Supreme Court decision highlights uncertainty in NDIS funding

The case: Sharp v Home Care Service of NSW [2018] NSWSC 1319

Sharp v Home Care Service of NSW concerned the approval of a proposed settlement relating to a 25-year-old woman, Tegan Sharp, who was scalded and suffered burns whilst being showered by a carer employed by Home Care Service of NSW.

Ms Sharp was born with cerebral palsy and suffered from lifelong physical and mental disabilities, including blindness and deafness. As a result, Ms Sharp required home care and assistance with funding provided by the NDIS. After the shower incident in October 2012, Ms Sharp claimed she had and would require 'additional care of a gratuitous nature', provided by her immediate family, including her parents.

Ms Sharp, through her litigation guardian, and Home Care Services of NSW reached agreement on the settlement and an application was made to the Court for approval of the settlement.

Claim by the NDIA

In considering its approval of the settlement, the Supreme Court took into account the fact that the National Disability Insurance Agency (NDIA) had served a notice on Ms Sharp requiring repayment of funds that she had received under the NDIS from her settlement payment. The NDIA provided various estimated amounts, ranging between $30,000 and $136,000, for what it considered to be the payback owing to it.

In respect of the claim by the NDIA, the Court noted that any compensation awarded to Ms Sharp was not for an 'impairment' that the NDIS had previously provided financial support for. The Court considered that the care claimed related to emotional distress and the need for parental presence and support when being showered, due to Ms Sharp's fears associated with this daily task. Further, at [34], the Court noted that:

The parents and family of the plaintiff providing gratuitous care can never fit the description of “reasonable and necessary supports funded under the NDIS” and therefore, the sum said to be referable to past payments due to be repaid to the NDIA and any claim for future gratuitous supports provided by the parents and family are unfounded.

The settlement was ultimately approved, but the Court also noted that the gratuitous care provided by Ms Sharp's family members fitted the description of "general support", as described by s 33(2) of the National Disability of the Insurance Scheme Act 2013, and as such was not included in NDIS funding and should be excluded from payback. Further, the Court considered that persons with a disability should be able to rely on unfunded, informal supports provided by parents and families in addition to the support funded by the NDIS.

Uncertainty for funding participants in the scheme

Although the Court emphasised that the NDIS, in this instance, did not support a claim by the NDIA and that it should exercise discretion to pursue such repayments, the decision highlights the unexplained and increasing uncertainty as to how much funding participants may be required to pay back to the NDIA following a compensation settlement.

The proceeding further highlights the difficulties the Court faces in considering whether to approve settlement amounts when the NDIA 'refuses to appropriately consider and determine the proper legislatively-sanctioned payback due to it in the circumstances'.