Many NDIS providers — especially smaller operators and SIL/SDA businesses — engage support workers as ABN-holding independent contractors rather than as PAYG employees. It’s flexible, it scales, and it lets workers operate across multiple providers. But it also opens a series of risks the law has been increasingly strict about, and a written contractor agreement is the document that addresses them.
The sham-contracting risk
Under the Fair Work Act 2009, an arrangement is “sham contracting” if it disguises an employment relationship as a contractor relationship. The Fair Work Ombudsman has been actively investigating sham contracting in NDIS and aged care for several years. Penalties for businesses caught are significant.
A proper independent contractor agreement makes the relationship explicit on paper: the worker controls how the work is performed, supplies their own tools where applicable, can take other work, invoices for output rather than time, and isn’t subject to the day-to-day direction of an employer. Without that documented framing, the ATO or Fair Work can re-classify the relationship retrospectively, leaving you exposed to backpay, superannuation, and PAYG obligations.
The participant-relationship risk
The other big issue specific to NDIS contracting is what happens when a contractor leaves. Without a written agreement, there’s nothing stopping them from taking participants directly — bypassing your business, undercutting your pricing, and damaging your revenue. A contractor agreement should include reasonable restraint clauses (which are enforceable in Australia within reasonable scope and duration), confidentiality of participant data, and clear ownership of the participant relationship.
What a good contractor agreement covers
- Identification of both parties (provider business + contractor with ABN)
- Scope of services — clearly defined and output-based, not time-clock-based
- Rate and payment terms — typically per-hour or per-shift, with invoicing requirements
- Statement of relationship — explicitly contractor, not employee
- Insurances required — public liability, professional indemnity, workers comp where applicable
- NDIS-specific obligations — compliance with the Code of Conduct, Worker Screening Check, NDIS training
- Confidentiality of participant information
- Restraint of trade — reasonable, time-limited, geography-limited
- Termination terms
- Both signatures
Drafting one without a lawyer
Claim Done’s Independent Contractor Agreement is drafted to Australian standards and adapts cleanly to NDIS support-worker engagements. The wizard asks about the role, the rate, the participant assignment model, and what restraint clauses you need. Flat $79. Use it as a template for every new contractor, with minor tweaks for role-specific details.