Organised criminals are exploiting the National Disability Insurance Scheme and using the money to buy drugs, cars and holidays, Senate estimates has heard.

Criminals are setting themselves up as dodgy providers to gain access to the $42 billion scheme, which is meant to support people with a disability.

It is estimated about $4 billion is being rorted each year.

In some examples, $20,000 was splashed on a holiday and $73,000 was used to buy a new car.

Criminals were also taking NDIS participants to ATMs and forcing them to hand over their cash.

Senate estimates heard that the courts were struggling to keep up with the number of cases of participants being exploited by organised crime.

NDIS Minister Bill Shorten said 222 investigations were underway, and 15 cases were either before the courts or expected to be filed in the near future.

“Like Medicare it’s a life-changing universal support for any Australian who experiences profound disability,” he posted on social media.

“That’s why we’re stopping the rorts and the fraud.

“We’ve doubled the number of staff at the NDIS regulator, while investing in improving technology to protect the Scheme for the future.”

Great to chat on A Current Affair tonight about the NDIS. Like Medicare it’s a lifechanging universal support for any Australian who experiences profound disability. That’s why we’re stopping the rorts and the fraud. We have 222 investigations underway (1/2)

— Bill Shorten (@billshortenmp) June 3, 2024

Shorten also told A Current Affair it would take two to three years to clean up the system.

“I don’t know how big the iceberg is. Other people say 10 per cent. I think $1 ripped off from a disabled person is disgusting,” he told Seven’s Sunrise.

“The good times are over. We will catch you.”

On Wednesday, Health Minister Mark Butler said there were too many dodgy NDIS providers.

“It’s incredibly alarming,” he told the Today show.

“This is a terrific scheme that’s providing support to people with disability.

“But we know there’s simply too much waste, there are too many rorts, there’s certainly too many dodgy providers.”

National Disability Insurance Agency integrity chief John Dardo told Senate estimates at least 5 per cent of the scheme’s spending was being ripped off.

“I have spoken to, very recently, a participant who would meet the provider at the ATM, the provider would withdraw cash and provide that cash to the participant for her to source illicit substances,” he said.

Dardo said clients were also being repeatedly harassed for their money.

“These are providers that are there to do harm; when I say ‘providers’, I’m using the word in the loosest possible way,” he said.

“These are not genuine providers, these are people who should not be in business, these are not people that should be allowed near government schemes of any kind and they’re in partnership in some cases with health professionals, who we’ve already taken down or are in the process of taking down.”

The cost of the NDIS is expected to swell to more than $50 billion in 2025-26, higher than the annual bill for Medicare.

To prevent the scheme eating into other parts of the federal budget, the Albanese government is trying to limit spending growth to 8 per cent.

Laws before federal parliament aimed at overhauling parts of the disability scheme would require participants to carry out fresh assessments and receive a plan and budget based on their needs.

Money provided could then be spent only in accordance with their plan unless needs changed significantly. The government would also be able to create a list of services available as part of NDIS funding.

Deputy opposition leader Sussan Ley said the NDIS needed to be protected.

“We can’t have a situation where the NDIS money – which is taxpayers’ money – is being spent on drugs, on mortgages, on things that ordinary Australians would think are ridiculous,” she told Sky News.

“We have to protect the NDIS because it needs to be there for the people who desperately do need it now.”

-with AAP