WhatsUp

People with high-value National Disability Insurance Scheme (NDIS) plans are being "kidnapped" and having their funding drained by providers that are supposed to help them live better lives, a bombshell report says.

The interim report also says people with disability who live in supported residential services (SRS) in Victoria are being "coaxed" into changing accommodation and service providers "through offers of fast-food 'treats' like KFC and McDonalds".

The government-commissioned report was produced by the Melbourne-based Mental Health Legal Centre (MHLC).

It found people with disability in Victorian SRSs – historically known as boarding houses – have been financially abused, neglected and manipulated by providers.

"Currently companies can collect residents, take them to undisclosed locations and siphon the funding from their packages," it says.

NDIS Minister Bill Shorten said the report came about after meetings with whistleblowers, and he suspected similar abuses were happening across the country.

"The NDIS is here to stay. It's changing people's lives," he told reporters in Melbourne.

"But there is no doubt that in the last number of years, the neglect and oversight of the system has seen vulnerable people with lucrative support packages fall through the cracks, and effectively be human trafficked."

Mr Shorten said the federal government had referred more than 50 providers to the National Disability Insurance Agency (NDIA),