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Managing your NDIS funding is not as straightforward as it may seem. There are many reasons you may over or underspend, such as changing your address and missing services or spending more time in hospital than expected. But whatever you do, don’t panic! This article will explain what might happen in these situations and some tips on avoiding any unforeseen consequences.

What to do if you underspend your NDIS budget?

When it comes to managing your NDIS funds, don’t stress out if it looks like you’ve underspent during your current plan. The amount of funding you receive for your disability can often change after your plan review, so monitoring and tracking your budget and staying ahead of the game is essential.

If your plan review is creeping up and it looks like you will not reach your spending target, do not suddenly start spending a lot of money in a short amount of time. All your spending will be reviewed during your plan review, and it will be pretty apparent if you have recently been spending unnecessarily. In this situation, it is best to start spending a little more each month to make sure you get closer to your target by the end of your plan. But make sure all your spending is tied to your goals and meets your plan outlines.

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The NDIS loves record keeping, so it is essential that you keep all your receipts and spending on record. It’s also important to keep records and document because you might have underspent during your plan. Just because you haven’t utilised all your funding doesn’t mean you will have it reduced after your plan review, but it helps if you can show some valid reasons why you may have underspent.

Common scenarios that may lead to underspending can be:

  1. Misunderstanding what funding categories are for which service
  2. Delays with appointments to your service providers – long wait times, cancelled appointments etc.
  3. A specific service provider is not available within your area
  4. Lifestyle factors like moving house or states, changing jobs or family issues
  5. Sustaining an injury that may prevent you from undertaking care.

Keep track and record any instances that may prevent you from utilising your NDIS funding because it’s always better to not leave anything in the kitty for the following plan review.

Here are some tips to avoid overspending.
1) Know your plan

When you are first starting on your NDIS journey, it’s important to understand everything in your plan. This means sitting down with a carer, support coordinator or family member and making sure you know the ins and outs. When you know where your money is going right from the start, it’ll make things easier down the road.

2) Set budget goals for your plan

While NDIS participants are constantly working towards their own goals, it’s essential to set goals for your plan to stay on top of your spending. Setting monthly spending goals is a great way to stop funds from backing up.

3) Get Help

You are not alone on your NDIS journey. There are a lot of different supports out there to help you manage your NDIS plan. Speak to your support coordinator or employ the services of a plan manager. A plan manager is an essential service to help people manage their NDIS funds, and they’ll make sure to keep on top of your spending.

4) Use budgeting software

There’s no need to get the pen and paper out when trying to calculate your spending. There’s a ton of apps and software available that will help you manage your spending. Often, a service provider will give you access to a customer portal where all your spending is tracked electronically.

What to do if you overspend on your NDIS budget?

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Overspending on your NDIS budget is a situation where you have been spending more than estimated on your support and services and may lead to you running out of funds before your plan review. This is not ideal for anyone, and it’s a situation that should be avoided to make sure you can continue to receive the services and supports you need during your plan.

However, we are all human, and we all make mistakes, or sometimes things happen that are out of our control. If you have realised you have overspent during your plan or that you will run out of funds at your current spending trajectory, there are avenues you can take to try and get back on track.

Here are some steps to take if you are overspending on your NDIS funding.
1) Talk to someone

Help and support are always available for people when they speak up. It can seem a little embarrassing, or you may want to fix it yourself, but speak to your service providers. Your Local Area Coordinator and your Plan Manager will likely be the best way to ensure you get your spending under control.

2) Keep records

If something has happened during the plan that led you to overspend, keep a record of the date and amount spent. This will be useful if you want to apply for a budget increase or your plan review indicates your spending is too high and needs to be reduced.

3) Negotiate with your service providers

It may be possible to negotiate with your service providers to reduce or change the services you are receiving to make sure you can remain within your NDIS budget. Maybe you want to reduce the number of hours a day you receive support or switch between two support providers as they are charging less per hour.

4) Sign up with My Care Plan manager

Plan managers are the accountants of the NDIS world and can be extremely valuable in reducing your overspending. They are experts in the NDIS program and can advise you on what you are spending on that may be unnecessary or negotiate with service providers to reduce costs.

The NDIA is usually reluctant to provide extra funding to participants for the sole reason of not budgeting correctly. So it’s crucial you try to remain within your spending limits or have recorded and measurable occurrences that have led you to your situation.

The best way to rest easy and not have to worry about overspending is to take active measures to prevent it from happening in the first place.

Here are some tips to reduce the chances of overspending.
1) Budget, Budget, Budget!

Set a monthly budget at the start of your plan and review your spending monthly. Knowing what you have already spent and how much you have left is the first step to knowing if your current expenditure will lead to a breach.

2) Request invoices at the exact dates

Often invoices will come from different service providers at other times. A critical step in managing your budget is making sure your invoices don’t arrive late and are paid within a similar time frame each month.

3) Sign up with My Care Plan Manager!

This step was also mentioned in ‘what to do if you overspend’. A plan manager can help you if you have overspent, but they are also one of the best ways at making sure you never overspend in the first place. A good plan manager will make sure you stick to your budget and keep excellent records of all your spending.

4) Keep a small buffer

By keeping 5-10% of your NDIS budget free, you may be able to avoid running out of funds too early. In life, surprises happen, and we often need to pay for unexpected expenses. A small emergency fund can soften the blow of extra costs.

5) Request final invoices two months before your plan review.

When you see your plan review coming up, try and get any outstanding invoices sent to you a month or two in advance. If you can balance your funds evenly close to your plans end date, you’ll likely not hit any extra surprises right before the finish line.

Get in touch with My Care Plan Manager today and ask how we can assist you in managing your NDIS funding.

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