KB Type: Research Theme
Domain Area: Practice
Confidence: Researched (Andrew via NbLM, RS-03)
Depth Hint: Standard
Version: 1.0 — 2026-04-23
Status: Active

Under the NDIS Act, funding within the Core and Capacity Building categories is flexible by default — participants may allocate funds freely unless specific safety or financial risks are identified. Digital Locks and Stated Supports are the two exception-based mechanisms for managing high-risk scenarios. A Digital Lock ring-fences a specific item code to a specific provider's ABN; making a support Stated ring-fences funds to a category or item code. Coordinators justify these exceptions by documenting the specific risk — the support item code, the control requested, and the risk rationale — in a dedicated section of the Participant Statement. The simplified exception-based approach (introduced to replace the earlier exhaustive ledger model) means coordinators only complete the budget controls section when a specific high-risk exception requires intervention.

Under the NDIS Act, funding within the Core and Capacity Building categories is designed to be flexible by default. This underlying rule means that participants generally have the freedom to allocate funds across various supports without rigid restrictions, unless specific safety or financial risks are identified.

Digital Locks are a feature of the NDIA's PACE Framework system architecture applied when there is a documented risk to a participant's safety or the sustainability of their budget. When a Digital Lock is recommended, funding for a specific item code is restricted and locked directly to a specific provider's ABN. This prevents funds intended for a critical service from being redirected — for example, preventing a participant with a history of exploitation from losing SIL funding to an unregistered provider.

Stated supports are used as an exception to the flexible-by-default rule to manage high-risk scenarios. Making a support Stated effectively ring-fences those funds so they cannot be spent flexibly on other things, ensuring that critical money is preserved strictly for the necessary support category or item code.

Coordinators use a specific section of the Participant Statement (Block 5) mapped from Progress Report risk assessments. They must document three elements for the NDIA planner:

Support / Item Code: The exact PACE item code that needs restriction (e.g., 01_045_0115_1_1).

Control Requested: The specific architectural control needed (e.g., "Digital Lock to Provider X" or "Make Stated").

Risk Rationale: A clear justification explaining the vulnerability — for example, a participant has a history of being exploited by unregistered providers and funds must be locked to their current specialised SIL provider to ensure continuity of life-sustaining care.

Earlier template models forced coordinators to tabulate and analyse every single support line item for its digital lock or stated status. This exhaustive ledger approach was identified as administrative overkill — particularly when 15 different Core items might simply require standard flexible funding.

The exception-based approach simplifies this by allowing coordinators to leave flexible things alone. Coordinators are no longer required to map out flexible funds; they only complete the budget controls section if there is a specific, high-risk exception requiring intervention. This ensures coordinators only do the heavy lifting in the budget section when a Stated item or Digital Lock is necessary for the participant's safety.