What are the Proposed Changes to the NDIS?

The Greens have secured a further eight weeks of Senate inquiry into Labor’s proposed changes to the National Disability Insurance Scheme (NDIS) in exchange for supporting Labor’s capital gains tax and negative gearing changes. 

The NDIS bill is likely to pass the Senate this year with the support of the Coalition.

Here’s an overview of some of the planned changes to the NDIS and the reasons behind them.

Access onto the scheme 

The government will design functional capacity assessments over the coming months that will determine whether current NDIS plans are renewed, and replace diagnosis access lists as the method to access the NDIS scheme from January 2028. 

Minister for the NDIS, Mark Butler, said in his National Press Club (NPC) speech in August that he wants to return the scheme to its “original intent” of supporting people with “significant and permanent disability”. 

“The ‘diagnosis gateway’ has funnelled people onto a Scheme that was never designed for them,” Butler said.

According to the proposed changes, people will only be able to access the NDIS if their disability is deemed permanent or likely to be permanent.

A disability is unlikely to be considered permanent unless the participant has sought all appropriate treatments and found there is no treatment likely to reverse or improve the impact of the impairment. A person’s financial and geographical circumstances are irrelevant in the assessment of whether or not a person has undertaken all appropriate treatment. 

Disability Advocates in the Northern Territory have raised concerns about this aspect of the bill in a joint submission to the Senate inquiry on the 29th of May.

“Aboriginal and Torres Strait Islander participants are likely to experience a disproportionate share of access denials because they are more likely to live in remote areas where services… are limited,” the submission said.

The bill has been amended since the senate inquiry to clarify that ‘appropriate treatments’ refers only to treatments accessible through publicly funded services, like Medicare and the Pharmaceutical Benefits Scheme.

Overall, these changes will mean instead of a projected 940,000 people on the scheme in 2031, there will be about 600,000. 

Thriving Kids

Thriving Kids is a program set to start in January 2028 for children under nine who have developmental delay or autism with low to moderate support needs. 

Children will not need a diagnosis to access Thriving Kids and they will not receive individual budgets. Instead, children will be referred to appropriate support services that will not attract gap fees.

“Since the scheme’s creation, the number of people with disability entering the system has generally stabilised around initial projections. Except in one area: children with developmental delay or autism,” Butler said in his NPC speech last year.

“Half of new NDIS entrants are under the age of nine, most of whom have developmental delay or autism,” Butler said in this year’s speech.

Reduction in Community and Participation budgets 

Social and community participation budgets will be reduced from $33,000 to $26,000.

Social and community participation budgets fund the support workers or equipment needed for NDIS participants to engage in social and community activities.

This stream of support was set to cost $20 billion annually by the end of the decade if left unchanged. 

“We can’t afford for the NDIS to continue growing at its present rate,” Butler said in his NPC speech.

The government will establish a $200 million dollar Inclusive Communities Fund, for community organisations to provide new participation opportunities for NDIS participants. 

The legislation will also enable the Minister for the NDIS to cut community and social participation budgets by up to 50% in the future.

Level of registration required

NDIS providers will have to be registered to provide personal care in closed settings from July 2027.

Minimising fraud and improving transparency 

The government will implement a digital payment system that will require greater evidence for NDIS payments from July 2026.

The National Disability Insurance Agency (NDIA) will also have greater power to compel information from NDIS providers about claims or receipts.

“Currently the NDIA has no visibility of evidence for 90% of claims that are made by plan managers or by providers directly. That’s around 600,000 claims every day without supporting evidence,” Butler said in his NPC speech.

So what happens to all the people who will no longer be able to access the NDIS because of these changes?

Six billion dollars have been allocated toward establishing Foundational Supports, to provide local support for people who have less significant support needs and are not given access to the NDIS.

However, State and Territory ministers for disability services have said that there are a lack of alternative supports to accommodate the participant exits.

"There is a significant risk that people with disability will end up in hospitals or other settings that are inappropriate and unable to meet their needs, or have no access to services at all," the submission said.

“The States and Territories are not in a position to and have made no agreement to deliver like-for-like services for people who are exited from the NDIS.”

Butler said on ABC’s Insiders that the government is “not going to make changes that leave people without supports” and agreed to slow down cuts to the NDIS if the foundational supports were not ready.

But Matthew Hall, from the Australian Federation of Disability Organisations, said during the senate committee that the submission by the State and territory ministers confirms "what the disability community has feared”.

“Having to rely on foundational or mainstream services in different parts of the country which will become fragmented and the quality of service will not be consistent,” Hall said.

“What services you can get will depend on where you are lucky enough to live and what level of infrastructure or access to services you have.”

This list of changes is subject to change with another eight weeks of Senate inquiry to go; however Butler said “the direction of travel is an important one for us to follow through”.