NDIS funding lifeline 'may not be enough to stop providers closing down'

The federal government has announced an $850 million funding boost for NDIS providers. (AAP)

Disability providers have welcomed a $850 million funding boost to the NDIS, but say it may not be enough to stop some service providers from closing down.

The federal government said it will inject more than $850 million into the National Disability Insurance Scheme market from July 2019.

Service provider Knoxbrooke in Melbourne said the funding injection may be too late. 

Under-pricing of services has already put pressure on it's services, forcing the closure of a popular hydrotherapy pool and to put the site up for sale.

"Over the last two years we have incurred substantial losses exceeding a million dollars and a lot of that has been driven by the NDIS under-pricing for the services we deliver," Knoxbrooke CEO Kristian Dauncey said. 

Extra funding responds to 'emerging issues'

The new funding will allow therapists to receive a minimum increase of almost $11 per hour, while the base limit for attendant care and community participation will be increased by up to 15.4 per cent.

Minister for Families and Social Services Paul Fletcher said the changes "form part of the National Disability Insurance Agency's annual price review to update prices that reflect market trends, costs in wages and other influences".

"It also responds to regular monitoring of markets and responding to emerging issues," he said in a statement on Saturday.

A file image of Social Services Minister Paul Fletcher
Social Services Minister Paul Fletcher (AAP)

The government also announced a $1.3 million boost for Playgroup Australia to continue delivering programs that support children with a disability.

Assistant Minister for Social Services, Housing and Disability Services, Sarah Henderson said Playgroup Australia will also receive $200,000 to continue Better Start Community Events.

"These events are held across the country, including in regional, rural and remote areas to promote the benefits of playgroups for children and to help parents connect with local support services, including the National Disability Insurance Scheme," Ms Henderson said.

Ms Henderson made public additional changes to the NDIS allowing for some participants to switch from a standard 12 month plan to a two year plan before needing a scheduled review.

"We know this will be a positive change for many NDIS participants, so we encourage participants to have a conversation with their Local Area Coordinator or planner to discuss what is best for them," she said.

Labor calls announcement a 'knee jerk reaction'

Labor said the announcement was "cynical politics" and a "knee jerk reaction" to the NDIS crisis ahead of the election.

"The government should have been delivering the NDIS properly all along, not using it to prop up their budget," Linda Burney, Shadow minister for Families and Social Services, and Jim Chalmers, Shadow Finance minister said in statement.

"It’s cynical politics for the Government to only begin to paying attention to the crisis in the NDIS weeks out from an election."

Labor frontbencher, Linda Burney.

Praise and concern from disability service providers  

Disability lobby groups and providers have responded positively to the news but flagged that more needed to be done to get the NDIS on track.

Acting CEO of National Disability Services, David Moody, said the price increase would make a real difference.

"Until now disability service providers have borne the brunt of inadequate NDIS prices, with 28 per cent operating at a loss and 1 in 10 discussing closure altogether," he said.

An alliance of Australia's largest disability service providers, Alliance20, described the announcement as "an important step forward", but that pricing was not the only issue.

Spokesperson Andrew Richardson said members were "keen to see rapid improvement in participant planning and review processes, transport arrangements, employment supports, workforce development, support for people with complex needs and people living in remote areas".

Additional reporting: AAP

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