs assessment to an evaluation of the kinds of factors set out in S34(1)(a) and (b) and (d).

In other words, a reasonable construction of the Act needs to be undertaken by any decision maker in determining what is reasonable and necessary.  For example, in considering whether something is reasonable, a decision maker would have to take into account that the support represents a value for money in that the costs of the support are reasonable, relative to both the benefits achieved and the cost of alternative support.[18]

Furthermore, in considering what is reasonable and necessary it is important to consider whether or not a particular expense arises as a result of a person’s disability.  In a recent decision before the Tribunal a review was sought following the refusal by the NDIA to fund an Applicant’s legal practising certificate as a reasonable and necessary support within the meaning of the Act.  The argument advanced was that the funding of a practicing certificate allowed the Applicant the ability to engage in employment.  The Tribunal commented as follows:

[43] I accept the proposition put by Mr Johnston that it is an objective of the scheme to have people with a disability in employment.  However, it does not follow that the scheme is intended to fund all costs associated with a participants employment.  If Mr Johnstons argument is correct, the scheme would be required to fund many of the fees associated with professional bodies and trade associations when those wishing to engage in work are participants in the scheme.  Such supports would neither be reasonable nor necessary if the fees were not related to the persons disabilities.

[44] I acknowledge that Mr Johnstons disabilities are of such significance that there is nothing in his life on which they do not impact.  However, it does not follow that all expenses he may incur in pursuing his chosen career and thereby earning an income, are related to those disabilities.  The words used in the Act limit the expenses which can be funded under the scheme.[19]

When considering applications to the Tribunal to consider reasonable and necessary expenses it is important to note that if a decision is made by a participant and/or their family to go ahead with the cost of supports that are not funded while awaiting the appeal outcome, the Tribunal does not have jurisdiction to consider whether the parents or the participant can be reimbursed, even if the support is ultimately found to be reasonable and necessary.  Interestingly the Tribunal has found that decisions about payments that have been made are not specified as reviewable decisions that it can consider within the meaning of Section 99 of the Act.  Because decisions about payments are not reviewable, the Tribunal has determined that it has no power to order that any amount of any expenditure that has been paid over and above supports already granted can be reimbursed.  It has however clarified that the NDIA itself does have the power to reimburse parents or participants if they decide they want to.[20] This is clearly a deficiency in the Act and one that would almost certainly lead to participants and their families being out of pocket even in circumstances where a decision by the NDIA is overturned.

Another important factor to be aware of when considering reasonable and necessary supports is that the NDIS is not required to fund things that can be reasonably funded by the health system.  However, this has recently been clarified in a case of Burchell and National Disability Insurance Agency[21] brought by a participant who, as a result of physical and mental disabilities, had difficulty swallowing.  The Applicant’s dietician had formulated an eating plan that included food supplements that were not available to him through the health system. After it was submitted to the NDIA it was requested that it be reviewed in favour of a less expensive plan.  Following the submission of a less expensive plan that included the same food supplements, the NDIA rejected both and indicated that it was more appropriately provided through the health system.

In this decision, the Tribunal considered earlier decisions of the Tribunal that found that where health services can fund the relevant support, it is not the responsibility of the NDIS.[22]  However, this decision departed from this line of authority and instead indicated quite clearly that the health system did not actually fund the support sought by the Applicant who was forced to use cheaper substitutes than the plan that was designed for him which subsequently lead to health problems.  In short, the Tribunal found that it was reasonable and necessary to grant the eating plan along with food supplements because it was not adequately provided to him by the health care system.  Interestingly, consideration was given to the Productivity Commissions report which formed part of the basis of the creation of the NDIS and which also dealt with the question of directing participants to the main stream public health system as opposed to the NDIS wherever possible.

Whilst this Applicant was successful in his challenge and received the support that he was seeking, this case does illustrate the issue that arises on the question of funding when the NDIS is funded by the Commonwealth Government and the health care systems are funded by the State Government.  In the writer’s view this vests a very real conflict of interest in that it is in the interests of the NDIS to try and re-direct participants to a State funded scheme as opposed to a Commonwealth one which, in some cases, may not be sufficient to meet a participants needs.  In these circumstances it is very likely that the type of argument run by the NDIA in this case will not be the last time it is advanced; particularly in light of the number of cases previously advanced that do confirm that health scheme funded supports would not be funded by the NDIS.[23]

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