NDIS Provider Saved Through SBR

NDIS Provider Saved Through SBR.

NDIS Provider Saved Through SBR Results

CASE STUDY | SMALL BUSINESS RESTRUCTURE (SBR) | GEELONG, VICTORIA | DECEMBER 2025

In March 2025, the director of a registered NDIS provider in the Geelong region received news that would change everything. Despite years of assurances from their external accountant and bookkeeper that the business was compliant with its tax obligations, BAS and PAYG returns had not been lodged since 2021.

The business itself was genuine. A social enterprise delivering psychology services, support coordination, and direct disability support to more than 140 participants. With forty-six staff surpluses were reinvested into participant services and community programmes. A business built around purpose, not profit.

But purpose alone doesn’t resolve a $664,000 debt. Without a structured solution, liquidation was the likely outcome and with it, the loss of every job and the disruption of care for some of the region’s most vulnerable.

The Situation

Three factors had converged to place the business in an untenable financial position:

Undisclosed tax non-compliance: the company’s external accountant and bookkeeper had failed to lodge BAS and PAYG returns from 2021. The director had been given repeated assurances of compliance. By the time the true position was uncovered in early 2025, accumulated ATO debt had exceeded $500,000.
Inaccurate financial reporting: delayed and unreliable management accounts had prevented effective cash flow management, removing the director’s ability to identify and respond to the problem earlier.
Revenue compression from NDIS reforms: changes to the NDIS ‘Community Connections’ programme from late 2023 had reduced the business’s revenue base, with no capacity to offset the impact through price increases under NDIS pricing regulation.

The result was a business that remained operationally sound. Its services were valued, its staff were committed, its participants depended on them.

The Rodgers Reidy Approach

Appointed as Restructuring Practitioner under the Small Business Restructure (SBR) process, Rodgers Reidy moved quickly. The task was not simply to design a restructuring plan. It was to build a credible, verified picture of the business’s financial position that could withstand scrutiny from the ATO, which held 86% of total creditor claims.

The key steps in that process were:

Four years of forensic verification: bank records, management accounts, and the debtor ledger were verified across the full period of non-compliance, providing creditors with a reliable and independently verified financial picture for the first time.
Direct ATO engagement: with $568,918 of the $664,008 in total claims owed to the ATO, the outcome depended on securing ATO acceptance of the plan.
Protection of NDIS plan management funds: a critical and nuanced step. Funds held in trust for participants under NDIS plan management arrangements were correctly identified as excluded assets. This protected client money throughout the process and ensured participant entitlements were never at risk.
Structured director contribution: a $250,000 contribution was structured to balance the director’s capacity to pay against creditor expectations: $170,000 payable immediately upon creditor acceptance, and $80,000 via 30 monthly installments, all supported by a verified 12-month cash flow forecast.
Related-party debt waiver: related-party creditors holding loans of $15,010 were required to waive their debts rather than participate in the plan, maximising the return available to arm’s-length creditors.

The plan was recommended to creditors on the basis that it delivered more than five times the estimated liquidation return. Whilst preserving 46 jobs and ensuring continuity of care for over 140 participants.

The Outcome

✔ Restructuring Plan accepted by creditors, including the ATO
✔ 35.77¢ in the dollar returned to creditors compared to an estimated 6.83¢ in liquidation
✔ 46 employees retained
✔ Uninterrupted services maintained for 140+ NDIS participants across the Geelong region
✔ NDIS plan management funds protected throughout. No participant funds at risk
✔ Director’s $250,000 contribution structured to be sustainable alongside continued trading
✔ Business continues to trade as a going concern

What This Engagement Demonstrates

This case is a reminder that financial distress is not always the result of poor management or bad decisions. Here, a director who had done everything right in building a valued community service was let down by the professionals they had trusted with their compliance obligations.

What made the difference was the speed and quality of the response once the problem was identified. Through rapid forensic analysis, effective ATO engagement, and a deep understanding of how NDIS funding arrangements operate. Rodgers Reidy was able to design and execute a Small Business Restructuring plan that served the interests of creditors, staff, and participants.

If you are advising or working with an NDIS provider or any business in financial difficulty, early engagement with a specialist restructuring practitioner is almost always the decision that determines what options remain available. The sooner that conversation happens, the more can be done.

Speak with a Rodgers Reidy Adviser Today!

Whether you are a director navigating financial pressure or an accountant working with a distressed client, our team has the expertise to help. All conversations are confidential.

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