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Four months ago, Dane Waites sat down at his dining room table.

On a single piece of lined paper, pressed against a dark red tablecloth, he penned an urgent plea for help.

Waites was born with severe intellectual disability and received support through the National Disability Insurance Scheme.

He was sexually abused in the early 1990s at the Catholic-run Churinga Special Residential school, receiving compensation from St John of God in 2021 after suing the church.

Not long after receiving the settlement, the National Disability Insurance Agency informed Waites that the payout meant his NDIS funding would be slashed.

The decision left Waites reeling.

“The church awarded me money and written apology,” he wrote in his handwritten letter. “It was my abuse. [The judge] told me I got justice … goodbye bad man finished.

“I need the NDIS to finish. It is not their money.”

The agency applied a “compensation reduction amount”, a complex method used to prevent double-dipping by participants who receive court payouts that cover support services or equipment previously funded via the NDIS.

Waites lives with level three autism, the most profound form of autism spectrum disorder and has a severe intellectual disability and bipolar disorder. The confidential sum of compensation from the church was directly related to his abuse as a child, its continuing psychological and physical effects and the care and support he needs due to that abuse. The NDIS plan, which is not means tested, is designed to fund support services associated related to his permanent disability.

“You do not have to be Einstein to realise the Catholic church does not pay out for lifelong disabilities,” his mother, Junee Waites, 83, says.

“The compensation from the Catholic church did not come to Dane because of his disabilities.”

The Australian Lawyers Alliance has repeatedly advised government that survivors of historical child abuse matters should not be subject to compensation recovery or reduction as a matter of fairness.

“Victims of crime, victims of sexual abuse, victims of certain illnesses, such as asbestos-related illnesses … there’s many reasons why we would say that compensation recovery just doesn’t meet any fairness test at all,” Shaun Marcus, past ALA national president, said.

“Public policy should be that we exclude these types of claims from recovery, that’s the starting point. We would say a victim of child sexual abuse should not be subject [to compensation recovery], at all.”

Waites’ plan was slashed by $25,000 last year and $25,000 this year. His support workers say it is not clear how much of an NDIS budget he will be left with. He now cannot afford the support services that have helped him to live independently. His family can no longer afford respite and he is unable to afford daily activities that have helped him cope.

Waites and his mother have turned to the Administrative Review Tribunal in an attempt to overturn the decision.

The protracted battle has placed huge strain on him and his mother.

“I am so very tired of fighting for my son’s right to have a quality of life, self-esteem, dignity, a sense of security to live as independently as possible with appropriate support,” Junee said.

Waites remains in limbo. The confusion and fear he feels is shared by tens of thousands of others also facing NDIS cuts due to the federal government’s cost-saving measures.

It has also turned Waites, a champion athlete and NDIS success story, against the scheme.

He had been one of its biggest advocates.

“Mum and I toured NSW helping families feel good about the NDIS,” he wrote in a letter to the tribunal member presiding over his case.

“I don’t feel happy about the NDIS now.”

Waites’ case before the ART argues that the NDIA incorrectly classified his disability and engaged in an erroneous calculation of the compensation reduction amount.

An NDIA spokesperson said it would be inappropriate to comment on a case before the ART.

The process is complex and opaque, even for lawyers working in the area. The NDIA starts by making an assumption about how much of a person’s court settlement is to compensate for lost earnings and how much is for their past and future care and support. The process fails to account for legal fees taken from a settlement amount and other compensation amounts, including compensation for pain and suffering.

The NDIA then arrives at a total amount that a person’s NDIS plan needs to be reduced by. That figure is then divided into yearly amounts, through a process that can’t be predicted. Experts initially believed the NDIA would use a person’s forecast life expectancy to determine how much should be removed from their plan each year.

But Jane Campbell, a financial adviser and former personal injury lawyer who has written guidance to lawyers on how to approach the issue, says the NDIA has previously said it was using a “number no greater than remaining life expectancy” to determine the yearly reduction.

Campbell has seen that opaque process result in wildly unpredictable outcomes.

“This is the other thing that is really causing people concern,” she said.

These flaws leave those engaged in civil cases uncertain as to how accepting a settlement might affect their NDIS plans.

“I have met with clients who say ‘why did we go through this, we’ve had all this stress, all these legal fees, just so the defendant is handing over money to the federal government and now we’re cut off Centrelink and our NDIS will go down’,” Campbell said. “They say ‘maybe we should never have sued’. That question is being asked more and more.”

• In Australia, children, young adults, parents and teachers can contact the Kids Helpline on 1800 55 1800, or Bravehearts on 1800 272 831, and adult survivors can contact Blue Knot Foundation on 1300 657 380. In the UK, the NSPCC offers support to children on 0800 1111, and adults concerned about a child on 0808 800 5000. The National Association for People Abused in Childhood (Napac) offers support for adult survivors on 0808 801 0331. In the US, call or text the Childhelp abuse hotline on 800-422-4453. Other sources of help can be found at Child Helplines International