NDIS Set for Major Overhaul as Government Moves to Curb Costs, Tighten Eligibility and Restore “Social Licence”

Canberra — The Federal Government has unveiled sweeping reforms to the National Disability Insurance Scheme (NDIS), warning that without urgent intervention the program risks “not being there in the future for the Australians who need it most.”
Addressing the National Press Club on Wednesday, Minister for Health and Ageing and Minister for Disability and the NDIS, Mark Butler MP, announced a far-reaching package aimed at slowing cost growth, tightening eligibility rules, and cracking down on fraud and misuse within the scheme.

Butler said the NDIS — one of Australia’s largest social programs — remained a “great Labor reform” and a “human rights achievement,” but warned it had become financially unsustainable and increasingly vulnerable to exploitation.
“We can’t afford for the NDIS to continue growing at its present rate. But far more importantly, we can’t afford for the NDIS to fail,” he said.

The Minister revealed that independent advice from the Scheme Actuary had identified a $13 billion blowout over the next four years, driven by rising demand, reassessments and structural weaknesses in the system.

He said fraud and misuse had become widespread, with criminal groups, “shonks and rorters,” exploiting gaps in oversight.
According to Butler, the government’s Fraud Fusion Taskforce has identified multiple “design failures” making the scheme vulnerable to abuse, with the current system lacking key integrity safeguards.

The government will introduce legislation in the upcoming parliamentary sitting to address what Butler described as “runaway inflation” in plan costs and service claims.

A major reform will overhaul eligibility rules, replacing diagnosis-based access with standardised functional capacity assessments.
The changes are expected to reduce the number of participants from a projected 900,000 to around 600,000 by the end of the decade.

Butler said the aim was to ensure the scheme returned to its original intent — supporting Australians with “significant and permanent disability.”

He acknowledged the shift would be controversial but argued it was necessary for sustainability.
“Now that’s not their fault. They’ve been told this is the only program available. It is our responsibility to make sure they are pointed to the right place,” he said.

Under the proposed reforms, NDIS spending growth will be reduced from current levels of around 8 per cent to between 5 and 6 per cent, with long-term growth stabilising at about 5 per cent from 2030.
Social and community participation funding — one of the fastest-growing parts of the scheme — will be reset to previous levels, reducing average participant budgets from about $31,000 to $26,000 over two years.

The government also plans to reduce spending on intermediaries by 30 per cent and introduce a shortlist of approved providers.
At the same time, around $200 million will be allocated to establish an Inclusive Communities Fund to rebuild community-based support services outside the NDIS.

The reforms will also introduce stricter controls on providers and claims, including expanded mandatory registration for higher-risk services such as personal care and supported independent living.

The government plans to shift to a digital payment system to improve transparency, after reports that up to 600,000 claims are processed daily without sufficient evidence checks.

Butler said the current system had “no visibility” over most transactions and had been exploited by organised crime networks.
The Australian Criminal Intelligence Commission, he said, had identified cash kickbacks, intimidation and financial fraud involving vulnerable participants.

The Minister also cited declining public confidence in the scheme, saying recent research showed that while most Australians support the NDIS, many believe it is “too large and struggling with dodgy providers.”
More than six in ten Australians now reportedly believe the system is “broken,” he said.

The announcement also included changes to aged care funding, including the redirection of subsidies previously allocated to private health insurance rebates for older Australians into aged care services.
The government will invest an additional $3 billion in aged care infrastructure and services, including dementia care units and home support programs.
Butler argued the decision was necessary to restore “intergenerational equity,” a theme that also underpinned broader reforms across aged care and disability policy.

“A race against time”

Despite the scale of the reforms, Butler insisted the NDIS would remain a cornerstone of Australia’s social policy.
“If we act now, we can safeguard and strengthen it. If we wait, the social licence will be lost,” he warned.
He said the government, including Ministers Jenny McAllister, Sam Rae, Katy Gallagher, as well as former minister Bill Shorten and current minister Amanda Rishworth, had worked to stabilise the scheme since taking office.

Butler said the reforms would ensure the NDIS remains viable “like Medicare” for future generations, while restoring trust and financial sustainability.

The legislation is expected to be introduced during the upcoming Budget sittings of Parliament.

The Federal Government has unveiled sweeping reforms to the National Disability Insurance Scheme (NDIS), warning that without urgent intervention the program risks “not being there in the future for the Australians who need it most.”
Addressing the National Press Club on Wednesday, Minister for Health and Ageing and Minister for Disability and the NDIS, Mark Butler MP, announced a far-reaching package aimed at slowing cost growth, tightening eligibility rules, and cracking down on fraud and misuse within the scheme.

Butler said the NDIS — one of Australia’s largest social programs — remained a “great Labor reform” and a “human rights achievement,” but warned it had become financially unsustainable and increasingly vulnerable to exploitation.
“We can’t afford for the NDIS to continue growing at its present rate. But far more importantly, we can’t afford for the NDIS to fail,” he said.

The Minister revealed that independent advice from the Scheme Actuary had identified a $13 billion blowout over the next four years, driven by rising demand, reassessments and structural weaknesses in the system.

He said fraud and misuse had become widespread, with criminal groups, “shonks and rorters,” exploiting gaps in oversight.
According to Butler, the government’s Fraud Fusion Taskforce has identified multiple “design failures” making the scheme vulnerable to abuse, with the current system lacking key integrity safeguards.

The government will introduce legislation in the upcoming parliamentary sitting to address what Butler described as “runaway inflation” in plan costs and service claims.
A major reform will overhaul eligibility rules, replacing diagnosis-based access with standardised functional capacity assessments.
The changes are expected to reduce the number of participants from a projected 900,000 to around 600,000 by the end of the decade.

Butler said the aim was to ensure the scheme returned to its original intent — supporting Australians with “significant and permanent disability.”

He acknowledged the shift would be controversial but argued it was necessary for sustainability.
“Now that’s not their fault. They’ve been told this is the only program available. It is our responsibility to make sure they are pointed to the right place,” he said.

Under the proposed reforms, NDIS spending growth will be reduced from current levels of around 8 per cent to between 5 and 6 per cent, with long-term growth stabilising at about 5 per cent from 2030.

Social and community participation funding — one of the fastest-growing parts of the scheme — will be reset to previous levels, reducing average participant budgets from about $31,000 to $26,000 over two years.

The government also plans to reduce spending on intermediaries by 30 per cent and introduce a shortlist of approved providers.
At the same time, around $200 million will be allocated to establish an Inclusive Communities Fund to rebuild community-based support services outside the NDIS.

The reforms will also introduce stricter controls on providers and claims, including expanded mandatory registration for higher-risk services such as personal care and supported independent living.

The government plans to shift to a digital payment system to improve transparency, after reports that up to 600,000 claims are processed daily without sufficient evidence checks.

Butler said the current system had “no visibility” over most transactions and had been exploited by organised crime networks.
The Australian Criminal Intelligence Commission, he said, had identified cash kickbacks, intimidation and financial fraud involving vulnerable participants.
Community confidence “eroding”

The Minister also cited declining public confidence in the scheme, saying recent research showed that while most Australians support the NDIS, many believe it is “too large and struggling with dodgy providers.”

More than six in ten Australians now reportedly believe the system is “broken,” he said.

The announcement also included changes to aged care funding, including the redirection of subsidies previously allocated to private health insurance rebates for older Australians into aged care services.

The government will invest an additional $3 billion in aged care infrastructure and services, including dementia care units and home support programs.

Butler argued the decision was necessary to restore “intergenerational equity,” a theme that also underpinned broader reforms across aged care and disability policy.

Despite the scale of the reforms, Butler insisted the NDIS would remain a cornerstone of Australia’s social policy.
“If we act now, we can safeguard and strengthen it. If we wait, the social licence will be lost,” he warned.

He said the government, including Ministers Jenny McAllister, Sam Rae, Katy Gallagher, as well as former minister Bill Shorten and current minister Amanda Rishworth, had worked to stabilise the scheme since taking office.

Butler said the reforms would ensure the NDIS remains viable “like Medicare” for future generations, while restoring trust and financial sustainability.
The legislation is expected to be introduced during the upcoming Budget sittings of Parliament.