In sweeping reforms to the National Disability Insurance Scheme (NDIS) announced today, the government will cut 160,000 participants from the scheme over the next four years and reduce funding for the average plan by A$5,000 in the next two years.
Speaking at the National Press Club today, NDIS Minister Mark Butler argued the scheme “costs too much and is growing too fast”. He claimed the NDIS was losing its social licence, with six in ten Australians believing the scheme was “broken”.
Without significant changes, he argued, the NDIS “will not be able to deliver what Australians with disability deserve”. Instead, he wants to return the NDIS to its original intent and improve the scheme’s financial sustainability.
So what are these changes? And what might they mean for NDIS participants and their families?
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What changes will be made?
The government’s plan to secure the NDIS will have four pillars:
- fighting fraud and stopping rorts
- slowing rapid cost increases
- clearer eligibility requirements
- delivering quality services and support to participants.
To achieve these pillars, Butler set out several changes, including:
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introducing a digital payment system so there is better visibility over claims made to the NDIS and to ensure these are genuine
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reducing the number of organisations able to operate as plan managers
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reducing the number of unscheduled plan reassessments, where people spend their budgets before their plans end
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establishing a $200 million Inclusive Communities Fund to support people with disability to participate in their communities to partially replace cuts to individual plans
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increasing the number of activities that require mandatory registration of providers
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delaying new planning processes (that were due to start in July) until April 2027.
Cutting the cost of the NDIS
The original design for the NDIS predicted it would have 410,000 participants. But today there are more than 760,000.
With more participants than originally predicted, the scheme is more expensive than was budgeted. This year the NDIS is predicted to cost more than $50 billion.
The Labor government has been signalling it wants to curb the growth of the scheme for some time. In 2022, the annual growth rate of the scheme was 22%. A meeting of National Cabinet in 2023 agreed to bring this down to 8%. This year, this was revised down to 5–6% per year.
Butler argued that while the government has tried a number of reforms to meet these targets, progress has been too slow. He will now cut costs by reducing plan amounts and changing eligibility requirements to make it harder to access the scheme and lead to some current participants no longer meeting the criteria.