Why underspending is risky

When you underspend on your NDIS budget, you might not be able to receive the support that you need because you are missing out on essential supports. There is also another, more subtle reason that underspending is a problem with your NDIS budget. 

The NDIS takes a number of different factors into consideration when allocating money to your NDIS support categories. One of these factors is how much money was spent on your previous NDIS plan. If you don’t spend all of your budget before the end of your plan, you may find that your funds are reduced in your next NDIS plan. 

The main reasons for underspending

Your NDIS budget is allocated to you specifically, meaning that it is designed to provide you with the right amount of funding to meet the right amount of support. There are three main reasons that you may be underspending on your NDIS budget.

1. Not knowing what to do with your NDIS plan

When receiving your NDIS plan, especially for the first time, it is easy to feel overwhelmed and misunderstand the best way to utilise your NDIS funding. There are a number of resources you can use to help you understand your NDIS plan, such as our Focus Care Ultimate Guide to Understanding the NDIS. You can also read our how-to guide on breaking down your NDIS plan. 

2. Struggling to find service providers

It can be difficult to find the right NDIS service provider for you, especially if you live in a regional area. If you aren’t able to locate a service provider to allow for the right support, it can result in unspent funds within your NDIS plan. Finding a Support Coordinator can help with this, as they can find and connect you with a number of local service providers. 

3. Not keeping track of your NDIS budget

By not keeping track of your NDIS spending, you risk being overly cautious with your spending, which can result in you underspending instead. The Plan Tracker app is one way you can maintain your spending from the convenience of your phone. You can also consider plan management to manage your NDIS funding. This allows for a Plan Manager Provider to maintain your funds on your behalf, whilst allowing for greater flexibility in arranging your supports. 

What can I do if I have underspent at the end of my NDIS plan?

If you find yourself under budget at the end of your NDIS plan, there are ways you can justify this underspending. You can document why you haven’t been able to spend your budget, and obtain proof of why this funding is still necessary in your next NDIS plan. This can help you explain your situation to your Local Area Coordinator (LAC) at your annual NDIS Plan Review.

Our top tips to avoid underspending on your NDIS plan

• Remember that not spending your NDIS budget can result in it being decreased in your next plan.

• Underspending and overspending are both risky in terms of your NDIS plan.

• Keep a close eye on how your budget is tracking - utilise a Support Coordinator or Plan Manager for this

• Request that your service providers supply you with invoices, so you can know what you’re spending.

• Reach out for help if you need it! Focus Care is available if you have any questions, and we’re sure to help out. 

• A Support Coordinator can help you find and connect with service providers in your area. 

• Be sure to document proof for why you still need your supports if you find yourself underspending. Explaining this reasoning will help ensure that your budget isn’t decreased in your next NDIS plan. 

How can Focus Care help?

Focus Care is a registered NDIS service provider, offering personalised support that is tailored to your needs and preferences. If you are looking for a service provider which offers Support Coordination, assistance with daily life, creative therapies, and more, contact us today.