NDIS Reform Update – What You Need to Know

This outline summarises the key points about upcoming changes to the NDIS and what they may mean for participants, families, and providers.

Why the Government Is Making Changes

The Minister explained that the NDIS has grown much faster than expected. It was originally designed for about 410,000 people, but now supports around 760,000 and warned that without reform it could reach 900,000 by 2030. He indicated that the proposed reforms are expected to involve widespread plan reviews, tighter eligibility, and a reduction in participant numbers to around 600,000 (160 000 will lose funding/plans).

The government says the reforms are needed to keep the NDIS strong and sustainable for the future.

Key Changes Announced;

1. Slowing NDIS Growth

• The number of people joining the NDIS is increasing faster than planned.
• The Government has outlined a staged approach to NDIS sustainability, with spending growth capped at around 2% per year during a short-term reset phase, before returning to a longer-term target of approximately 5–6% annual growth from around 2030.

• This may mean clearer rules about who is eligible for the NDIS.

2. Stronger Action on Fraud and Overcharging

• The Minister said some providers are taking advantage of the system.
• The government will introduce:
  • Mandatory provider registration
  • Stronger compliance checks
  • Better fraud detection tools
• The goal is to protect participants and ensure funding is used properly.

3. Changes to Pricing, Plans and Service Models

• Average funding for social and community participation is expected to reduce, with typical allocations moving toward approximately $26,000 per participant.
• Support Coordination and Plan Management funding will be reduced, with Government modelling indicating a reduction of around 30% in overall expenditure for these supports.
• Support Coordination and Plan Management are expected to shift away from an open market model toward a more controlled, NDIA-approved or commissioned provider approach.
• Other changes include: 
  • Updated pricing rules to reduce over-servicing
  • Tighter oversight of Supported Independent Living (SIL)
  • Measures to reduce conflicts of interest
• These reforms aim to improve service quality, consistency, and value for money.

4. Rebuilding Services Outside the NDIS

• The Minister said the NDIS cannot be the only support system for people with disability.
• States and territories will be asked to rebuild:
  • Mainstream disability services
  • Health and mental health supports
• This is especially important for people with psychosocial disability who may not meet NDIS eligibility but still need support.

What This Could Mean for You;

For Participants and Families

• Some people may find it harder to enter or stay in the NDIS, especially those with fluctuating or psychosocial disability.
• Plans may change if the government identifies areas of over-servicing.
• Stronger provider rules may improve safety and service quality 
• There may be gaps in support if state services are not rebuilt quickly.

For Providers

• Mandatory registration will increase compliance requirements.
• Pricing changes may affect business models 
• More audits and checks are expected.
• Smaller providers may find it harder to operate under new rules 
• Focus on moving towards a qualified, regulated workforce
• Introduction of centralised digital payment system to monitor payments

For the Mental Health Sector

• More people may rely on community mental health services instead of the NDIS.
• Demand for state-based services is likely to increase.
• There is a risk of service gaps if investment does not keep pace.

For Governments

• States and territories will need to rebuild services outside the NDIS.
• This will require funding, workforce planning, and coordination with the Commonwealth.

Summary

The Minister described the reforms as “difficult but necessary” to protect the NDIS for future generations. The changes aim to reduce fraud, improve service quality, and ensure the scheme focuses on people with significant and permanent disability.

However, the reforms will have wide-ranging impacts, especially for participants, providers, and state governments. More detail will be released as the government works through the implementation process.