TAXPAYERS' money will be protected from fraudulent claims under the National Disability Insurance Scheme, the federal government has said.
The federal Department of Families, Housing, Community Services and Indigenous Affairs said it would have controls in place to prevent and detect fraud when the sector moves to roll out its fee-for-service model from July 1, which begins with the Hunter.
Controls will include audits and random checks to examine whether or not money is being spent appropriately.
There will also be a contact email and phone number for people to report fraudulent or unethical behaviour.
The Hunter is to be one of four trial sites in the country for the change to client-centred disability funding.
The federal government plans to pay for the scheme with a 0.5 per cent hike to the Medicare Levy.
Under the change, people with a disability will write an individualised care plan with DisabilityCare Australia, which will decide funding allocations.
Clients can choose to manage some or all of their allocated money themselves, elect a third party, or have DisabilityCare manage their funds. Self-managing clients will have a monthly part-payment paid into their bank account.
Those clients will then spend the money, advise the agency how they spent it and DisabilityCare will pay a balance to meet the agreed monthly funding level.
Rob Watkins, who is managing the launch in NSW, told a meeting last week that DisabilityCare had set up a maximum price for services to ensure there was no price gouging and price escalation to keep the scheme sustainable.
"In time [the price cap] will be pulled away because competitive forces in the market will dictate the price," he said.
There are also restrictions in place to prevent people moving to the Hunter to take advantage of the scheme.
People can only come into the scheme if they move to the area for work, education or exceptional circumstances.
Disability Reform Minister Jenny Macklin said DisabilityCare would give people with disability more choice and control over the care and support they received.
"It's also a permanent change, so it needs to be implemented in a sustainable and sensible way," she said.