Sustainability or Betrayal? The Real Conversation the NDIS Sector Needs to Have 

“The NDIS was built on a foundational promise: that Australians with permanent and significant disability would be supported not as a charity, but as a right. That promise is now being renegotiated — and the sector needs to be in the room.”

The National Disability Insurance Scheme Amendment (Securing the NDIS for Future Generations) Bill 2026 was introduced to Parliament on 14 May 2026. In its title, the government has already staked out its position: this is about sustainability — protecting the scheme for the long term.

It is a framing that is hard to argue with on the surface.

But framing is not analysis. And the sector — providers, participants, families and advocates — deserves something more rigorous than a marketing headline. Embedded in this reform package are some of the most significant structural changes to the NDIS since the scheme launched in 2013, and many of them raise questions that are not being asked loudly enough.

This is not an argument against reform. The case for change is real. But the difference between reform that strengthens the scheme and reform that simply shrinks it is not something we should leave to a ministerial talking point.

The Numbers Are Real — So Is the Complexity Behind Them

The government’s fiscal case for reform is grounded in figures that are genuinely striking. The NDIS now supports more than 760,000 Australians at a cost exceeding $50 billion annually — projected to exceed $70 billion by 2030. The reform package targets reducing participant numbers to around 600,000 by 2030, a reduction of 160,000 people.

These are not numbers to dismiss. A scheme growing at this rate is not operating as originally designed. The Productivity Commission’s early modelling anticipated costs of around $22 billion by 2019–20. Actual costs were nearly double that before the decade was out.

But the government’s public framing — that the NDIS has “drifted from its original intent” — requires more precision. Growth is not driven by one factor. It is driven by several, each with different moral weight.

What Is Actually Driving NDIS Cost Growth?

• Genuine unmet need — the scheme surfaced demand that always existed. 

• Market design failure — competition did not consistently drive quality or efficiency. 

• Fraud and exploitation — organised crime has targeted the scheme; NDIA has limited visibility over 90% of claims. 

• Plan inflation — inconsistent planning decisions have driven upward drift. 

• Scope creep — supports funded beyond disability-related need in some cases.

“Lumping these issues together as a single ‘sustainability problem’ — and resolving them by reducing participant numbers and plan sizes — is both imprecise and risky.”

The Market Model: A Promise That Didn’t Fully Deliver

The NDIS was designed as a market-based system for disability support. Funding went directly to participants, who could choose their own providers. Choice and control became the scheme’s defining philosophy.

For many, it was transformative.

But the NDIS Review was clear: pure competition did not consistently produce quality. In many regions, competition didn’t exist. Information asymmetry meant choice was often theoretical. And with price caps in place, most providers charged the maximum, with limited incentive to innovate.

The market model did not fail because competition is flawed. It failed because the conditions required for competition — information, alternatives, active stewardship — were not in place.

This matters. Moving from a market model to a commissioned model for support coordination, plan management and eventually home and living supports is not just a cost measure. It is a philosophical shift. It deserves debate, not quiet inclusion in a sustainability package.

What the Bill Actually Does — In Plain Terms

The legislation is long. The fact sheet is short. The gap between them is significant.

Key changes:

1. Ministerial power to reset budgets across entire support categories Part 4 allows the Minister to reduce funding for groups of supports through a single determination — not individual assessment.

2. Plans will have legislated end dates; unspent funds will not carry over This addresses some integrity issues but removes a buffer relied on by participants with fluctuating needs.

3. Access will shift from diagnosis to functional capacity assessment Sensible in principle — but the framework does not commence until January 2028.

4. Fraud and compliance measures will be strengthened New digital claims systems, record-keeping requirements and conflict-of-interest rules are largely the right calls.

Changes Already in Effect or Imminent

• 1 October 2026 — Social and community participation budgets begin progressive reduction 

• 1 October 2026 — Unspent funds no longer carry over 

• July 2026 — New digital claims and payments system begins rolling out 

• July 2026 — Mandatory registration for SIL providers 

• Early 2027 — Transition to functional capacity assessments 

• 1 October 2027 — Commissioned plan management model begins (6-month transition) 

• 1 July 2028 — Commissioned support coordination begins

The Sequencing Problem — And Why It Matters

“The most legitimate criticism of the reform package is not that it changes things — but that it removes supports before replacements exist.”

Social and community participation budgets will be reduced from October 2026. The Foundational Supports system — the alternative intended to absorb people who no longer qualify — is not yet designed, funded at scale or operational in any jurisdiction.

Functional capacity assessments will not commence until January 2028. Children redirected from the NDIS in 2027 will encounter early childhood systems that are not resourced to receive them.

Reducing NDIS funding does not reduce disability-related need. It shifts the cost — onto individuals, families and already stretched public systems.

Advocacy for Inclusion put it plainly: projected savings come overwhelmingly from cutting supports and tightening access, not from fraud measures alone.

The government’s own modelling confirms that hundreds of thousands of people will be removed from or denied access to the scheme by 2031. That is not inherently wrong — if adequately resourced alternatives exist. Evidence that they will exist on time is thin.

What the Sector Can Learn from Aged Care

Aged care went through its own structural reckoning — reviews, a Royal Commission, and a redesign of governance and quality systems.

The lessons are relevant:

• Market-based care does not self-correct. It requires active stewardship. • Transparent pricing, quality data and consumer information matter. • Workforce is the central variable — without enough skilled workers, systems fail.

The NDIS faces the same workforce challenge. SCHADS changes are part of that picture. So is the reality that disability support work is skilled, demanding and undervalued.

The Questions the Sector Should Be Demanding Answers To

This is not a call to oppose reform. It is a call to engage with it rigorously.

The sector should be asking:

• When will Foundational Supports be operational — not announced, but operational — in each jurisdiction? 

• What happens to people removed from the NDIS before those services exist? 

• How will functional capacity assessments be validated, and what review rights will participants have? 

 What is the government’s position if the ASU’s 35% wage claim succeeds? 

• What does your organisation look like in 2028 under a commissioned model?

“These are not abstract questions. They determine whether reform strengthens the scheme or simply reduces it.”

The Honest Assessment

The NDIS at $50 billion and growing is not sustainable in its current form. True. The market model has not delivered consistent quality. True. Fraud has harmed participants and the scheme’s integrity. Also true. Reform is necessary.

But reform done well looks different from reform done fast.

It is co-designed. It is sequenced. It is honest about trade-offs. It is accountable to outcomes, not just savings.

The disability sector has learned to be sceptical of promises about what will replace what is taken away. That scepticism is not cynicism — it is experience.

The conversation the sector needs now is not “sustainability or betrayal” as a binary. It is: how do we ensure this reform lands in a way that keeps the scheme’s foundational promise?

“Implementation is where the real decisions happen — and where advisory expertise matters most.”

About the Author

Jeanette Larsen is a respected disability sector leader with deep expertise in SCHADS, workforce strategy, NDIS operations and provider sustainability. With a background spanning finance, HR, business leadership and operational management, she brings a clear, grounded understanding of how policy, awards and workforce pressures play out in real organisations. Jeanette writes about SCHADS, workforce design, governance and the practical realities facing disability providers navigating complexity, compliance and change.

Disclaimer: This article reflects general insights and sector commentary. It is not legal or industrial relations advice. Organisations should seek independent guidance before making decisions about SCHADS, workforce arrangements or compliance.