De-bunking the myths around debt raising and the NDIS

Please, there is no need to panic!

There's been a lot of buzz in the media about the NDIA’s new ability to raise debts with participants and providers. We know this is causing anxiety for participants and their families, but we’re here to help you understand what these changes really mean. Let’s break down the updates to the NDIS legislation and clear up any confusion.

“Honest mistakes” are not punished

First and foremost, “honest mistakes” will NOT be punished by the NDIA. These changes are not designed to "catch participants out," but rather to prevent deliberate misuse of NDIS funds. The new rules around what you can and can’t spend NDIS funding on came with little warning, and the NDIA knows it will take time for everyone to adjust. If a participant makes a mistake while getting used to the new rules, they won't be punished right away.

What to expect over the next 12 months

The next 12 months are a transition period to help participants get familiar with what’s now allowed and not allowed with NDIS funding. During this time, the NDIA will focus on providing support, education, and guidance—rather than immediately raising debts when mistakes happen.

If a participant accidentally spends their funding on something that’s not allowed, the NDIA will not raise a debt if:

• It’s the first or second time making a mistake (they’ll provide support and guidance each time).

• The purchase is under $1,500.

However, a debt might be raised if:

• The purchase is over $1,500.

• The participant has already been warned twice about spending on non-NDIS supports.

What if a purchase over $1,500 is on the “out” list?

If a participant buys something that’s on the "out" list and it costs more than $1,500, the transition rule doesn't apply, and a debt will be raised.

But it’s important to know that these debts can be waived in certain cases. If a participant unintentionally or unknowingly breaks the rules, the NDIA can consider their circumstances before deciding whether to recover the debt. This is done according to Commonwealth policy, with a focus on fairness.

NDIA is focused on deliberate wrongdoing

The NDIA is looking out for participants or providers who knowingly and deliberately misuse NDIS funding. If a participant repeatedly makes incorrect claims or engages in fraud, the NDIA may take further action. This could include moving a participant to NDIA-managed funding or raising a debt. For participants doing the right thing, there’s no need to worry.

Important NDIA responsibilities

The NDIA must contact participants twice before raising a debt under $1,500 to explain what is and isn't an NDIS support. The only exception is if a participant uses their funding to purchase illegal items, which has never been allowed under the NDIS.

Are these decisions reviewable?

Yes, participants can ask for a review if:

• The NDIA refuses to waive a debt.

• The NDIA decides not to write off a debt.

• The NDIA changes how a participant’s plan is managed.

However, the decision to raise a debt itself or to pause a payment is not reviewable.

What is the “Safety Net”?

The NDIA has set up a safety net for participants. If the NDIA ever decides to pursue a debt, the NDIA CEO must personally sign off on that decision. This ensures that raising a debt is a last resort and that every case is carefully considered at the highest level.

How we can help as your Plan Manager

We’re here to support you through these changes. Everyone—participants and providers alike—is adjusting to the new rules about what can be purchased with NDIS funding. Our role is to help you avoid spending on items that might be rejected, saving you from being out of pocket.

We’re available to help you navigate questions about what’s allowed, what’s not, and what might be a grey area. If you’re unsure whether a purchase is allowed, always reach out before you commit, we’ll work with you to get the right answers.

Who to contact

If you’re not sure whether something can be bought with your NDIS funding, your best point of contact is your “my NDIS Contact”—this could be your Local Area Coordinator, Early Childhood Partner, or NDIA Planner. Their contact details should be listed on your plan. If you don’t have their details, call 1800 800 110 to get connected. We can help guide you but ultimately your "my NDIS Contact" has the final say, as to what you can and can not purchase with your funding. 

Helpful links

Email from the NDIA  

FAQs on the new legislation    

Changes to legislation   

Being Non-compliant    

Contact the NDIS