The shocking extent of fraud in the National Disability Insurance Scheme (NDIS) has been laid bare with accusations of coercion, criminal gangs and more than $3.5 billion of tainted funds.
A parliamentary inquiry investigating how widespread fraud is within the NDIS has found that an estimated 8 per cent of the $45 billion scheme has been tainted by fraud.
"It is clear that the NDIS has become a soft target for crooks," NDIS Minister Jenny McAllister said.
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"If you think it is acceptable to prey on people with disabilities, you do not belong in the NDIS. You belong in prison, and we are coming for you."
The NDIS works by pairing a person with a disability with one of the 1400 plan managers, who provides them with the support that they need.
The scheme is government funded and is designed to support about 410,000 people.
Of the smallest 1000 plan managers, the inquiry has uncovered that 90 per cent have traces of fraud within their activity.
"We've seen evidence from our intelligence of them targeting those who [have] particular physical and cognitive disabilities," Australian Criminal Intelligence Commission executive Adam Meyer said.
It is alleged that some work within criminal gangs, whilst others operate in South America and parts of Asia, such as the south-east and the Middle East.
John Dardo from the Fraud Fusion Taskforce said cartels from across the world are "targeting Australia".
"Collusion is probably the best way to describe it."
"It is a coercive sort of arrangement," he added.
"That's at one end of the spectrum that is really taking advantage of very, very vulnerable people."
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One NDIS participant was legitimately charged more than $2300 for a major house clean, only to be billed three times more over the next month and a half, losing almost $7000.
Jim's Cleaning apologised, repaid the money, sacked the contractor responsible, and introduced safeguards to avoid a repeat.
No charges were laid.
The parliamentary committee also heard some NDIS participants had allegedly come out of prison and been placed in boarding houses where their NDIS packages were "harvested."
The government has responded by taking a knife to NDIS spending in next month's budget.
The parliamentary inquiry comes following Health Minister Mark Butler's announcement of the overhaul designed to save the government $35 billion.
Butler aims to cut the average annual plan spend by about $5000, down from $31,000 to around $26,000.
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