The National Disability Insurance Scheme is facing its most significant overhaul since it launched. Health Minister Mark Butler announced in April 2026 a package of reforms aimed at saving the federal budget $35 billion over the next decade, tightening eligibility, reducing plan budgets, and cracking down on fraud and non-compliant providers.
If you are an NDIS participant, a carer, a support worker, or a provider, this guide covers everything that has been confirmed so far and what it means for you. For a more focused look at what these changes mean for SDA housing and smart home technology, read our companion article: How the 2026 NDIS Changes Affect SDA Housing and Smart Home Funding.
Why Is the NDIS Being Overhauled?
The NDIS was originally designed to support around 410,000 Australians living with permanent and significant disability. It now supports more than 750,000 participants and costs more than $50 billion per year, growing at roughly 10 per cent annually.
The government's stated goal is to reduce participant numbers to approximately 600,000, slow annual cost growth, and refocus the scheme on people with the highest support needs. Fraud and non-compliance have also reportedly cost the scheme billions of dollars, making provider accountability a central part of the reforms.
The NDIS Review, led by Professor Bruce Bonyhady and Lisa Paul, published its final report in 2023 and recommended sweeping changes to sustainability and eligibility — the 2026 legislation builds directly on those recommendations.
What Changes Are Planned?
The government will introduce the National Disability Insurance Scheme Amendment (Securing the NDIS for Future Generations) Bill after the 2026-27 Federal Budget is handed down in May. Legislated changes are not expected to take effect until July 2026 at the earliest.
The confirmed changes include:
New Eligibility Assessments
Eligibility will no longer be determined by a diagnosis list. Instead, a new functional assessment tool will be used to evaluate how much support a person genuinely needs in daily life.
The new assessment tool is being developed and will be introduced in January 2028. It will be used to reassess all existing participants as well as evaluate new applicants. The government estimates this will result in approximately 160,000 people being removed from the NDIS — primarily those with lower support needs or higher functional capacity.
Reduced Plan Budgets
The government aims to cut the average annual plan spend from approximately $31,000 to around $26,000, a reduction of roughly $5,000 per participant per year.
Cuts to the social and community participation category are specifically flagged. This is a significant funding line for many participants covering transport, group activities, and community access supports.
End of Unspent Funds Roll-Over
Under the current system, unspent NDIS funds roll over from one plan period to the next. This will end under the new rules. Participants will need to use their allocated budget within the plan period or lose the unspent portion. If you have unspent funds earmarked for assistive technology or home modifications, now is the time to move forward with those purchases.
Fewer Plan Reassessments
While new participants will be assessed under stricter eligibility criteria, the frequency of plan reassessments for existing participants will be reduced. This is intended to reduce administrative burden on the NDIA and participants who have stable, long-term conditions.
New Digital Payment System
A new digital payment system will be introduced to improve transparency and reduce fraud. Details on how this will work in practice have not yet been released. The NDIS Quality and Safeguards Commission will continue to oversee provider compliance alongside the new payment controls.
Expanded Mandatory Provider Registration
Currently, many NDIS providers operate as unregistered providers, which means they are not subject to the same oversight as registered providers. The reforms will expand the categories of supports that require mandatory registration.
Higher-risk activities will require registration, including:
- Personal care
- Daily living supports
- Supports provided in closed settings
Not all unregistered providers will be required to register. As Minister Butler noted, low-risk supports such as retail chemist purchases do not require the same level of oversight as close personal care of vulnerable people.
For a full breakdown of what the NDIS will and will not fund under the current rules, see our guide: NDIS Supports — The In and Out List Explained.
Who Will Be Removed From the NDIS?
The 160,000 participants expected to lose eligibility are primarily those who qualified through the previous diagnosis list rather than through demonstrated high support needs. People with lower support needs or higher functional capacity are the target cohort for removal.
People with autism are expected to be disproportionately affected. Autism participants currently account for nearly half of all NDIS participants, and many who qualified under the diagnosis-based eligibility rules will not meet the new functional assessment threshold.
What About Children With Autism?
Children with autism — particularly those described as having "mild to moderate" autism or developmental delays — are likely to be moved off the NDIS and directed toward the federal government's new Thriving Kids program, a $4 billion state-run initiative announced in 2025.
However, the program is not yet operational, and Queensland has already declined to sign on to the agreement. Minister Butler has not provided a precise definition of "mild to moderate" autism, leaving significant uncertainty for families.
The government proposed that children in this category would be transitioned by July 2027.
Families navigating these changes should seek early support from a support coordinator, who can help document a child's functional support needs ahead of any reassessment.
How Will the Changes Affect Support Workers?
Support workers will feel the impact of these changes in several ways:
- Provider registration changes may require some employers to register, which could affect how support workers are engaged and what oversight applies to their work.
- Reduced plan budgets mean participants may not be able to afford the same hours or services from support workers.
- Cuts to social and community participation funding may reduce the types of activities support workers can be paid to facilitate.
The NDIS Quality and Safeguards Commission has resources specifically for support workers navigating registration and compliance requirements.
What Is Staying the Same?
The NDIS itself is not being abolished. Participants with high and complex support needs — including those using Specialist Disability Accommodation (SDA), complex assistive technology, or significant daily living supports — are not the target of these eligibility reforms.
The core principle of the NDIS, providing funding so people with disability can access the supports they need to live independently, remains intact. For guidance on what can still be funded through Capital Supports and Assistive Technology, our detailed guide covers the current rules and what to expect under the reforms.
When Do the Changes Take Effect?
| Date | What Happens | |---|---| | May 2026 | Government introduces NDIS Amendment Bill following the Federal Budget | | July 2026 (earliest) | Some changes begin taking effect | | July 2027 | Proposed transition of children with mild to moderate autism to Thriving Kids program | | January 2028 | New functional assessment tool introduced for eligibility reviews |
Further reforms beyond this initial package have also been flagged by the government. You can track the progress of the legislation on the Australian Parliament House website.
What Should Participants Do Now?
If you are currently on the NDIS, there is no immediate action required. Eligibility reassessments under the new functional assessment tool will not begin until January 2028. Your current plan remains valid in the meantime.
However, it is a good time to:
- Document your support needs clearly — a functional assessment looks at what you need to do in daily life, not just your diagnosis. An OT assessment can help establish this evidence base
- Talk to your support coordinator about how the changes may affect your plan
- Review your plan spending given that unspent funds will no longer roll over once the new rules take effect
- Know your rights — if a decision goes against you, our guide to appealing an NDIS decision explains the process
- Stay informed via the NDIS website and official announcements following the May Budget
At Innogreen, we will continue to monitor these changes and update our clients and partners as legislation progresses. If you have questions about how the NDIS changes may affect your SDA property or smart home supports, contact our team.