In another sign that the National Disability Insurance Scheme (NDIS) is faltering, the mutual fund says it will scale down its NDIS services over the next 12 months in all locations, apart from a “sizeable footprint” in metropolitan Sydney following a review of its Home & Disability Services.

“This decision is vital to ensuring Australian Unity can continue to provide high standards of service to its aged care and disability customers, particularly in a climate where Australia’s ageing population and need for quality care is growing at pace,” it said in a statement.

The move comes just four years after the provider had acquired the NSW Government’s home care business including 52,000 aged care and disability clients and 4,000 staff for $114 million in 2015 under previous CEO Derek McMillan.

The company has since invested ‘millions of dollars in technology and mobile devices’ to streamline the new business and last November, moved the chief financial officer of its independent and assisted living business Steve Drummy into a new Executive General Manager Home & Disability Services.

Australian Unity says the move will enable the company to strengthen its aged care services which is “by far the largest part of its Home & Disability Services business”.

But Public Service Association of NSW (PSA) regional organiser Paul James has told the Newcastle Herald that the decision was a consequence of the financial pressures facing NDIS providers – and Australian Unity is not alone in opting out.

As we reported here, several home care providers have already elected to stop providing NDIS services including Western Australia’s Silver Chain, one of the country’s largest in-home health and aged care providers.

The argument from providers has been that they are not specialist providers of NDIS services.

Australian Unity says it will work closely with the NDIA to ensure its clients transition smoothly to another service provider of their choice.