NDIS Reforms Are Law: Understanding What Comes Next for Participants and Providers

Sweeping reforms to the National Disability Insurance Scheme (NDIS) have now passed through Parliament, setting in motion the government’s plan to make significant changes to the scheme. These changes aim to tighten access rules and reduce projected NDIS costs by an estimated A$37.8 billion over the next four years, potentially impacting around 160,000 current or future participants.

The new legislation introduces several key shifts in how people will access and receive support through the NDIS. These include altering how a person’s needs are assessed, introducing stricter rules for proving a disability is permanent, and allowing automated tools to help determine eligibility and support plans.

However, the specific details of how these changes will work in practice are still being developed. Many crucial aspects have been left to future rules, guidelines, assessment tools, and implementation processes that are not yet finalised.

When Will These Changes Happen?

The full impact of these reforms won’t be felt immediately.

A new Technical Advisory Group has been established to provide advice to the government on the specifics of these changes. This group is expected to complete much of its work by late 2026 and report to the government by March 2027.
The new eligibility criteria are set to take effect from January 2028.
For those already receiving NDIS support, reassessments based on the new criteria will begin progressively from 2028, over a three-year period. This means current participants will gradually transition to the new assessment framework.

New Ways to Assess NDIS Eligibility

A core part of the NDIS reforms is a shift in how a person’s eligibility and support needs are evaluated.

Focus on Functional Capacity, Not Just Diagnosis

The new system moves away from primarily relying on a person’s diagnosis to determine NDIS eligibility. Instead, the focus will be on a more consistent and robust assessment of a person’s “functional capacity.” This term refers to how much their disability affects their ability to perform daily activities and participate in life.

To access the NDIS, individuals will need to show they have a substantially reduced functional capacity that is also permanent. This means demonstrating how their disability significantly impacts essential daily tasks like dressing, washing, preparing meals, or working.

Standardised Definitions and Thresholds

The new assessment process will establish standardised definitions and specific thresholds for both functional capacity and permanence. The Technical Advisory Group will play a crucial role in advising on these criteria and methods.

While the aim is to create greater consistency in decision-making, standardisation also carries risks. Each person’s experience with disability is unique and deeply personal. The fairness of this new system will ultimately depend on how these tools are developed and implemented, and by whom they are administered.

Proving Your Disability is ‘Permanent’ Just Got Harder

Another significant change relates to how a disability is established as permanent for NDIS eligibility.

“All Appropriate Treatment Options”

The new legislation requires individuals to demonstrate they have already tried “all appropriate treatment options” that could improve or alleviate their impairment. These treatments must be widely accepted and publicly funded through schemes like Medicare, the Pharmaceutical Benefits Scheme (PBS), or public hospitals.

The Technical Advisory Group will now consider how this requirement should operate in practice. This is a complex area, as what counts as “all appropriate options” can be challenging to define. For example, a treatment might be practically out of reach due to unaffordability (even with partial public funding), unavailability in a person’s local area, or long waiting lists. In such cases, a person might not be deemed to have tried “all appropriate treatment,” despite reasons beyond their control.

There are also concerns that individuals might feel compelled to pursue specific treatments primarily for NDIS eligibility, rather than because they are the most suitable or effective choice for their personal circumstances.

Disability organisations have voiced worries about the potential impact of these rules on various groups, including autistic people, individuals with psychosocial disability (resulting from severe mental distress), and those with fluctuating, episodic, or cumulative disabilities. People living in regional and remote areas also often face significant barriers to accessing assessments and treatments. It’s crucial that if a treatment is not genuinely available, accessible, culturally safe, or in a person’s language, it should not be considered an option they simply “failed to pursue.”

The Rise of Automated Decisions in Your NDIS Journey

The NDIS reforms also introduce explicit legal authorisation for the use of automated decision-making processes within the scheme.

Learning from Past Mistakes?

The government has stated that it has learned lessons from the “Robodebt” episode, where an automated welfare recovery system led to significant hardship and distress. This new legislation aims to provide a clear legal basis for using similar technologies within the NDIS.

However, the legislation goes further than simply allowing automation. It permits computer programs to undertake almost any administrative action that involves “a discretion being exercised, an evaluative judgement being made, [or] a state of mind being formed.” This is an exceptionally broad scope, especially for decisions that have such high stakes for people’s lives and access to vital support.

Broad Powers, Few Safeguards

Despite this broad remit, there is a striking absence of detailed safeguards in the legislation. Automated systems can inadvertently reproduce existing inequalities if they are built on biased data or reflect historical patterns of decision-making that exclude certain groups. A system might appear neutral on the surface but can embed underlying assumptions and exclusions.

For instance, the Multicultural Women’s Alliance has highlighted that culturally and linguistically diverse women with disability often spend less on supports because appropriate services are either inaccessible or non-existent for them. They may also be less likely to have formal documentation of functional capacity in the required formats. These structural barriers should not be misinterpreted by an automated system as evidence of lower need.

It’s vital that any assessment tools are thoroughly tested for cultural and linguistic bias before they are introduced, and that ongoing testing continues once the system is operational.

What Happens Now? Your Voice Matters

While the NDIS legislation has passed, the most important details that will shape the scheme’s future are still being worked out. This makes the work of the Technical Advisory Group incredibly important. They hold the responsibility for advising on the practical application of these reforms.

Previous attempts to redesign disability assessment systems, both in Australia and overseas, offer valuable lessons on potential pitfalls and best practices. The government has also received extensive feedback and evidence through its parliamentary inquiry into the bill. This evidence provides clear warnings about the risks that must be addressed as the new system takes shape.

Perhaps most importantly, for these reforms to lead to fairer and more consistent decisions, people with disability and their representative organisations need to be central to this ongoing work. It’s not enough to be consulted only after key decisions have been made. Their lived experience and expertise are essential to ensuring the NDIS truly supports those it was designed for.

Next Steps for Participants and Providers:

Stay Informed: Keep an eye on announcements from the National Disability Insurance Agency (NDIA) and the Department of Social Services. Official NDIS channels will provide updates as new details emerge.
Engage with Advocacy: Connect with disability advocacy organisations. They are closely monitoring these developments and often provide opportunities for participants and providers to share their perspectives.
Understand Your Plan: If you are a current participant, familiarise yourself with your current NDIS plan and what supports you currently receive. This will be important when any future reassessments occur.
For Providers: Consider how these potential changes to eligibility and plan management might impact your service delivery models and client base in the coming years. Planning ahead will be crucial.

Hazel Chen

I work in marketing and communications for NDISLocal, helping connect NDIS participants, families, and providers with clear, useful information about the sector. I'm passionate about making the NDIS easier to understand and navigate, and about giving disability service providers a platform to reach the people who need them. If you'd like to know more about anything covered in this post, or you're a provider interested in being featured, feel free to get in touch.