The Albanese government has launched the most significant intervention in the National Disability Insurance Scheme's (NDIS) history, announcing that at least 160,000 people will be cut from the scheme within four years. Health Minister Mark Butler outlined the changes, which include new eligibility rules and independent functional assessments for all participants, projected to save the federal budget $35 billion over four years.
A Scheme Out of Control
The NDIS, a bipartisan vision born from a 2011 Productivity Commission report, was originally designed to support 410,000 people with permanent and significant disabilities at a cost of about $13.5 billion annually. However, the number of participants has ballooned to 760,000, with projections reaching 900,000 by 2030 without intervention. The scheme is now on track to cost $70 billion by the decade's end if left unchecked.
David Bowen, the first chief executive of the NDIA, expressed doubts that the scheme would have been funded had its current size been foreseen. "Had any government known it was going to be this size, it would have never been funded in the first place," he said.
Why the NDIS Grew Beyond Expectations
Several factors contributed to the NDIS's unexpected growth. The pyramid of disability supports envisioned in the 2011 report was never fully constructed. States and territories pulled funding from their own disability programs, leaving the NDIS as the only support system. Additionally, a lack of regulation allowed for exploitation, with 90% of invoices submitted without supporting evidence.
The eligibility process also broadened the scheme. A diagnosis of autism alone became a basis for entry, leading to 324,200 participants with autism, or 43% of all participants. Bowen noted this change "broadened it incalculably."
New Reforms: Independent Assessments and Registration
Under new laws to be introduced next month, all participants will undergo evidence-based independent assessments to determine eligibility. The government will also create a digital payments scheme and mandate registration for more provider categories, including personal care and daily living support. Currently, only 6% of the 277,000 providers are registered.
Mandatory registration has been controversial, with some disability advocates arguing it undermines the "choice and control" principle. However, Bowen supports it, drawing a parallel to Medicare: "You can choose your own doctor, but you can't spend the money on alternative health services."
Political Context and Community Anxiety
The reforms mark a shift for Labor, which previously blocked the Coalition's independent assessments in 2021 and campaigned to "defend the NDIS" in 2022. Now in government, Labor has set an 8% annual growth target, later revised to 2% until 2030.
Emma Bennison, CEO of Disability Advocacy Network Australia, said the disability community is "racked with anxiety" over the changes. "People are feeling like they're being heralded as a burden on society," she said. The government has also announced a $4 billion Thriving Kids program to divert children under nine with mild developmental delays from the scheme.
Butler emphasized the need to "save the NDIS itself," citing unsustainable cost trajectories. The reforms aim to reset the scheme to ensure it supports those who need it most.
