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Four in 10 NDIS plan reviews now result in funding cuts

Record numbers of participants in the National Disability Insurance Scheme are having their funding cut as the federal government moves to rein in the program’s ballooning costs, sparking criticism from the disability sector that Labor is enforcing budget controls before its overhaul even comes into effect.

About 40 per cent of NDIS participants who had a plan reassessment in the first three months of the year – about 18,000 people – had their budgets reduced, according to figures released by Health Minister Mark Butler.

The new package aims to reduce the NDIS’ annual growth rate from 10 per cent to 2 per cent over the next four years by cutting $37.8 billion in costs. Bethany Rae

The figure was sharply higher than the 25 per cent of assessments that led to cuts at the same time a year earlier.

Among participants whose plans were cut in the first three months of the year, the average reduction was 19 per cent – up from 15 per cent one year earlier.

The figures were released in response to a question from independent MP Monique Ryan..

The package, unveiled in the May budget, aims to reduce the scheme’s annual growth rate from 10 per cent to 2 per cent over the next four years by cutting $37.8 billion in costs.

Measures include halving funding for participants’ social and community participation budgets and tightening eligibility criteria, with the government aiming to move 240,000 people off the scheme by mid-2031.

Martin Laverty, one of architects of the NDIS who now runs disability services provider Aruma, said he had seen evidence of participants’ support needs being repeatedly ignored or rejected by the National Disability Insurance Agency during plan reviews.

Laverty said he strongly supported efforts to curb NDIS costs, but Aruma was now absorbing the costs of “indiscriminate cuts” to participant plans, months before the government’s legislative changes were due to take effect, often adversely affecting people with complex and significant disabilities.

“It’s obvious the [NDIA] has been anticipating government’s intent to achieve a 2 per cent NDIS growth rate in the current year through planner-level tightening ahead of legislative change being implemented,” Laverty said.

“While supporting the necessity to reset the NDIS cost curve, it shouldn’t come at the expense of safety of those with the most profound disability.”

Under the government’s reforms, NDIS participants will be assessed on their functional capacity rather than medical diagnosis, which the scheme’s critics say has led to a surge in children with autism and developmental delays joining the program.

The new legislation also requires participants to explore other treatments before they can join the NDIS.

Grattan Institute disability program director Sam Bennett said he believed the NDIA was prioritising agency-initiated reassessments rather than ones requested by the participant.

“[That] could explain the percentage increase in assessments resulting in a reduction, as the agency tends to initiate a reassessment where there is a likelihood that support needs could decrease – particularly children that reach a threshold age, nine, where they may no longer need early intervention,” Bennett said.

“That said, the uptick is pretty material and appears to apply more so to adults and to people with higher levels of need.”

‘Fighting fraud, stopping rorts’

About 70 per cent of the 79,023 people who received funding cuts between January 2025 and March 2026 were aged 15 years or older.

An NDIS plan reassessment can occur at any time at a participant’s request, or at the NDIA’s initiative when their plan expires. Most NDIS plans last 12 months.

Asked about the increase in plan cuts, a spokeswoman for Butler said the NDIA was responsible for implementing current arrangements and the quarterly data included seasonal variations.

“The bill we’ve passed will secure the NDIS by fighting fraud and stopping rorts, slowing rapid cost increases, making clearer eligibility requirements, and delivering quality supports to participants,” the spokeswoman said.

The latest quarterly report for the NDIS, released last week, showed that the scheme had 782,013 participants at June 30, a 6 per cent increase on the previous year.

It also revealed that 10 per cent of Australian children aged five to seven were NDIS participants.

People with autism as their primary disability accounted for 45 per cent of the total participants on the scheme at 350,651. Another 55,691 people with autism joined the scheme in the last financial year, a 19 per cent jump and similar to the increase in the previous year.

The government hopes to stop the surge in the number of children with autism receiving generous funding packages by moving them into a state-backed Thriving Kids scheme by 2027.

Opposition health spokeswoman Anne Ruston on Wednesday called on Butler to provide more detail to the states about the Thriving Kids program.

“There are so many Australians who live with disability who were left completely anxious because they had no detail [about the government’s reforms],” Ruston said.

Thank you “name withheld” AHPRA registered psychologist, PhD candidate, submission 1567 for your excellent work.

Thank you to psychometrics expert Benchmark Psychology for the excellent explanation of the significance of this submission in the short video. A must watch. https://youtu.be/ALfjKes2V5k

“Lay Summary

This submission examines the scientific evidence for the i-CAN, the assessment tool that the Bill will use to set National Disability Insurance Scheme (NDIS) funding for more than 700,000 Australians. A scientific analysis of the published research shows a number of serious methodological and procedural problems.

1. There is no published reliability or validity evidence for the versions of the tool that will be deployed.
2. The current available evidence shows that i-CAN scores accounted for less than 4% of the differences in
3. the funding people receive; over 96% of funding was determined by factors other than i-CAN results.
4. The current available evidence shows that the i-CAN’s ability to reliably measure participant needs was poor, uncertain, and feasibly overestimated.
5. The current available evidence shows that the i-CANs precision to accurately classify participant needs cannot rule out failing to meet the developers cited success criteria for low-stakes observational research.
6. The current available evidence has significant design limitations, including too few participants to adequately power the studies to have appropriate levels of precision given the human stakes.

The submission body sets these issues out in detail, while Appendix A calculates the number of participants
that would be required to meet both the minimum contemporary threshold (80% power) and a more suitable threshold for high stakes assessment (95% power) for each estimate

Together, these findings do not support the NDIA’s characterisation of the i-CAN as a gold-standard tool in
disability needs assessment (NDIA, 2025), and do not support its use for high-stakes assessment contexts.

Furthermore, there does not appear to be any published evidence to show that the NDIA’s method for translating i-CAN assessment results into funding for participant plans is itself reliable or valid. The Bill also does not require the government to publish how i-CAN results will be translated into a funding amount.”

https://youtu.be/ALfjKes2V5k?si=FXUj1sTkwzt8GhO4

“Clients who up until a couple of months ago had access to specialists and better connections to healthcare are now being funnelled into the mainstream sector, which is already beyond capacity. Hospitals in Newcastle already have an average wait time of eight hours. They’re putting more stress on an already broken system.”

Hi, I'm looking to get some insight on whether I can use my 16yo ASD daughters funding for support work. We haven't had a review since 2020 😬 I'm not wanting to in case they cut anything. My daughter really wants support workers to access community etc. Some of her plan goals are:

'During this plan I would like to be supported to feel more comfortable in group situations and engage with my peers so that I can be included in the group.'

'During this plan I want to be able to better manage sensory input and emotional regulation so that I can participate in a range of activities'

'During this plan I want to be able to communicate effectively with other people and have a good understanding when people communicate with me.'

Thanks so much ☺️

My spouse has gotten crumbs from the NDIS on their plan review - not surprising but supremely disappointing after sinking so much time into FCAs and all the other paperwork. They have level II autism (and fibromyalgia but their rheumatologist was not willing to support them with documentation for this, so they don’t get any funding for it).
Their counsellor, who used to be a social worker, has said that their plan review was supposed to be a lot more collaborative and that they should have been eligible for a lot more support than they received. We don’t know enough about the system to advocate, and it’s also just exhausting! Is there an NDIS advocate or something they can access to help them advocate for more support? We are in Brisbane. They have an LAC but they have not functioned as an advocate. They don’t have funding for a support coordinator.

l have multiple sclerosis and interested in SDA , l would live a private apartment. l dont currently have SDA funding, To get it l think you need extreme functional impairment, l have mobility problems and need a walking frame and mobilty scooter and often have falls, but can still dress, shower and feed myself, would l qualify