The federal government is pushing forward with proposed cuts to the National Disability Insurance Scheme (NDIS), which it forecasts will double in cost within a decade unless significant changes are made. A new analysis by the Office of Impact Analysis (OIA) reveals that Australians with visual impairment, psychosocial disability, and Down's syndrome would be among the hardest hit under the planned reductions.
The government aims to slash social, civic, and community participation (SCCP) budgets by 50% by the end of 2027. These budgets are designed to reduce isolation and build independence for NDIS participants. The OIA report, which outlines options considered by the Department of Health, warns that the cost of the NDIS could more than double from $50 billion to $117 billion, representing 2.4% of GDP, without intervention.
Impact on Specific Disability Groups
The modelling shows that people with visual impairment will be most affected, with an average of 34% of their plans allocated to social participation, equating to a six-month budget of $13,233. For participants with psychosocial disability, about 30% of funding is typically reserved for social activities, while for those with Down's syndrome, it is around 28%.
The OIA report acknowledges that participants with certain primary disabilities are expected to be more affected by the reductions to SCCP funding. Some disability types require limited day-to-day support but need significant assistance to access the community.
Scope of the Cuts
As of March 2026, there are 774,456 participants on the NDIS, an increase of 13,014 since December 2025. The changes are expected to result in around 600,000 remaining on the scheme. The federal budget papers indicate that the reforms are projected to save $36.2 billion and reduce the growth rate to an average of 3.6% until 2030.
Health Minister Mark Butler introduced the changes, stating they are critical to achieving the national cabinet's annual growth rate target of 5-6% in the coming years. However, the OIA report notes that around half of all NDIS participants—393,401—have funding for social activities. It is expected that the social budgets of more than 60,000 participants will be halved between October and February 2027, with the remaining participants' budgets slashed by the end of next year.
Criticism and Concerns
Advocates have condemned the cuts. Megan Spindler-Smith, acting chief executive of People with Disability Australia, said, "It's heartless to cut supports we need to leave the house, work and study at a time when the cost of living has dramatically increased and alternatives are simply not there."
The OIA report acknowledges the benefits of social activities, including a sense of belonging, increased confidence, skill-building, and reduced isolation. However, it states that the decision to reduce this budget was preferred because it does not impact the health and safety of participants.
A government spokesperson said the 50% reduction on social budgets, along with a 10% cut for daily activities, is necessary to return funding to 2023 levels. The spokesperson added that most participants do not use their full SCCP and CBDA budget allocations, so the cuts will not affect everyone.
Alternative Options Considered
The OIA document also reveals that the Department of Health, Disability and Ageing examined more drastic cost-cutting options that were not recommended. These included a blanket 10% cut in every support category for all participants except those in supported independent living or requiring 24/7 care, as well as freezing participant budgets at 2025-2026 levels.
The department found that significant cuts could lead to a regression in daily living skills, elevate the risk of injury, neglect, and social isolation, and reduce the ability to engage in work and community activities. This would undermine the objectives of the NDIS, which aims to provide reasonable and necessary supports to participants.
