Government vows crackdown on sale of NDIS shell companies

Jenny McAllister says the sale of shell companies online creates risks for participants. (ABC News: Mary Lloyd) The federal government says it will impose new obligations around the sale of NDIS businesses, aimed at cracking down on the trading of cleanskin registered companies. Social media has been flooded with advertisements for companies and compliance consultants selling expensive polices and "guaranteed" registration success. It comes amid a government push to ensure more NDIS providers are registered with the scheme watchdog. Link copiedShareShare articleThe federal government is moving to crack down on the growing trade in "off-the-shelf" National Disability Insurance Scheme (NDIS) providers, announcing tougher rules to stop pre-registered shell companies being sold to bypass scrutiny. From July 1, new obligations will require disability service providers to notify the NDIS watchdog, the Quality and Safeguards Commission (QSC), as soon as a sale is likely, with mandatory re-audits triggered if ownership changes significantly alters how the business is run. The high demand for NDIS services and complexity of becoming fully complaint with new provider registration rules have created a market for shortcuts, with some operators looking to buy pre-approved companies rather than go through the full registration and audit process. Online sellers are capitalising on this, with NDIS Facebook groups, Facebook Marketplace and Gumtree currently flooded with advertisements for companies and compliance consultants selling polices and "guaranteed" audit success for thousands of dollars. In some cases, the businesses for sale have been marketed as a way for people to bypass the usual six to 12-month registration process by purchasing a fully compliant, ready-to-operate company. Advertisements for "registered" NDIS businesses have proliferated across websites such as Gumtree. (Supplied) Do you have information about the use and sale of NDIS off-the-shelf companies? Contact us using this form. These include companies pitched to investors as "turnkey" businesses and a way to enter the disability sector instantly by buying a company "already fully compliant". The ABC has seen some cases where businesses have been advertised for as much as $120,000. Businesses are being advertised for as much as $120,000 on social media. (ABC News: Michelle McNamara) NDIS Minister Jenny McAllister said the government's move was aimed at eliminating a loophole that created risks to participants. "We do see circumstances where pre-registered shell companies are offered on the market," she said. "It creates a risk that an unsuitable person is operating a company providing services to people with disability, and we do not want this to continue." Senator McAllister said closing the loophole was essential to maintaining trust in the NDIS. "Our changes will mean that the minute a person with a business knows that a sale is likely to take place, they're required to notify the commission," she said. "And where there are material changes, that company will be required to undergo a new audit and be assessed against the quality standards." The move is part of a broader push to strengthen regulation and ensure the long-term sustainability of the scheme, which now costs more than $50 billion a year. It also comes amid the first wave of mandatory registration requirements for NDIS providers, starting July 1 that covers digital platform and supported independent living (SIL) providers. A bill paving the way for an overhaul of the scheme, currently stuck in the Senate, would see mandatory registration expanded to all "high risk" providers, though little else is known beyond that. The current atmosphere of uncertainty has created what sector insiders describe as a climate of "fear and panic", driving a surge in opportunistic operators. NDIS provider peak body National Disability Services said the emergence of those shell companies posed a serious threat to the integrity of the scheme. Chief executive Michael Perusco said registration requirements were "critical" and existed to protect participants, but that safeguard was being undermined. "We are seeing really worrying situations where people are setting up shell companies and selling them to people so that they can run a NDIS business," he said. "No-one wants that to occur. It shouldn't occur, and it is contributing to harm of participants."

Government vows crackdown on sale of NDIS shell companies

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