NDIS Fraud: $5 Billion stolen from the disabled – and the “Crackdown” is still just window dressing

Last month in Melbourne, Kim Michael Schubert was sentenced to three years’ jail (with nine months to serve) for abusing his job at a disability employment service for stealing nearly $200,000 from 90 vulnerable NDIS participants. The court ordered him to repay $40,000. Another co-offender got off with a good behaviour bond. Good news, right? Justice finally served. 

Except NDIS integrity chief John Dardo told Senate Estimates in February that up to 10% of the entire scheme is “inappropriate, made in mischief or outright criminal” — costing taxpayers up to $5 billion a year. This financial year the NDIS is forecast to cost $50.7 billion (revised down from $52 billion). So while one small-time crook gets locked up, billions are still vanishing into thin air. 

That’s not a crackdown. That’s a national disgrace. 

The Albanese Government loves to trumpet its Fraud Fusion Taskforce, launched in 2022 with hundreds of millions in extra funding. And yes, they’ve notched up some wins. As of this month they’ve recorded their 24th successful NDIS fraud conviction since the Taskforce began — double the previous rate. Currently there are 660 investigations running, they have referred 59 people to court, disrupted more than 2500 dodgy providers, and blocked $86 million in suspicious claims before they were paid out. Search warrants are up tenfold. Just last week they executed more raids in Sydney over an alleged $3.5 million fraud, and a Darwin public servant was charged over $5 million in suspicious claims he allegedly funnelled through his own side business. 

Minister Jenny McAllister’s office puts out glowing press releases every time someone gets a few months behind bars: “We will find you and throw the book at you”. 

Spare us. 

With more than 7000 fraud tip-offs flooding in every quarter (by the Taskforce’s own earlier admissions), 24 convictions and a handful of jail terms represent a pathetic return. Up to 99% of allegations appear to go nowhere. Proving criminal intent in court is “tough”, Dardo admits — which is exactly why prevention should have been the priority years ago. Instead, the scheme ran for a decade with “no basic prevention controls”, as multiple audits have found. Criminal gangs, insiders and even some participants themselves are treating the NDIS like an ATM. 

New scams are emerging daily. Participants are now openly auctioning their taxpayer-funded plans for cash kickbacks — one recently demanded $50,000 from a provider just to sign up. Providers are billing for fake services, laundering cash and targeting non-English speakers and people in prison who can’t fight back. Every dollar stolen is one less for a genuine Queenslander waiting for therapy, equipment or daily living supports in Brisbane, the Gold Coast or regional towns. 

Taxpayers have already shelled out more than half a billion dollars on this Taskforce and related integrity measures. Yet the $5 billion black hole persists. The scheme has blown out from an original $14 billion projection to $50 billion-plus because governments — federal and state — let it run wild while closing other disability services and leaving the NDIS as the only game in town. Now, they’re scrambling with plan cuts, tighter eligibility and media releases about a few jailed fraudsters. 

Meanwhile, honest participants and ethical providers are the ones paying the price: more red tape, squeezed budgets and eroded public trust. The vulnerable people the scheme was meant to help are being preyed upon by the very system designed to protect them. 

The government says operations are “getting stronger every day” and more prosecutions are coming. Fine - but until the leakage stops at the source — until eligibility is properly policed, self-managed plans are audited in real time and criminal gangs are dismantled instead of just raided once a year — this is all theatre. 

Australian taxpayers and people with genuine disabilities deserve better than a $50 billion scheme that leaks $5 billion a year while the authorities pat themselves on the back for catching the occasional small fish. 

It’s not a crackdown. It’s barely a speed bump. And the meter is still running — at our expense. 

Happy days 

Chameleon