Announcement date
12 May 2026
Link to announcement
Problem being addressed
The National Disability Insurance Scheme (NDIS, the Scheme) was established in 2013 to support people with permanent and significant disability. The Scheme provides funding for reasonable and necessary supports to allow people with disability to be independent, and participate in social and economic life.
The Scheme has drifted from its original intent, which has seen the cost of the Scheme continue to grow beyond sustainable levels, driven by higher than anticipated numbers of participants and higher average costs. Scheme design is also contributing to growing inequity across social care systems in Australia.
Proposal
The options and preferred approach to reform the NDIS considered in this Impact Analysis (IA) are outlined below.
Eligibility and support reforms
- Option 1: Do nothing (status quo). No further action other than existing announced reforms - New Framework Planning, Thriving Kids and linked access changes.
- Option 2 (preferred): A balanced approach of eligibility and support changes for the NDIS. Reforms under this option include changes to Scheme eligibility requirements, and changes to volumes of supports funded by the NDIS.
- Option 3: More substantial eligibility changes. Reforms under this option include more substantial changes to NDIS eligibility.
- Option 4: More substantial changes to the volume of NDIS supports. Reforms under this option include more significant reductions in the volume of supports a participant can receive.
The preferred option for eligibility and support reforms is Option 2 as it is considered the most effective option to meet the reform objectives.
Plan management reforms
- Option 1: Do nothing (status quo).
- Option 2 (preferred): Plan management panel. Option to consolidate the plan management market to a smaller panel.
- Option 3: Abolish the plan management market. Option to transition all plan management functions to the NDIA.
The preferred option for plan management reforms is Option 2 as it is expected to have the greatest medium-term impact for NDIS participants, other NDIS service providers and government.
Support coordination reforms
- Option 1: Do nothing (status quo).
- Option 2: Light touch reform to existing support coordination market. Reform option to require mandatory registration for support coordination providers.
- Option 3 (preferred): Commission a new support coordination service with capped program expenditure. Reform option would commission support coordination functions as a new support coordination and connection service.
- Option 4: Commission a new support coordination service with a greater cap on program expenditure. Reform option would commission support coordination functions as a new support coordination and connection service, with a tighter limit on funding available to deliver the new service.
The preferred option for support coordination reform is Option 3 as it has been assessed as having the greatest net benefits for NDIS participants, the sector and the Australian Government.
Overall, the preferred reform options will enable those with permanent and significant disability to access the Scheme and receive reasonable and necessary supports, though will reduce the number of NDIS participants and some of the supports participants can receive through the NDIS. These measures will contribute to Scheme sustainability and help achieve National Cabinet’s target of 5 to 6 per cent, or lower, annual growth. The reforms to intermediary functions will improve quality and integrity by enabling greater oversight of support coordination and plan management services available to NDIS participants. It will leverage economies of scale to deliver more efficient services and reduce duplication between intermediary functions.
Assessed Impact Analysis outcome
Adequate
Assessment comments
To be considered Good Practice as per the Australian Government Guide to Policy Impact Analysis, the IA would have benefitted from further quantification of the costs and benefits and a more detailed implementation and evaluation plan.
Regulatory burden
The Department of Health, Disability and Ageing estimates the preferred option for reforms to plan management and support coordination will increase average regulatory costs by $32.24 million per year, over ten years. The Department notes at this time there are no further known regulatory burden costs for preferred option for reforms to eligibility and support reforms.