Disability services outside to phase in from mid-2025

Labor will begin implementing its key strategy to slash spending on the NDIS just 12 months before it’s due to have halved the growth of the $40bn scheme.

Labor will begin implementing its key strategy to slash spending on the National Disability Insurance Scheme just 12 months before it is due to have halved the growth of the $40bn scheme.

Labor will begin implementing its key strategy to slash spending on the National Disability Insurance Scheme just 12 months before it is due to have halved the growth of the $40bn scheme, prompting concerns the new stream of health and education services outside the NDIS will not be ready in time.

Anthony Albanese committed to launching a separate tier of “foundational supports” to serve Australians with less profound disabilities at national cabinet last year, revealing the additional services would be set up through a 50/50 funding arrangement with states and territories.

The strategy is a key pillar of the government’s plan to halve the growth of the NDIS by the middle of 2026, with hopes the extra ­services will keep annual growth of the scheme to 8 per cent a year by ensuring the NDIS is no longer “the only lifeboat in the ocean”.

Social Services Minister Amanda Rishworth. Picture: NCA NewsWire/Gaye Gerard

As advocates call for clarity over the second tier of services in next week’s budget, The Weekend Australian can reveal the foundational supports strategy – captained by Social Services Minister Amanda Rishworth – will be released in the second half of this year and begin a “phased implementation” from July 2025.

Modelling of the cost to states and the commonwealth is currently under way, with treasurers tasked “with oversighting foundational supports costs” through the Council on Federal Financial Relations. And the First Secretaries Group – which is chaired by the Prime Minister and cabinet department secretary and includes secretaries from premiers’ departments – will be responsible for overseeing the development of foundational supports.

The Weekend Australian understands treasurers engaged in “a preliminary discussion” about foundational supports at a March 15 meeting.

The halving of the scheme’s growth is hoped to reduce NDIS costs by $15.3bn over four years, $59bn over seven years from 2027, and $74bn over the decade.

Attempts by The Weekend Australian to access Treasury modelling underpinning the savings through Freedom of Information requests have been blocked due to privacy provisions and the potential of damaging ­federal-state relations.

Jim Chalmers revealed to The Weekend Australian that NDIS budget projections would be updated next week, following the multibillion-dollar deal at national cabinet between the commonwealth and premiers, who agreed to scrap the 4 per cent annual growth cap on their states’ NDIS contributions.

Federal Treasurer Jim Chalmers said NDIS budget projections would be updated next week. Picture: NCA NewsWire/Martin Ollman

Ahead of his third budget, the Treasurer said the NDIS numbers would be “revised”.

“We’ll have a bit more to say about the NDIS on Tuesday. More broadly, there are five big pressures on the budget and the NDIS is one of them. We’ve shown a willingness to engage with that so that we deliver the services people need and deserve,” Dr Chalmers said.

“We’ve also made big progress on debt on interest, which is another one of the big five spending pressures on the budget. Combined, NDIS, interest costs, aged care, healthcare and defence are the reasons why the pressures on the budget are still intensifying rather than easing.

“They require ongoing attention, and they’re getting it.”

The assurances from the Treasurer come as the National Disability Insurance Agency revealed it had received double the volume of requests from participants asking for a change to their NDIS plans since late last year.

“Many of the plan review requests received have been driven by NDIS participants overspending their plan budgets before the end of their set plan period,” an NDIA spokeswoman said.

Peak body for disability support providers Disability Intermediaries Australia raised concern with the growing backlog, which it said was causing delays of nearly six months for plan reviews.

“We’re seeing significant times for plan reviews and repeal of decisions and change of circumstance that’s causing a lot of difficulties for a lot of participants,” DIA chief executive Jess Harper said.

“We’ve got examples of change of circumstances … where a participant is seeking to have their plan looked at because circumstances in their life have changed or they’ve had a significant drawdown on their plan and they’re not going to make the end of their current plan period.

“We’ve got examples of those sorts of things still being reviewed dating back to October.”

He added the sector was experiencing a “kind of a two-speed NDIS” where participants with complex support needs were “getting exceptionally large packages”, while those with less complex needs were seeing their plans ­reduced.

The Australian revealed earlier this year that the number of NDIS participants on plans that are worth at least $1m has more than doubled since 2021.

Labor introduced legislation earlier this year aimed at stopping participants from needing to continuously seek top-ups for their funding. The new bill will also move to define what can be claimed as an NDIS support payment – and, more importantly what can’t be, cleaning up the previous practice of some people looking to claim holidays, whitegoods or utility bills.

NDIS Minister Bill Shorten. Picture: NCA NewsWire/Diego Fedele

NDIS Minister Bill Shorten said he was confident the combination of legislative reforms and creation of foundational supports would allow the government to reach its 8 per cent growth target for the scheme.

“The Labor government is putting people at the heart of its disability reforms. As announced in the NDIS Review recommendations in December last year, these reforms will contribute to reaching the 8 per cent target as agreed by national cabinet last year,” he said.

“In December, NDIA board chair Kurt Fearnley said he was optimistic the scheme was on track to reach the agreed national cabinet’s annual growth target of 8 per cent by July 1, 2026, with further moderation of growth expected from NDIS Review reforms, which aim to make sure the NDIS is working better.

“As an initial response to the NDIS Review, national cabinet agreed to work together to implement legislative and other changes to the NDIS to improve the experience of participants and restore the original intent of the scheme to support people with permanent and significant disability, within a broader ecosystem of supports.”

But ACT Mental Health and Community Services Minister Emma Davidson raised concerns around the foundational supports strategy.

“My concern with these changes happening faster than information is being shared is that more people will be left without essential support and more likely to end up in hospital or institutionalised settings and experience difficulties maintaining employment, education, housing or social relationships,” she said.

“People may lose access to support they received through the NDIS before alternatives are ready and available.”

ACT Chief Minister and Treasurer Andrew Barr said reinstating services outside the NDIS would “be at a cost to state and territory governments”.

“In a time of increasing vertical fiscal imbalance, the federal government will need to increase funding support for other pressures on our budgets, namely health and infrastructure,” he said.

Opposition NDIS spokesman Michael Sukkar also raised alarm with additional health and education services not being ready.

“It would be unconscionable for the Labor government to throw families with children who desperately need support onto a system that is not properly up and running, proven to be effective and in a state that is fit to support their children,” Mr Sukkar said.

He said the concessions from the NDIA that wait times for plan reviews had doubled was “a scandal” and called on Labor to focus on the “core business of serving Australians”.