The NDIS is a universal scheme that is not subject to income or asset tests. In order to prioritise claims for support and to allocate resources the NDIS uses a principle of ‘reasonable and necessary’ to determine what will be funded.

The aim of the NDIS Independent Review is to assess the NDIS for opportunities to improve the experience of participants and ensure that the scheme is sustainable. As of June 2023, the Review has identified five major challenges, one of which is resolving the planning and funding problems that the poor definition of ‘reasonable and necessary’ creates for the purposes of defining supports.

The Review has found that it is difficult for NDIA decision-makers to be consistent across a range of participants, disabilities, and circumstances. Participants are confused, feel decisions are not transparent and believe the planning process creates inequities. There is also insufficient guidance for clinical professionals on providing evidence as part of considering what is reasonable and necessary for the participant and it is not clear why their views are not always considered. The combined result of these factors is that cases relating to the interpretation of reasonable and necessary continue to create demand at the Administrative Appeals Tribunal.

As a next step in the review, the NDIS review is calling for ideas about:

1) how reasonable and necessary could be more clearly defined for participants and the National Disability Insurance Agency (NDIA) and

2) what processes could support practice and implementation of the principle of reasonable and necessary so that decisions are consistent and fair and there is certainty about future funding.