The National Disability Insurance Scheme (NDIS) has become one of the most debated government programs in Australia. Media coverage has focused heavily on fraud, rising costs and questionable providers, but that discussion can sometimes overlook the businesses and people working within the sector.

In this episode of The Account Rant, Latitude Accountants’ Jacob Fahmy sat down with Rachel Carey, an experienced NDIS business operator with around 20 years in the disability sector. Their conversation explored the reality of operating an NDIS business, the financial pressures facing legitimate providers, public perceptions of the industry, and what meaningful reform could look like.

Rachel’s perspective offers an inside look at an industry facing significant scrutiny while trying to provide essential services to Australians living with disability.

Why the NDIS Has Become So Controversial

Few areas of Australian public policy have attracted as much attention as the NDIS.

Stories about fraud and inappropriate spending have contributed to a perception that NDIS providers are broadly benefiting from government funding. Rachel argues that this perception does not reflect the experience of many legitimate providers.

She acknowledges that fraud exists within the sector and believes it needs to be addressed. However, she also points out that questionable operators represent only part of the industry.

According to Rachel, many providers are genuine businesses trying to deliver quality services while operating under a challenging funding model.

This distinction matters for business owners. A sector can have legitimate compliance and fraud concerns without every business operating within it being treated as suspicious.

The Impact of Media Coverage

Media attention can play an important role in exposing poor practices. At the same time, repeated coverage of fraud and excessive spending can influence public perception of an entire industry.

For legitimate NDIS businesses, this can create additional pressure around reputation, compliance and trust.

The challenge is finding a balance: bad operators need to be identified and held accountable, while legitimate providers should still be able to operate sustainably and focus on their clients.

The Financial Reality for NDIS Providers

One of the most striking parts of the conversation was the discussion around NDIS profit margins.

Rachel explained that the NDIS funding model is price-capped and based on government assumptions about the costs involved in delivering services. She argues that some of those assumptions do not accurately reflect the actual costs faced by providers.

According to Rachel, the model assumes providers can operate sustainably with a 2% net profit margin.

From a business perspective, that leaves very little room for unexpected costs, inflation, wage increases, compliance expenses or investment in better systems and staff.

As Jacob points out during the conversation, even businesses known for relatively low margins can operate on higher margins than this.

Why Small Margins Create Big Problems

A low-margin business is particularly vulnerable to cost increases.

For an NDIS provider, expenses can include:

• Employee wages and related employment costs
• Workers’ compensation
• Insurance
• Training and compliance
• Administrative and operational costs
• Technology and systems
• Quality and safety requirements
• Recruitment and staff retention
• Professional and advisory fees

If revenue is subject to price caps while operating costs continue to rise, the business has limited ability to simply increase prices to protect its margin.

Rachel also stated that, based on industry data discussed in the episode, many NDIS providers have experienced losses and a significant number have closed their doors.

For business owners, the broader lesson is important: revenue growth does not necessarily mean a business is financially healthy.

Understanding gross margins, operating costs, cash flow and net profit is essential in any regulated or price-controlled industry.

Registered vs Unregistered NDIS Providers

Another major issue discussed was the difference between registered and unregistered providers.

Rachel explained that the NDIS includes both registered and unregistered providers, with registered providers subject to additional regulatory and audit requirements. She argued that this can create an uneven playing field when businesses providing similar services face different compliance obligations.

This raises an important business question:

How can providers compete effectively when their compliance requirements and operating costs differ?

For businesses operating in regulated industries, compliance is not simply an administrative task. It can directly affect staffing, pricing, profitability and business planning.

What Is SIL?

The discussion also covered Supported Independent Living (SIL).

SIL involves support for people with higher or more complex needs, often involving 24-hour support in a residential setting. Rachel described it as a high-risk service area requiring strong standards and safeguards.

The transcript notes that, from 1 July 2026, SIL providers were required to be registered.

For providers, regulatory changes such as this can have a significant effect on business operations and should be incorporated into compliance planning and financial forecasts.

NDIS Registration Can Be a Complex Process

For entrepreneurs considering entering the NDIS sector, registration is another major consideration.

Rachel explained that NDIS consultants can assist new providers with several aspects of registration, including:

• Developing policies and procedures
• Preparing documentation
• Submitting registration applications
• Preparing for audits
• Supporting providers through compliance requirements

She explained that the initial process can involve a desktop audit, followed by provisional registration and a later midterm audit after the provider begins working with clients.

For someone entering the industry for the first time, professional assistance may help reduce the risk of missing important compliance requirements.

However, registration is only one part of running a sustainable NDIS business. Business owners also need to understand their numbers, manage cash flow and ensure the business model can support its ongoing costs.

What Could NDIS Reform Mean for Businesses?

NDIS reform has created uncertainty for both participants and providers.

According to Rachel, providers regularly wait for changes to pricing, practice standards and other requirements, particularly around 1 July each year.

The conversation also questioned whether reform should focus only on individual problems or whether the broader architecture of the scheme needs to be reconsidered.

Rachel’s position is that meaningful reform should consider how the system works as a whole, including the experience of participants, providers and government agencies.

Sustainability Should Be About More Than Cutting Costs

A recurring theme throughout the conversation was sustainability.

Rachel believes the NDIS can be sustainable, but argues that its structure needs improvement. She remains strongly supportive of the scheme and describes it as an important system for Australians living with disability.

This is an important distinction.

Making a government-funded system sustainable does not necessarily mean simply reducing spending. It can also mean improving processes, reducing waste, strengthening safeguards, ensuring appropriate funding and creating better incentives for providers.

Why Business Owners Need to Watch Their Numbers

For NDIS providers and other businesses operating in regulated environments, financial management becomes particularly important.

When pricing is constrained, business owners have less control over revenue. That makes cost management, forecasting and profitability even more important.

A provider should understand:

• Revenue by service
• Direct labour costs
• Gross profit margins
• Overhead expenses
• Net profit
• Cash flow
• Debtor and creditor positions
• Compliance costs
• Staffing costs
• Tax obligations
• Available cash reserves

A business can appear busy and generate substantial revenue while still struggling financially.

Regular financial reporting can help business owners identify problems before they become crises.

The Bigger Conversation: Trust, Regulation and Sustainability

The NDIS conversation is ultimately about more than money.

It is about trust between participants, providers, taxpayers and government.

Fraud and poor practices need to be addressed. At the same time, legitimate businesses need a framework that allows them to provide quality services and remain financially sustainable.

Rachel’s final position is that poor operators should not be allowed to damage the sector’s reputation. She also argues that stronger governance and better oversight could help address fraudulent activity.

For business owners, the takeaway is straightforward: operating in a heavily regulated industry requires more than delivering a good service. It requires strong systems, compliance, financial discipline and an understanding of how changes in government policy can affect the business.

The NDIS will likely continue to evolve. For providers, staying informed and keeping a close eye on the numbers will be essential.

Frequently Asked Questions About NDIS Businesses and Reform

Is the NDIS sustainable?

According to Rachel Carey, the NDIS can be sustainable, but she believes the scheme’s structure needs improvement. She argues that reform should create a system that works better for both participants and legitimate providers.

Why are NDIS businesses facing financial pressure?

The discussion highlights price caps, rising operating costs, compliance requirements and limited pricing flexibility as challenges for providers. Rachel also discussed the difficulty of operating under a funding model that she believes does not always reflect the actual costs of delivering services.

What is the difference between registered and unregistered NDIS providers?

Registered providers are subject to specific regulatory and audit requirements. The conversation discusses concerns about differences in compliance obligations between registered and unregistered providers and the impact this can have on competition within the sector.

What is Supported Independent Living (SIL)?

Supported Independent Living, or SIL, provides support to people with higher or more complex needs and can involve 24-hour support in a residential setting. The conversation also discusses the increased registration requirements applying to SIL providers.

Why does NDIS registration take so long?

Rachel attributes some registration delays to resourcing and backlogs within the relevant regulatory system. The discussion notes that providers can experience lengthy waits for registration and other changes to their registration.

Should NDIS providers use a consultant when registering?

Rachel believes consultants can be particularly useful for new providers. According to the discussion, consultants may help prepare policies and procedures, submit applications and support providers through their initial audit and compliance requirements.

Are NDIS providers profitable?

Profitability can vary between providers, but the discussion highlights significant financial challenges within the sector. Rachel stated that the funding model assumes a 2% net profit margin and discussed industry data indicating that many providers have experienced losses.

Are fraud and poor practices a problem within the NDIS?

Yes. Rachel acknowledges that fraud and poor practices exist within the sector and argues that they need to be addressed. At the same time, she believes legitimate providers should not be judged solely by the actions of poor operators.

What could improve NDIS reform?

The conversation argues for a broader review of how the NDIS is structured, including funding, regulation, provider requirements and participant access. Rachel also emphasises the importance of consulting participants and providers when making significant changes to the scheme.

How can an accountant help an NDIS business?

An accountant can help an NDIS business monitor profitability, manage cash flow, understand operating costs, prepare financial reports, manage tax obligations and assess whether the business model is financially sustainable. For providers operating under pricing and regulatory constraints, understanding the numbers is particularly important.

Need Help Understanding Your Business Numbers?

Running an NDIS business comes with unique financial and operational challenges. Whether you’re starting a business, growing an existing provider, or trying to understand why your margins are under pressure, having the right financial information can make better decision-making easier.

Latitude Accountants works with Australian business owners to provide practical accounting, taxation and business advisory support.

Get in touch with Latitude Accountants:

📍 Sydney Olympic Park | Marrickville | Melbourne | Loxton
📞 1300 706 597
📧 info@latitudeaccountants.com.au

Book a free business discovery call and speak with the Latitude Accountants team about your business needs.

Disclaimer

This article is based on the discussion featured in The Account Rant with Jacob Fahmy and Rachel Carey and is provided for general informational purposes only. Statements attributed to Rachel Carey reflect her views expressed during the conversation and should not be taken as independent verification of NDIS policy, funding figures, regulatory requirements or industry statistics.

This content does not constitute financial, accounting, legal, tax or NDIS advice. NDIS providers and participants should seek advice from appropriately qualified professionals about their individual circumstances and current requirements.