When Safeguards Collapse: Federal Court Imposes Record $2.5 Million Penalty on NDIS Provider

When Safeguards Collapse: Federal Court Imposes Record $2.5 Million Penalty on NDIS Provider

On November 14, 2025, the Federal Court of Australia (the Court) delivered a landmark decision against Lifestyle Solutions (Aust) Pty Ltd (Lifestyle Solutions), imposing a record $2.5 million penalty for widespread failures that exposed NDIS participants and support workers to violence, abuse, and unsafe living conditions. This is the highest penalty ever issued in proceedings brought by the NDIS Quality and Safeguards Commission (the Commission). The full decision can be found here (Decision).

Lifestyle Solutions admitted to thousands of breaches of its obligations under the NDIS Act, the NDIS Practice Standards, the Code of Conduct, and the NDIS Reportable Incident Rules.

The Court’s decision sends a clear and firm message that NDIS providers who fail to protect the safety, dignity, and rights of people with disability will face serious legal, financial, and reputational consequences.

Background

Lifestyle Solutions operated a Supported Independent Living (SIL) home on the NSW Central Coast, providing care to residents with high and complex needs who required continuous support and close supervision.

During the regulatory investigation, the Commission uncovered serious failures in safeguarding practices. One NDIS participant, who relied on non-verbal communication, experienced repeated violence. She was bitten on the face and arm, placed in a headlock, and having her hair forcibly torn out. These incidents occurred within the home in circumstances where the provider should have had effective systems to prevent and respond to harm.

Support workers were also subjected to frequent violence, including being bitten, spat on, and physically assaulted. Despite these ongoing risks, Lifestyle Solutions did not have adequate risk assessments, behavioural support strategies, or incident response procedures in place.

Lifestyle Solutions admitted to 96 contraventions of the NDIS Act, which included multiple breaches of the Practice Standards and Code of Conduct between June 2019 and October 2021. The organisation also admitted to 1,811 contraventions of the Reportable Incident Rules for failing to notify the Commission of serious incidents within the required timeframes between November 2018 and December 2023. The facility manager separately admitted to 13 contraventions of the NDIS Act for her role in the home.

What the Court Found

The Court found that Lifestyle Solutions had systemically failed to provide a safe environment for both participants and staff. Justice Abraham noted that violence within supported accommodation can never be normalised, and that the provider’s sustained non-compliance represented a serious departure from its fundamental safeguarding obligations.

In determining the unprecedented penalty, the Court emphasized:

• the extreme vulnerability of the residents;
• the repeated and preventable harm inflicted;
• the provider’s failure to take reasonable steps to prevent further abuse;
• the significant delay, or total absence, of reportable incident notifications;
• the need to deter similar failures across the NDIS sector.

Justice Abraham stated, “participants were entitled to be safe and protected, but they were not”, highlighting that the inadequate management and reporting of violence had a profound human impact.

The Court imposed $2 million for breaches of the NDIS Act, including failures relating to the Code of Conduct and Practice Standards, $500,000 for breaches of the Reportable Incident Rules, and $150,000 in legal costs payable to the Commission. This was the first case of its kind involving abuse of this nature in a supported accommodation environment.

Why Duty of Care Matters Under the NDIS

NDIS providers owe a non-delegable duty of care to participants. This means providers must take all reasonable steps to protect participants from foreseeable harm, particularly those who rely on them for intensive daily support.

This duty sits alongside statutory obligations under the NDIS Act, the NDIS Code of Conduct and the NDIS (Incident Management and Reportable Incidents) Rules, which require providers to:

• safeguard participants’ human rights, dignity, and wellbeing;
• ensure all staff are trained to safely support participants with complex needs;
• maintain an effective incident management system;
• promptly report serious incidents to the Commission;
• implement governance systems that identify, monitor, and respond to risk.

Lessons for NDIS Providers

When providers fail to meet the standards of duty of care, the consequences are not only regulatory. They expose vulnerable people to significant harm and violate the trust placed in service providers by participants and their families.

This decision is a turning point for the sector. It reinforces that safeguarding is not optional and highlights the importance of:

• Strong governance and leadership. Boards and executives must actively oversee
  safeguarding risks. Failures at the frontline often reflect deeper governance
  shortcomings;
• Effective behaviour support and incident response. Providers must ensure risk
  assessments, behaviour plans, and incident response systems are current, documented, and rigorously followed;
• Competent, well-supported staff. Workers need regular supervision, training, and access to specialist guidance when managing participants with complex behaviours;
• Timely reporting and transparency. Late or missing incident notifications not only breach legal obligations, but they also delay critical regulatory intervention and increase risk to participants;
• A culture of safety and accountability. Safeguarding thrives in organisations that value transparency, learning, and ethical practice. Providers must prioritise participant rights over operational convenience.

How Safe Space Legal Can Help?

The team at Safe Space Legal has extensive experience working with organisations in the disability sector, to support and strengthen their safeguarding practices and ensure organisations are meeting their legal obligations when working with people with disability. We work with organisations across Australia and frequently conduct independent safeguarding investigations.

Safe Space Legal offers holistic safeguarding services including:

• Developing safeguarding policies, procedures and complaints-handling processes;
• Delivering safeguarding training to ensure organisations are aware of their obligations and sector-specific requirements;
• Conducting trauma-informed specialist safeguarding investigations into allegations of violence, abuse, neglect and exploitation in the disability sector;
• Providing expert advice on safeguarding compliance and systemic issues;
• Conducting root cause analyses of critical incidents and crisis management;
• Providing sound legal advice on risk mitigation; and
• Completing policy and implementation audits to ensure compliance with legislative obligations.

Contact office@safespacelegal.com.au or call (03) 9124 7321 to organise a complementary discussion in relation to your organisation’s safeguarding needs.