An NDIS subcontractor agreement is a legally binding contract between a registered NDIS provider and an individual or business that delivers supports on the provider’s behalf. It sets out the terms of the working relationship, including payment rates, service expectations, and compliance with NDIS rules. This article explains what these agreements contain, how they differ from employment contracts, and what to look for before signing.
Background: Why Subcontracting Exists in the NDIS
The NDIS (National Disability Insurance Scheme) allows registered providers to engage subcontractors to deliver supports such as personal care, therapy, or community participation. This arrangement gives providers flexibility to meet participant demand without hiring full-time staff. Subcontractors are typically sole traders or small businesses who work under their own ABN and are responsible for their own taxes, insurance, and superannuation.
Subcontracting is common in regional areas where a provider may not have enough direct employees, or for specialised services like physiotherapy or behaviour support where a provider wants to bring in an expert for specific participants. The NDIS Quality and Safeguards Commission does not directly regulate subcontractor agreements, but it does require the registered provider to ensure all workers meet the NDIS Code of Conduct and relevant qualification standards.
How an NDIS Subcontractor Agreement Works
The agreement is a commercial contract, not an employment contract. It defines the scope of work, payment method (usually hourly or per-session), and the obligations of both parties. Key clauses typically include:
- Services to be provided – a description of the supports, including any specific participant needs or goals.
- Payment terms – the rate, invoicing schedule, and whether GST is included.
- Compliance requirements – NDIS Worker Screening, mandatory training, and adherence to the NDIS Code of Conduct.
- Insurance – public liability and professional indemnity coverage required of the subcontractor.
- Confidentiality and privacy – handling of participant information under the Privacy Act.
- Termination – notice periods and grounds for ending the agreement.
Both parties keep copies. The subcontractor invoices the provider, who then claims from the NDIS at the agreed plan rate. The provider is responsible for ensuring the work meets NDIS pricing and quality standards, even though the subcontractor delivers the service.
Choosing Between Employment and Subcontracting
One of the biggest decisions for a provider is whether a worker should be an employee or a subcontractor. The key difference is control. An employee is directed by the provider, while a subcontractor has more autonomy over how and when they work. The Australian Taxation Office (ATO) uses several indicators to determine this, including:
- Ability to subcontract or delegate work
- Control over hours and method of work
- Provision of tools and equipment
- Ability to work for other clients
- Risk of profit or loss
If a person is treated as a subcontractor but works like an employee, the provider may face penalties for unpaid superannuation, payroll tax, and workers’ compensation. Conversely, if a genuine subcontractor is classified as an employee, the individual loses their business flexibility. Providers should seek advice from a business advisor or accountant before deciding.
Common Problems and How to Avoid Them
Disputes often arise from vague agreements. For example, a subcontractor might assume they are covered by the provider’s insurance, but the agreement states they need their own. Or a provider might expect a subcontractor to work set hours, which contradicts the subcontractor’s independent status.
Another frequent issue is payment delays. The agreement should specify the invoicing cycle (e.g., weekly or fortnightly) and the payment due date. It should also state what happens if a participant cancels a session – is the subcontractor paid for the time? In the NDIS, providers can claim for cancellations under certain circumstances, but the subcontractor agreement must reflect that.
To avoid problems, both parties should:
- Read the entire agreement before signing
- Clarify any ambiguous terms in writing
- Keep records of all communications and invoices
- Review the agreement annually or when circumstances change
Costs and Payment Considerations
Subcontractors are paid a negotiated rate, which is often less than the NDIS price guide rate because the provider retains a margin to cover administration, insurance, and supervision. For example, if the NDIS price for a support worker is $60 per hour, the provider might pay a subcontractor $45–$50 per hour. The subcontractor is responsible for their own superannuation (if they are a sole trader, they may choose to pay it voluntarily), tax, and business expenses.
Providers should be aware that the NDIS Price Guide sets maximum prices that can be charged to a participant’s plan. The provider cannot charge more than that, regardless of what they pay the subcontractor. Subcontractors should also understand that they are not entitled to paid leave, sick leave, or workers’ compensation, as they are not employees.
Safety and Compliance Obligations
Both providers and subcontractors have obligations under work health and safety (WHS) laws. The provider must ensure the subcontractor is competent and properly trained, and the subcontractor must follow safe work practices. For example, a support worker must use safe manual handling techniques when assisting a participant with mobility, and a therapist must follow infection control procedures.
NDIS Worker Screening is mandatory for all workers who provide supports to NDIS participants, including subcontractors. The provider must verify that the subcontractor holds a valid clearance before they start work. Subcontractors must also complete the NDIS Quality and Safeguards Commission’s online module on the Code of Conduct.
If a subcontractor is found to have breached the Code, both the subcontractor and the provider can face consequences, including fines or being banned from the NDIS. It is essential that the agreement clearly states that the subcontractor will comply with all NDIS requirements and that the provider can terminate the agreement if they do not.
Alternatives to Subcontracting
Some providers choose not to use subcontractors. Alternatives include:
- Direct employment – hiring staff on permanent or casual contracts, which gives the provider more control but increases administrative costs.
- Independent contractor (non-NDIS) – engaging a contractor who is not registered with the NDIS but provides services privately. This is not allowed for NDIS-funded supports unless the provider is registered and the contractor meets all requirements.
- Partnership with another provider – referring participants to another registered provider for certain supports, rather than subcontracting.
- Using a staffing agency – hiring temporary staff through an agency, which may be simpler but more expensive.
The choice depends on the provider’s size, the type of supports, and the local availability of qualified workers.
Template for an NDIS Subcontractor Agreement
Below is a generic template. It is not legal advice. Have a qualified professional review any agreement before signing.
| Field | Details |
|---|---|
| Provider Name | _________________________ |
| Subcontractor Name | _________________________ |
| ABN | _________________________ |
| Services to be Provided | _________________________ |
| Payment Rate | $_______ per hour/session |
| Invoicing Schedule | _________________________ |
| Insurance Requirements | _________________________ |
| NDIS Worker Screening Number | _________________________ |
| Term of Agreement | From ________ to ________ |
| Termination Notice | _______ days |
Sample (fictional): Provider: Bright Support Services ABN 12 345 678 901; Subcontractor: Jane Smith ABN 98 765 432 109; Services: Personal care for participant “John” on Mondays and Thursdays; Rate: $50/hour; Invoicing: weekly; Insurance: public liability $20 million; NDIS Screening: ABC123; Term: 1 July 2025 to 30 June 2026; Termination: 14 days.
Frequently Asked Questions
Do I need an ABN to be an NDIS subcontractor?
Yes, generally you need an ABN to invoice a provider as a subcontractor. If you are an individual, you may be able to use your own ABN as a sole trader. The provider will require it for their records and for GST purposes if your turnover exceeds the threshold.
Can a subcontractor work for multiple providers at the same time?
Yes, unless the agreement includes an exclusivity clause. Many subcontractors work for several providers to have a steady stream of clients. However, you must ensure you do not have a conflict of interest and that you can meet all your commitments.
What happens if a participant cancels a session?
It depends on the agreement. Some agreements state that the subcontractor is not paid if the participant cancels with less than 24 hours’ notice, while others may allow the provider to claim a cancellation fee from the NDIS and pass it on. The agreement should specify this clearly.
Is a subcontractor entitled to superannuation?
Not automatically. If the arrangement is genuinely a subcontract, the subcontractor is not an employee, so the provider does not have to pay superannuation. However, if the ATO determines the worker is actually an employee, the provider may owe superannuation. It is wise for subcontractors to set aside money for their own super.
Who is responsible for NDIS Worker Screening?
The provider must verify that the subcontractor holds a valid NDIS Worker Screening clearance before they begin work. The subcontractor is responsible for applying for the clearance and keeping it current. The provider may also ask for evidence of other qualifications or training.
Can a subcontractor be an unregistered provider?
Yes, a subcontractor does not need to be a registered NDIS provider themselves, as long as the main provider is registered and takes responsibility for the supports. However, the subcontractor must still meet all NDIS requirements, including the Code of Conduct and any specific qualification standards.