The national disability insurance scheme, one of Australia's most ambitious social schemes, is undergoing a significant overhaul as the Albanese government looks to rein in costs and preserve its social licence for future generations.
The Gillard-era program now supports more than 770,000 Australians with disability and is expected to cost $54bn this financial year after a series of imminent changes. Without any intervention, the government forecast the NDIS would cost the budget more than $100bn by the mid-2030s. The bill aims to cut the number of participants to around 600,000.
On Tuesday, the government agreed to 63 amendments in order to pass it through the Senate.
Why do the government say these NDIS changes are important?
First, let's begin with why the government says these changes are needed.
The NDIS ministers, Mark Butler and Jenny McAllister, have said the scheme has become larger than ever envisaged and sensible reforms are necessary to return it to its original plan.
The Labor ministers are referring to initial estimates from the Productivity Commission in 2011 forecasting the NDIS would support around 410,000 people with permanent and significant disabilities, and cost about $13.5bn a year.
A second, more basic system of support – known as tier 2 – was initially recommended for the roughly four million other disabled Australians who wouldn't meet the criteria for personalised packages.
Fifteen years later, the NDIS now supports more than 770,000 participants and costs more than $50bn a year. It is the second-largest social program after the aged pension.
McAllister said on Tuesday night: "The government's concern is that a scheme that has too much fraud; is much larger than it was ever intended to be; is projected to cost more than $100bn a year by the middle of next decade; and doesn't always deliver the quality of service that we would expect for people with disability is a scheme that is at risk of losing its social licence."
What will the last-minute NDIS changes mean for me?
To pass the Senate, the government needed to strike a deal with the Coalition or the Greens. With the latter ruled out, the government introduced 63 amendments on Tuesday afternoon to pass the bill by the evening.
One of the major criticisms from the Greens, crossbenchers and disability advocates related to a ministerial power to apply broad reductions in funding for certain categories regardless of a person's circumstances. For example, the government has said it will slash every participant's social and community participation budgets – funding typically used to pay for carers to accompany participants to job or social programs – by 50% from October.
A government amendment on Tuesday introduced an avenue for participants with high support needs to be able to apply for a plan variation if their funding no longer covers 24/7 care as a result of the funding reduction. This means those impacted can apply for a plan variation within 90 days of their plan being reassessed or renewed.
Other amendments include clarifying the level of care expected from a parent to determine whether additional care should be provided through the NDIS; allowing prospective participants to continue receiving other compensation while awaiting an access decision; ensuring more transparency from the national disability insurance agency regarding debt recovery; and defining what undertaking "all appropriate treatment" prior to applying for the NDIS means for applicants.
There will also be new criminal and civil charges for fraud and integrity offences. Those include banning kickbacks used to influence choosing certain providers over others as well as providing misleading information or intentionally destroying records.
What's next now the NDIS bill has passed?
Next Tuesday, within a week of the bill's passing, participants will only be able to request a budget reassessment where there has been a "significant and ongoing" change. NDIS participants will also be required to keep records of services claimed for a period of three years.
From October, the Thriving Kids program for children under 9 with mild and moderate support needs for autism and developmental delay will begin rolling out in states and territories to divert them from the NDIS.
All states and territories, with the exception of Queensland, have announced how those programs will be run and where they will be available.
Also from October, the 50% cut to social and participation budgets will be applied to any participants having their plan renewed or reassessed.
From January 2028, a new eligibility criteria will be introduced based on a functional capacity test. The test has not yet been created but will be developed by a technical advisory group. It is expected to remove NDIS access for 241,000 participants by 2031.
