Understanding This Week’s NDIS Announcement: What Families Need to Know
This week, Minister for Health and Ageing and Minister for the NDIS, Mark Butler, made a major announcement at the National Press Club regarding the future of the National Disability Insurance Scheme (NDIS). We know that any news about changes to the NDIS can cause worry and uncertainty for families. To help you understand what was said, we have put together this clear, factual guide breaking down the proposed changes and what they might mean for you and your loved ones.
The most important thing to know right now is that there are no immediate changes to your current NDIS plan today. The announcements outline proposed changes that will be rolled out gradually over the coming years, with many details still to be worked through.
Why Are Changes Being Proposed?
The government has stated that while the NDIS will continue to grow every year, the current rate of growth is too fast to be sustainable in the long term. Currently, there are about 760,000 people on the scheme. Without changes, this number is projected to exceed 900,000 by the end of the decade.
The proposed reforms aim to slow this growth and return the NDIS to its original intent: supporting people with significant and permanent disability. The government’s goal is to reduce the number of participants to around 600,000 by 2030. Minister Butler emphasised that the goal is to “safeguard and strengthen” the scheme so it remains available for future generations.
Key Changes Announced
1. Moving Away from Diagnosis-Based Eligibility
One of the most significant proposed changes is how people will access the NDIS. The government plans to remove “access lists,” which currently allow people to enter the scheme based on a specific diagnosis. Instead, eligibility will be determined by a person’s functional capacity—meaning how much their disability impacts their day-to-day living.
A new, standardised assessment tool will be developed over the coming months in consultation with the disability community. The government aims to have this finalised by the end of 2026. These new eligibility rules are expected to apply to new applicants from 1 January 2028, and existing participants will be reassessed under the new rules when their plans are due for renewal after that date.
2. Changes to Social and Community Participation Funding
The government has identified social and community participation as an area of “runaway growth.” Spending in this area has tripled in the last five years, from $4 billion to over $12 billion.
To address this, the government plans to reduce the average budget per participant for social and community participation. Over the next two years, the average spend is expected to decrease from around $31,000 to $26,000, bringing it back to 2023 levels. These changes could start affecting plans from October 2026.
However, to help ensure people can still engage with their communities, the government announced a new $200 million Inclusive Communities Fund. This fund will help community organisations, such as sporting clubs and arts groups, build their capacity to include people with disability.
3. Tighter Rules for Early Plan Reviews
Currently, about 1 in 5 NDIS plans undergoes an unscheduled reassessment (an early review) each year, which often results in increased plan values. The government intends to tighten the criteria for these early reviews. Moving forward, unscheduled plan reassessments will only be allowed in exceptional circumstances, such as a significant change in a participant’s situation.
4. Crackdown on Fraud and Unregistered Providers
A major focus of the announcement was improving the integrity of the scheme and cracking down on fraud. The government plans to expand mandatory registration for providers, particularly those delivering “higher risk activities” such as personal care, daily living supports, and services in closed settings.
- First, as the number of NDIS participants reduces and stabilises and eligibility becomes more clearly defined under the new framework, spending across all support categories will naturally reduce in proportion.
- Second, the NDIS Own Motion Inquiry into Support Coordination and Plan Management found that a significant number of smaller plan managers were processing claims directly to themselves as downstream providers of other NDIS supports — in other words, paying their own related businesses from participant budgets. The government intends to address this through consolidation of those smaller, less transparent operators.
- Third, a new shortlist of “accountable, quality providers” will be established, from which participants can choose their plan manager. This is a shift away from the unregulated open market that has allowed poor-quality operators to thrive, and towards a model where only plan managers who meet a high standard of integrity, transparency and participant care will be approved to operate. Plan Hero welcomes this direction — it is the standard we have always held ourselves to, and we are confident in our ability to meet any quality framework the government puts in place.
A new digital payment system will also be introduced to ensure every claim has supporting evidence behind it — something that currently applies to only 10% of the 600,000 claims processed every day.
What is NOT Changing?
It is equally important to understand what is not being cut or changed:
- Daily Living Supports: Minister Butler was clear that essential supports for daily living, accommodation, personal care, transport, hygiene, continence, and medication management will not be cut.
- No Means Testing: Both the Minister and the Prime Minister have ruled out introducing means testing or requiring families to make co-payments for NDIS services.
Support Outside the NDIS
For those who may not meet the new functional capacity requirements for the NDIS, the government has committed to rebuilding “foundational supports” within the community. An allocation of $6 billion has been set aside, shared between the Commonwealth and state/territory governments, to fund local services for people with lower support needs. The Minister stressed that the transition to new eligibility rules must happen alongside the rollout of these community supports so that people are not left without options.
Additionally, the previously announced Thriving Kids program is being designed to provide community-based support for children under 9, outside of the NDIS structure.
Timeline of Expected Changes
Here is a summary of when these proposed changes might take effect:
- May 2026: Legislation introduced to Parliament.
- Late 2026: Changes to social and community participation funding may begin. The new eligibility assessment tool is expected to be finalised.
- 1 April 2027: The new planning framework rolls out (delayed from July 2026).
- 1 January 2028: New eligibility rules apply to new applicants and begin for existing participants at their next plan renewal.
We understand this is a lot of information to process. We will continue to monitor the situation and provide updates as more details become available.
