Disability Support Network Faces Financial Collapse
Australia's not-for-profit disability sector has plunged into what industry leaders describe as active market failure, with essential service providers being forced to close their doors due to unsustainable financial pressures. The alarming assessment comes from the Ability Roundtable, a platform supporting registered NDIS providers, which warns the sector isn't approaching crisis but has already reached it.
Providers Bleeding Millions Amid Price Freeze
Martin Laverty, former architect of the National Disability Insurance Scheme and current CEO of disability provider Aruma, issued a stark warning about the consequences of untenably low price caps for NDIS services. "For some years, many of us in the sector have been telling the National Disability Insurance Agency that flaws in their pricing are contributing to not-for-profit registered providers of disability services going broke," Laverty stated.
The crisis is quantified in devastating figures released by Ability Roundtable, showing registered not-for-profit providers sustained a median operating loss of nearly 4% in the last financial year alone. This follows four consecutive years of 2% losses, creating a five-year deficit totalling approximately 12% in losses.
"No one will turn up to work every day only to lose 4% of their income," Laverty emphasised. "Not-for-profits are not involved in the disability sector for the sake of money, but making breakeven is essential for our services to be sustained into the future."
Exodus of Essential Services and Emergency Bailouts
The financial strain has triggered an exodus of providers from the NDIS, with several major organisations including Centacare Brisbane, Anglicare WA, Momentum Collective, MS Society SA and Annecto all exiting the scheme in recent months. The report revealed providers have on average just three weeks of operating cash remaining, leaving them dangerously exposed.
Garry Simpson, Chief Operating Officer of Ability Roundtable, delivered the grim verdict: "Our assessment suggests the not-for-profit disability sector is not close to market failure, it's in failure right now."
Some larger providers have required government intervention to survive, such as Bedford which received $38 million in federal and South Australian government bailouts. While Laverty described Bedford as "too big to fail" and supported the rescue package, he criticised this approach as "an ambulance at bottom of cliff strategy." Instead, he advocates preventing registered not-for-profits from reaching the financial brink in the first place.
Frozen Rates and Planned Cuts Worsen Crisis
The catastrophic financial situation stems from a six-year freeze on the hourly rate the NDIA pays for support and therapies, compounded by announced cuts to therapy prices from June 2025. Simpson highlighted the absurdity of the pricing structure: "There's not been one increase in therapy for six years… not even CPI increases to therapy prices. And that's only going to get worse in 2025-26 with the actual reduction in price."
In response to the growing crisis, Simpson and Laverty have called for the NDIA to introduce a two-tiered hourly rate that would pay registered NDIS providers a higher rate. Currently, only 6% of NDIS service providers are registered, creating what Laverty describes as a fundamental imbalance.
"The NDIA needed to urgently correct the NDIS price formula to shift incentives away from the 94% of providers to stabilise the registered not-for-profits who are doing the majority of the more complex NDIS work for participants who need it," Laverty argued.
An NDIS spokesperson defended the current pricing approach, stating: "NDIS price limits are set with the aim of striking a balance between maintaining a strong market of diverse, high-quality providers and ensuring participants get value for money when using their plans." The spokesperson added that the agency assesses price limits annually to support both participant outcomes and provider sustainability.
However, with providers continuing to exit and financial losses mounting, the sector warns that without immediate intervention, the very foundation of disability support in Australia risks complete collapse.
