They were locked out of their own home. Three women with significant disabilities, unable to enter their specially designed residence because their NDIS provider—Cocoon SDA Care—hadn’t paid the rent. It was the moment one of Australia’s most praised disability support company suddenly began to unravel.

Cocoon, once hailed as a success story of the National Disability Insurance Scheme, had been lauded with accolades. It held spot on the AFR Fast 100 list, recognition as a great places to work, and industry awards for staff excellence. But behind the polished public image was a house of cards—propped up by a hyper-aggressive expansion model, questionable billing practices, and missed warning signs from government regulators.

It’s difficult not to conclude that there is something seriously wrong with the scheme as a whole when an operator like this can suddenly self-destruct, leaving vulnerable people quite literally exposed on the street.

A series of media investigations and internal leaks have revealed the shocking collapse of the provider once entrusted with caring for hundreds of vulnerable Australians.

Cocoon’s parent company, Horizon Solsolutions Australia, is now under scrutiny for promoting property investment schemes blurring the line between disability support and financial speculation. The NDIS Quality and Safeguards Commission has suspended Cocoon’s registration after site visits found “serious safety concerns.” Meanwhile, the NDIA has frozen funding amid investigations into allegedly fraudulent claims - including even ones submitted for deceased clients and prisoners.

How did a company so decorated and publicly celebrated fail so spectacularly—and why didn’t the watchdogs act sooner?

Continue reading: A model rewarding growth over care

The story of Cocoon’s downfall is rooted in a fundamental failure of oversight.

While the company was growing rapidly—over 200 homes, 2,400 staff, and investment franchises sprouting across the country—regulators issued modest fines when faults were found. In total, Cocoon was penalised more than $50,000 in 2023 and 2024 for not delivering “safe and competent” care.

Its registration, however, remained intact.

Until this month.

The NDIS Quality and Safeguards Commission, responsible for enforcing standards, conducted site inspections only after multiple staff and participant complaints escalated earlier this year. By then, the damage was already unfolding: unpaid wages, missed services, vulnerable clients neglected, and frontline workers raising red flags. One whistleblower described the workplace as “chaotic and underfunded,” despite the company’s public claims of being a sector leader.

The NDIA, which monitors funding and payments, is also under scrutiny. Between March and April 2025 alone, Cocoon submitted 9,462 payment claims, many of which are now being reviewed for potential fraud. Over $246,000 in NDIS funds were allegedly claimed for services never delivered—highlighting what some experts call a systemic loophole in auditing.

The agency had the authority to suspend payments but only took significant action only after the media stories and protests forced public attention.

One striking element in Cocoon’s case is its blurred business model. Horizon Solsolutions Australia not only ran the care operation but actively promoted disability housing investments, offering “passive income” to investors via SDA property schemes. This dual focus on real estate and care raised ethical concerns long before the collapse but was not seriously investigated.

Many now question how a provider that marketed itself to investors with glossy brochures could also be trusted to deliver life-changing support to people with complex needs.

The trouble is, people depend on this business.

Participants once supported by Cocoon are now scrambling for continuity of care and emergency accommodation has been arranged. In the meantime, advocacy groups are calling for urgent reform of provider accreditation systems.

In particular, there have been calls for:

• Real-time compliance dashboards showing provider histories and complaints,

• Stronger whistleblower protections within the NDIS sector,

• Mandatory separation between investment entities and care services, and,

• Early warning mechanisms when payment patterns suggest anomalies.

For now, the Commission and NDIA continue their investigations—but for the families displaced and the frontline workers unpaid, the damage is already done.