What the 2026 Federal Budget Means for Your NDIS Plan
The 2026–27 Federal Budget, handed down by Treasurer Jim Chalmers on 12 May, is one of the most significant budgets for the NDIS in the scheme’s history. For participants, families, and support coordinators, the changes announced signal a major shift in how the scheme will operate over the coming years.
Here’s what you need to know — and what it could mean for your plan.
The headline number: $37.8 billion in savings
The government has made no secret of its intention to rein in NDIS spending. The reforms announced in this budget are projected to reduce scheme growth by $37.8 billion over the next four years.
To be clear, the NDIS is not being abolished — it will continue to grow year on year and remains Australia’s largest social program outside the Age Pension.
But the pace of that growth is being dramatically slowed, and the rules around who can access the scheme and what it funds are tightening significantly.
Fewer participants by 2030
Perhaps the most significant announcement is the government’s target to reduce NDIS participant numbers from around 760,000 today to 600,000 by 2030. That’s a reduction of 160,000 people over four years.
The plan is not to remove people from the scheme overnight. Instead, the government intends to divert many future applicants — particularly children — into alternative programs outside the NDIS. Whether existing participants will be affected by plan reviews and tighter eligibility criteria remains a key concern for the disability community.
A new way of assessing who qualifies
One of the most concrete changes is how people access the NDIS in the first place.
The government will introduce standardised, evidence-based functional capacity assessments as the primary tool for determining eligibility.
A Technical Advisory Group will be established (funded at $3.3 million in 2026–27) to design this assessment tool.
What this means in practice: the process of getting onto the NDIS is likely to become more structured and, potentially, more difficult. Diagnosis alone may no longer be sufficient — the focus will shift to demonstrating the functional impact of a disability on daily life.
Plan reassessments and “reasonable and necessary” supports
The rules around plan changes are also being tightened.
The government will introduce stricter criteria around when and how plans can be reassessed, and will strengthen guidance on what counts as a “reasonable and necessary” support.
For participants who have relied on the flexibility of the current system to fund a wide range of supports, this is an area to watch closely. Support coordinators and plan managers will play a crucial role in helping participants understand what this means for their individual plans.
Support coordination and plan management will change
In a significant structural shift, the government will move to a commissioning model for support coordination and plan management. Rather than participants freely choosing any registered provider, the NDIA will commission these services — meaning who delivers them, and how, will be determined centrally.
A similar commissioning approach is also being consulted on for home and living supports, particularly for Supported Independent Living participants.
Thriving Kids and foundational supports: the alternative pathway
So where do the 160,000 people diverted from the NDIS go?
The government is investing $2 billion in a new program called Thriving Kids, part of a broader $5 billion Foundational Supports commitment (to be matched by states and territories).
This program is intended to support children with disability and complex needs through mainstream and community services rather than the NDIS.
The critical question — one the sector is watching closely — is whether these services will actually exist and be adequately funded in time to support the people moved off the scheme.
Fraud prevention and stronger oversight
The budget includes substantial investment in scheme integrity. Key measures include:
- $385.5 million over five years for a new digital payment system to reduce fraud and non-compliant payments
- $280.1 million over five years to continue the Fraud Fusion Taskforce
- $182.6 million over four years for mandatory registration of high-risk providers
- $270.1 million in 2026–27 to prepare for new framework planning, which begins 1 April 2027
These measures reflect the government’s intention to tighten what gets funded and how providers operate within the scheme.
Changes at the NDIA and NDIS Commission
Behind the scenes, the agencies running the NDIS are also changing. The NDIA’s operational budget is expected to drop from $2.8 billion to $1.6 billion between 2026–27 and 2027–28, with 669 staff positions being cut over the next financial year.
At the same time, the NDIS Commission is growing — adding 191 employees over the next year — reflecting the government’s increased focus on compliance and regulation.
Support for legal appeals
One positive measure for participants: an additional $7.3 million has been allocated to Legal Aid and NDIS appeals advocacy providers, to help people challenge NDIS decisions through the Administrative Review Tribunal.
As decisions become more complex, having proper advocacy support will matter more than ever.
What should you do now?
If you or someone you support is on the NDIS, here are the most important things to focus on right now:
- Keep your documentation strong. With functional capacity assessments becoming central to eligibility, having clear, up-to-date evidence from allied health professionals is critical.
- Understand your current plan. Know exactly what supports you’re funded for and why. If your plan comes up for review, you want to be well-prepared.
- Talk to your support coordinator or plan manager. The shift to commissioned support coordination will take time to implement. Stay in close contact with your providers about what’s changing and when.
- Watch for the new legislation. The government is expected to table the Securing the NDIS for Future Generations Bill imminently. This legislation will be the first formal step in these reforms and will give a clearer picture of exactly what changes and when.
- Connect with advocacy organisations. Groups like Every Australian Counts and People with Disability Australia are tracking these reforms closely and can provide support if you’re concerned about your plan.
Plan Hero: stable, compliant, and here for the long run
In a period of significant change, having a plan manager you can rely on matters more than ever.
Plan Hero is a fully registered NDIS provider (Provider #4050079575) operating in full compliance with the NDIS Quality and Safeguarding Framework. We’ve built our business to grow with the scheme — not in spite of it — and these reforms don’t change that.
Plan management remains a funded NDIS support, and Plan Hero’s model is built around exactly what the government says it wants more of: transparency, accountability, and genuine participant empowerment.
Our live budget tracking portal and phone app give you real-time visibility over your spending, our same-day invoice processing keeps your providers happy, and you’ll always have your own dedicated Plan Manager who knows your name and answers when you call.
Whatever the NDIS looks like in 2027 and beyond, Plan Hero will be right there with you.
Sources: Australian Federal Budget 2026–27 Budget Papers; budget.gov.au; National Disability Services
