NDIS Eligibility Changes: Proposed Reforms Explained

The Australian Government has announced significant proposed reforms to the National Disability Insurance Scheme (NDIS), marking one of the biggest changes since the scheme began. The reforms aim to improve the long-term sustainability of the NDIS while ensuring support reaches people with the highest and most complex disability needs.

If approved, these changes will affect how people qualify for the NDIS, how providers operate, and how funding is managed. While many details are still being developed, understanding the proposed direction can help participants, families, and providers prepare for the years ahead.

Why Is the Government Reforming the NDIS?

Since its launch in 2013, the NDIS has expanded rapidly. Today, it supports hundreds of thousands of Australians and represents one of the country’s largest public expenditure programs.

According to the government, the current rate of growth is financially unsustainable. Without reforms, the number of participants and overall program costs are expected to continue increasing significantly over the coming years. The proposed overhaul is intended to:

• Keep the NDIS financially sustainable.
• Ensure funding reaches people with the greatest functional support needs.
• Reduce fraud and misuse of public funds.
• Improve consistency and fairness in eligibility assessments.
• Strengthen community-based disability support services.

The government has indicated that these reforms are designed to protect the NDIS for future generations rather than reduce support for people who genuinely require intensive assistance.

The Biggest Change: Functional Capacity Will Replace Diagnosis-Based Access

One of the most significant proposed reforms is a new approach to determining eligibility.

Currently, many applicants qualify for the NDIS based largely on their medical diagnosis. Under the proposed system, eligibility would instead focus primarily on how a person’s disability affects their everyday functioning.

Assessments would consider factors such as:

• Personal care
• Communication
• Mobility
• Learning
• Independent living
• Social participation
• Daily decision-making

This means two people with the same medical condition may receive different outcomes depending on how their disability impacts their daily lives.

The government believes this approach will create a fairer and more consistent assessment process. However, disability advocates have raised concerns about how these assessments will be conducted and whether they will accurately reflect individual needs.

How Many People Could Be Affected?

Government modelling suggests the reforms could reduce total NDIS participation from approximately 760,000 people today to around 600,000 by the end of the decade.

This does not necessarily mean existing participants will immediately lose support. Instead:

• New applicants would be assessed under the revised eligibility framework once it is introduced.
• Existing participants may be reassessed as their plans are reviewed.
• People who no longer meet the new eligibility criteria may transition to alternative disability support programs.

The exact implementation process is still under development.

What Happens If Someone Is No Longer Eligible?

The government has stated that individuals who no longer qualify for the NDIS will not simply be left without assistance.

Instead, many people may receive support through new “foundational supports” delivered by state and territory governments. These programs are expected to provide services such as:

• Early intervention
• Community participation
• Therapy services
• Everyday disability supports
• Family assistance

Many aspects of these programs are still being negotiated between federal and state governments.

Stronger Rules for NDIS Providers

The reforms also include stricter regulation of service providers.

Higher-risk disability services—including personal care and supports delivered in residential or closed settings—would require mandatory registration.

The objectives include:

• Improving participant safety
• Increasing accountability
• Reducing fraudulent providers
• Raising service quality across the sector

Registered providers may also face additional compliance and reporting requirements.

New Digital Payment System

Another major proposal is the introduction of a digital payment system for NDIS claims.

Currently, many claims are processed without detailed supporting evidence. The government argues this creates opportunities for fraud and misuse of taxpayer funds.

The proposed payment system aims to:

• Increase transparency
• Improve claim verification
• Detect suspicious transactions
• Protect participant funding
• Reduce organised fraud

These measures are intended to improve confidence in how public money is managed.

Community Participation Funding Under Review

The government has also announced plans to review funding for social and community participation supports.

Officials argue spending in this area has increased substantially over recent years and should be better aligned with participant outcomes.

The proposal seeks to balance meaningful community inclusion while ensuring funding remains sustainable over the long term.

Concerns Raised by Disability Organisations

While many experts agree the NDIS needs reform, disability organisations have expressed several concerns.

Common issues raised include:

• Lack of detail about the new assessment model.
• Uncertainty for current participants.
• Risk that some people with genuine needs could lose access.
• Questions about whether state-based services will provide equivalent support.
• Need for greater consultation with people living with disability.

Many advocacy groups are calling for the government to work closely with participants before finalising the reforms.

When Will the Changes Begin?

The proposed reforms are expected to be introduced through legislation over the coming months.

According to the government’s current timeline:

• New legislation will establish the legal framework.
• Eligibility assessment tools will continue to be developed.
• Broader implementation is expected from 2028.
• Existing participants may transition gradually during future plan reviews.

The timeline may change as legislation progresses through Parliament.

What Should Participants Do Now?

If you currently receive NDIS funding, there is no need to make immediate changes.

However, it is sensible to:

• Keep your medical and therapy reports up to date.
• Document how your disability affects daily living.
• Stay informed about government announcements.
• Speak with your support coordinator or provider if you have concerns.
• Review your goals before future plan reassessments.

Being prepared can make future reviews smoother if the proposed eligibility framework is introduced.

Final Thoughts

The proposed NDIS reforms represent a major shift in Australia’s disability support system. Moving from diagnosis-based access to functional assessments, introducing stronger provider regulation, and improving financial oversight are all intended to create a more sustainable scheme.

At the same time, many participants and disability organisations are seeking greater clarity about how these reforms will work in practice. As the legislation progresses, staying informed and maintaining up-to-date documentation will be essential for participants, families, and providers alike.