Updated: Apr 6
Keeping track of your NDIS budget can be the key to financially managing a successful NDIS plan. Budgeting is a vital step in your NDIS plan management as it can indicate to the NDIA how effectively you’re using your funding, if you are overspending or underspending on your budget, and whether you are receiving the right amount of funding that you need. If you don’t manage your budget properly, you can run the risk of overspending and having to pay out of your own pocket for necessary supports, or underspending and having your NDIS budget reduced following your annual plan meeting. Whether you overspend or underspend, it’s important to remember – don’t panic. There are options to help you manage this if either situation occurs.
What to do if you overspend your NDIS budget
For some, it can be all too easy to overspend on your NDIS budget. For participants who have overspent or are coming close to overspending on their budget, you can speak with your Service Provider(s) or contact your Local Area Coordinator (LAC) to discuss potential options with them.
Explaining the situation to your Service Provider(s), can be incredibly helpful for both you and for them. This opens the dialogue to discuss if there are any solutions to ensure your supports can continue uninterrupted, or even to provide the possibility of a cheaper service you could access to reduce the risk of you needing to pay for supports out of your own pocket.
Your Local Area Coordinator is another great point of contact should the risk of overspending occur. Through them, you can request an early review of your NDIS plan, with the potential of increasing your budget. It’s important to be mindful that this option can be quite a lengthy process, and is based on the evidence you provide proving it is both reasonable and necessary for a budget increase. There are no guarantees with this option, so it is best to keep on top of your budget from the start of your NDIS plan.
What to do if you underspend your NDIS budget
The first thing you need to know about underspending on your NDIS budget, is that it doesn’t necessarily mean your funding will be cut following your annual plan review. If you notice you’ve seriously underspent, think about the reasons why this might have occurred. Were you unsure on what you could use the money for? Did you have trouble accessing Service Providers in your region? Were there personal or health reasons that meant you couldn’t access services over a certain period? All of this, along with your spending history, will be considered at your next NDIS planning meeting.
It’s also important to note, that at your annual planning meeting your spending history will be looked at whether you’ve underspent, overspent or spent accurately within you budget. If you have a large amount of funding remaining towards the end of your plan, although it might seem like a logical step, it’s not recommended you try to spend the remaining amount just for the sake of it. The risk of spending a large amount of funding quickly in the lead up to your planning meeting, is that it could be construed as unnecessary spending. Meaning, the potential negative impact of having too much funding remaining, then becomes a potential negative impact of unnecessary spending – a bit of a catch 22.
What’s the outcome?
Whether you’ve overspent or underspent, the NDIA indicates they will assess each new plan based on what is considered reasonable and necessary for the participant, not based on decisions regarding previous spending trends like over or underspending. Although, there are cases where this may not occur. One of the best ways to make sure you continue to have access to the funding you need, is to be prepared for your planning meeting. You’ll need to explain why you’ve either over or underspent to your LAC during your plan review, and be sure to provide plenty of supporting materials.
How a Plan Manager can help
Keeping track of your budgets, overspending, underspending, understanding what your funding can be used for, and preparing for your plan review… all of this can sometimes feel a little overwhelming, especially when you have other things, like achieving your personal goals, to think about. This is where a Plan Manager, like First2Care, can help. Having an independent Plan Manager track the financial side of your plan can be a great option for participants who are wanting the freedom of self-management, including access to both registered and unregistered service providers, but who don’t necessarily want to deal with the stress and workload of financially managing their plan themselves. You can include First2Care as your Plan Manager in your NDIS plan at no extra cost to you. Simply discuss this option with your LAC, and provide them with our referral form. One of the great benefits of having a Plan Manager to assist is that they provide a monthly summary report to tell you exactly where you are at each and every month.
At First2Care, we pride ourselves on providing personal and professional financial assistance to NDIS participants. We offer a tailored service in keeping financial records, organising providers and payments, paying invoices and tracking expenses. If one of our Plan Managers notices you are over or underspending on your budget, they can discuss this with you and help create solutions for a well-managed plan.
We also offer a free NDIS Plan Management platform, which we have designed specifically for our NDIS participants to help guide them through the planning process step-by-step. This includes: pre-planning, plan renewals, monthly budgets and reports, goals, and provider portals, which allows them to review the status of processing invoice and reconciliations, and how your budget is tracking.
Read more about the benefits of working with a Plan Manager. Alternatively, register with our FREE NDIS Plan Management platform, so we can start helping you best manage your plan today.
Read more about First2Care’s Plan Management features.
Over to you
Sometimes keeping track of your NDIS funding and spending can be tough. Which is why we offer professional and technological options to help you stay on track. We hope this gives you a better understanding of what could happen if you over or underspend on your NDIS budget, and what to do if this occurs. If you’ve had personal experience with over or underspending, or accessing the assistance of a Plan Manager to keep your funding on the right track, let us know in the comments below.