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Proposed disability insurance scheme fails the most vulnerable

NDIS Rally in Adelaide, Monday 30th April. Despite the praise of the NDIS, the scheme falls short in some areas. AAP

On paper, the National Disability Insurance Scheme (NDIS) proposed by the Productivity Commission looks like a great idea. Through Commonwealth funding, it would provide specialist accommodation, transport and vehicle modification, personal care and respite care to around 410,000 people with “significant care and support needs”.

These are people with a severe or profound core activity limitation, whose disability was either present at birth, or acquired through an accident or medical condition. This includes psychiatric disability.

One of the objectives of the scheme is to reduce the inequities people with a disability face in accessing services, and to promote certainty and consistency.

But the proposed NDIS in its current form is incomplete. It will arguably make things worse for some people suffering disability, most notably those with a “catastrophic injury”, such as a major brain or spinal cord injury, who are least likely to be able to speak for themselves.

Rather than being covered by the NDIS, this group will instead be hived off to another proposed scheme, the National Injury Insurance Scheme (NIIS). This scheme will be driven by state and territory governments, and modelled on existing no-fault compensation schemes already in place in some jurisdictions.

Although the Productivity Commission’s report criticises the legislative and common law arrangements available for people whose injuries are the result of negligent or criminal activity, it fails to offer any proposals for reform. Instead, it passes the buck to the states.

The proposed NIIS would also only cover certain types of damages relating to medical care. In other words, a catastrophically injured person would still have to sue a solvent, preferably insured, defendant to obtain damages for lost earnings and pain and suffering available under the common law or legislation.

Existing legislative framework

The current compensation system in Australia is unarguably flawed. Suing for negligence is expensive; and a claimant may not be able to sue simply because he or she can’t afford the legal costs (and legal aid isn’t available).

If the injury was caused by someone without insurance, and without financial resources, there is little point in suing them.

With a few “no blame” statutory exceptions, including motor vehicle accident and workers compensation insurance, negligence law in Australia is generally based on an idea of culpability. The negligent party is required to pay damages - either to compensate the person suffering the loss or harm, or because damages punish wrongdoing, and deter others.

Sometimes the only way to claim compensation is to sue, and its not always easy, nor affordable. steakpinball/Flickr

But often, the behaviour causing the harm is unintentional and unavoidable. So many damages awards (financial compensation) appear disproportionate to the blameworthiness of the negligent act, especially if it resulted from a minor lapse in concentration, or some equally human foible, rather than an intention to cause injury or loss.

Insurance also means damages paid against the policy are recovered by way of increased premiums, rather than out of the back pocket of the wrong-doer, which undermines any punitive effect.

Damages assessments require courts to put a monetary figure on intangibles such as pain and suffering, or loss of life-expectancy. They’re also expected to guess what expenses the claimant will incur in future. Judges only have one chance to get it right - if the money runs out before the claimant dies, they can’t be awarded additional damages.

Disability insurance law reform

Although the Productivity Commission’s report highlights these deficiencies with the common law system of compensation, it fails to provide any substantive recommendations regarding law reform.

It describes “how both fault and no-fault arrangements would best fit together” as a “relevant question of policy”, when, in fact, law reform in this area is fundamental to the design of the NIIS, the NDIS and their success in providing lifetime care and support to catastrophically injured people.

Establishing a no-fault insurance scheme offers opportunities to reform negligence law: remove the barriers confronting plaintiffs in the common law system and reduce the social and economic costs of administering justice in this area. But at this stage, the Productivity Commission and Commonwealth government are at risk of bypassing this opportunity.

Rather than offering any real solutions, the Productivity Commission’s proposed NDIS may make the problem worse, by increasing the barriers faced by people seeking access to disability support services.

People suffering a “serious” or “significant” injury will be able to access the Commonwealth-funded and administered NDIS and possibly also common law damages. But their more “catastrophically” injured counterparts will not have access to the NDIS, or potentially, common law damages for medical care. Instead they will rely on an as-yet unrealised state- or territory-based NIIS.

The NDIS is a good start. But unless the complementary NIIS is better rationalised, and accompanied by a broad-based law reform process, the entire policy platform will simply shift the cracks in the current system and prolong the equity faced by the most vulnerable Australians.

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