Does institutional distrust matter? It does when it comes to the NDIS

By Flavio Souza

Monday February 17, 2020

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Distrust of the disability services system is not new. It was a significant driver of change from the previous state-based system to the nationally consistent scheme that the National Disability Insurance Scheme aspires to be. Flavio Souza, Gordon Duff, and David Jonas surveyed 239 eligible NDIS participants and carers about the sources of their distrust of the NDIS and the impact of that on their choices.

Trust is a fundamental component of any economy that involves market exchanges. A growing number of studies show that distrust towards institutions (institutional distrust) drives the need for greater regulation, which may, in turn, hinder market efficiency and economic growth.1

The NDIS’s introduction of market forces to the disability sector exposes it to heightened levels of potential distrust of the institutions involved in the scheme. Namely, the National Disability Insurance Agency (NDIA), responsible for administering the NDIS, the NDIS Quality and Safeguards Commission, responsible for registration of service providers and regulation of matters relating to quality and safeguards, and service providers, from which NDIS participants can choose (whether ‘registered’ or ‘unregistered’) depending on the service type and how their plan is managed (e.g. self-managed).

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The NDIS aims to reap the benefits of market competition by putting choice in the hands of consumers (scheme beneficiaries) and enabling people to select their preferred service providers through personalised plan management arrangements.

However, this ‘new’ market requires the coordination of multiple stakeholders, each representing a potential source of institutional distrust, both for beneficiaries of the scheme and the public at large, who fund the NDIS through their taxes.

For example, scheme recipients are expected to trust the providers’ ability to deliver services that meet mandated quality standards and help them achieve personal goals. Recipients and the public at large expect the government to allocate and administer funding fairly and efficiently as well as free of fraud and corruption.

Why does institutional distrust matter?

Institutional distrust will impact the overall sustainability of the NDIS in a number of ways. Firstly, in relation to the public’s willingness to support the funding of the very large budgetary outlay of this scheme. Here, studies show that higher levels of trust in institutions lead to a more positive attitude toward higher levels of taxes to fund higher government expenditures2 on socially progressive programs.

Secondly, the magnitude, complexity and sensitivity of the NDIS can translate into large-scale disengagement. This is illustrated by another recent large-scale health-related initiative, the My Health Record program3. In 2018-19, the Australian government witnessed more than 2.5 million people opting out of participation despite its long-term personal and societal benefits. In addition to developing legislation and regulatory framework, the My Health Record case illustrates the importance of pursuing and maintaining “a societal seal of approval”, supported by the trust and confidence of patients, citizens, healthcare professionals and researchers.4

Finally, institutional distrust may undermine the effectiveness of NDIS for its participants.

People with higher levels of distrust in the health care system have been shown to avoid health care, are less likely to maintain their continuity of care and are more likely to second-guess health care decisions (at the expense of public coffers). Conversely, lower levels of trust are correlated with lower levels of self-reported health — in turn, a measure highly correlated with having a disability.5

So how does distrust impact the NDIS? Which institutions do people distrust? How does it impact recipients’ management of NDIS packages with regards to budget control options, their choice of providers and their use of individualised funds?

With the support of the University of South Australia, we examined the responses of 239 eligible NDIS participants and nominated carers regarding the sources of institutional distrust and its impact on choices of different support providers.

Sources of distrust in the NDIS

Three distrust measures were developed based on their potential source: the government, service providers in general and people’s main service provider. In the ‘government’ category, we include the NDIA and the NDIS Quality and Safeguards Commission.

Our findings revealed that plan approval boosted trust levels of NDIS participants (from 25.6% v. 55.7%), consistent with international evidence that experiencing a service impacts trust perceptions.6 Interestingly, this plan approval effect was not observed for the carer sample (39% pre- v. post-plan approval).

Cognisant of the general reduction in Australian trust levels,7 we asked our sample to indicate whether they believed that service providers “ensure the delivery of services to the required standards of quality”.

Individuals with higher household income levels who opted to self-manage their NDIS funds were more likely to disagree with this statement compared to those with plans managed by the NDIA or a private plan manager (27.9% v. 21.6%). However, this effect was reversed for respondents with lower income levels: those outsourcing plan management more likely distrusted service providers, compared to NDIS self-managers (41.2% v. 21.2%).

These findings are consistent with economic rationale, where participants employ agents to help bolster advocacy and agency, instead of dealing directly with service providers.

Finally, we also examined how quality indicators impacted choices between service providers.

Our data revealed that men and women relied differently on reviews from other customers, for example. Men were just as likely to use this quality descriptor whether participants or carers, whereas women who were carers were much more likely than participants to resort to the evaluations of other customers (69.2% v. 34.3%).

The effect of distrust on how people spend money

Our analysis revealed that all three potential sources of distrust examined influenced how people spent their NDIS funds, with three distinct profiles identified.

The first group totals 66% of the sample. They generally disagree that providers use NDIS funds appropriately to help them achieve personal goals. They were willing to pay on average $148 more per hour of service (across all service types) for a provider with a 5-star customer review rating compared to a 1-star rated provider

The second group (23%) believes government institutions determine the eligibility and entitlement of participants free from corruption, but that they lack understanding of the costs for standard services. This is the group that most values service provider registration in the NDIS.

Finally, the third group (12% of the sample) tackled distrust by prioritising continuity of service, with some willing to invest more per hour of service (on average $102 across services supported by the Scheme).

Consumers, yet citizens

The NDIS is a significant and complex social and economic policy reform that many commentators have noted for its problematic implementation8.

Successful implementation requires leadership with a focus on long-term societal welfare, educating citizens on the scale of challenges faced,9 and promoting the integrity and fairness of the scheme through, amongst other things, providing transparency and having assurance by trusted independent third parties.

According to the Review of the NDIS Act 2013 (2019)10, the next phase of implementation of the NDIS must build the trust of participants, their families and carers, which can be achieved through greater transparency and effective community engagement.

To our knowledge, our pilot study is the first to empirically examine and quantify how distrust impacts the expenditures of eligible scheme participants and nominated carers.

Our findings highlight the need by all stakeholders, especially government agencies with market stewardship responsibilities, to bolster citizenship engagement through monitoring institutional distrust in the community, and finding effective solutions to address potential sources of distrust.

This challenge requires the development of consumer-centric solutions that harvest the benefits of regarding people as fully-fledged citizens to ensure service improvement, as well as transparent reporting on the integrity and efficiency of the Scheme and service providers.

More generally, our findings give voice to communities across Australia and support the use of innovative approaches to improve policymaking: from the bottom up!


  1. World Economic Forum (2016) The impact of economic distrust
  2. Pitlik, Kouba (2013) Does social distrust always lead to a stronger support for government intervention?
  3. The Guardian (2019) More than 2.5 million people have opted out of My Health Record
  4. Carter, Laurie, Dixon-Woods (2015) The social licence for research: why ran into trouble Journal of medical ethics, v. 41: p. 404-409.
  5. Armstrong, K. et al. (2006) Distrust of the health care system and self-reported health in the United States Journal of General Internal Medicine, v. 21(4), p. 292-297.
  6. Kramer (1999) Trust and distrust in organizations: Emerging perspectives, enduring questions Annual Review of Psychology, v. 50, p. 569-598.
  7. Edelman Trust Barometer (2019) Trust in Healthcare: Global
  8. Carey et al. (2019) How is the disability sector faring?
  9. OECD Forum (2013) The cost of mistrust
  10. Review of the NDIS act 2013 (2019)

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