On 12 May 2026, the government delivered the 2026–27 Federal Budget, unveiling significant reforms to the National Disability Insurance Scheme (NDIS). The reforms aim to refocus the NDIS on supporting people with permanent and significant disability and addressing concerns about the long-term sustainability of the NDIS.
While the NDIS will continue to be Australia’s largest social program outside of the Age Pension, the government has made clear that containing the growth of the NDIS is a key priority. The Budget introduces a range of measures designed to strengthen the integrity of the scheme, improve oversight and administration, and place the NDIS on a more sustainable trajectory. Of particular significance for NDIS providers, the Budget proposes substantial changes to regulatory enforcement, including expanded mandatory registration requirements, new civil penalties and enhanced investigation powers for the NDIA. These changes will directly affect providers’ compliance obligations and operational frameworks.
Projected savings
If made, the reforms are expected to reduce growth in NDIS payments by $37.8 billion over four years from 2026–27, relative to the NDIS Actuary’s updated projections. Over the longer term (2025–26 to 2036–37), the changes are projected to lower scheme payments by $184.9 billion, with $32.5 billion of this accruing to states and territories as lower scheme contributions.
The Budget also seeks to moderate scheme growth to around 2% over the forward estimates, before growth returns to 5% from 2030–31, in line with National Cabinet’s agreement and with other care and support programs, including aged care, medical benefits and the childcare subsidy.
Key funding commitments
The Budget allocates $1.7 billion over five years to support people with disability and improve the quality of supports delivered through the NDIS. The proposed reforms focus on four areas, namely: service quality, eligibility requirements, slower growth, and stronger action against fraud and misuse of funds. Some of the key budget allocations include:
- $436 million in 2026–27 to ensure the National Disability Insurance Agency (NDIA) can continue to support NDIS participants.
- $358.5 million over five years to develop a new enrolment and digital payment system to improve payment integrity and reduce fraud and non-compliant payments.
- $280.1 million over five years (and $53 million per year ongoing) to continue the Fraud Fusion Taskforce and invest in NDIA fraud detection and response.
- $182.6 million over four years to expand mandatory registration of high-risk NDIS providers.
- $21.7 million over four years from 2026–27 (and $5.8 million ongoing) to support the NDIS Quality and Safeguards Commission’s regulatory and compliance activities.
National Disability Insurance Scheme Amendment (Securing the NDIS for Future Generations) Bill 2026
On 14 May 2026, the government introduced the National Disability Insurance Scheme Amendment (Securing the NDIS for Future Generations) Bill 2026 (the Bill) to give legislative effect to the Budget measures. The Bill amends the National Disability Insurance Scheme Act 2013 (Cth) (the NDIS Act) and comprises five Schedules. We summarise some of the key amendments below:
Schedule 1 of the Bill addresses ‘access and planning’ matters. It amends NDIS eligibility requirements and strengthens the NDIA’s powers in relation to managing participant plans. The key changes are directed to:
- establishing a legal framework for determining access to the NDIS based on substantially reduced functional capacity
- limiting unscheduled plan reassessments to prescribed circumstances
- strengthening the link between an impairment and the need for supports (this appears to be a response to Federal Court and Tribunal decisions, including Chief Executive Officer of the National Disability Insurance Agency v Eastham [2026] FCA 147 (read more about that decision here))
- stricter plan renewal requirements
- establishing mandatory considerations for determining what supports are reasonable and necessary to fund;
- empowering the NDIA to suspend plans in certain circumstances
- clarifying the definition of permanence in the NDIS Act, to specify that access will only be granted when all appropriate treatment for an impairment has been undertaken and the impairment is likely to be lifelong.
Schedule 2 strengthens the NDIA’s regulatory and enforcement powers, enabling it to investigate fraud directly rather than relying on Australian Federal Police resources. Key changes include:
- amending the definition of “NDIS provider” and expanding mandatory registration for high-risk providers
- introducing new civil penalties for failures to comply with certain requirements
- extending the monitoring and investigation powers under Parts 2 and 3 of the Regulatory Powers (Standard Provisions) Act 2014 (Cth) to the NDIA
- strengthening the NDIA’s information gathering powers
- requiring providers to retain records relating to NDIS payments for 7 years
- reducing the timeframe for making a claim for supports under a plan
- clarifying registration requirements for plan management providers.
Schedule 3 makes the Commonwealth Minister (rather than the NDIA) the decision-maker on NDIS pricing, enabling differentiated pricing by remoteness, support intensity, provider qualifications and registration status. It also authorises the NDIA to automate specific administrative actions, with safeguards.
Schedule 4 supports new framework planning from 1 April 2027, enabling budget method rules and clarifying that support needs assessments must identify needs linked to a participant’s eligible impairments.
Schedule 5 is transitional, enabling time-limited rules to address savings, application and other transitional matters arising from the Bill.
For more information about the Bill, see the Fact Sheet here.
On 14 May 2026, the Bill was referred to the Community Affairs Legislation Committee for inquiry and report. The Committee tabled an interim report on 23 June 2026, recommending that the Bill be passed subject to the implementation of several recommendations. The Committee will table its full report on 14 August 2026. You can read the Committee’s interim report here.
Provider registration reforms
As a reminder, from 1 July 2026 all Supported Independent Living (SIL) and NDIS digital platform providers must be registered with the NDIS Quality and Safeguards Commission.
For more information about the 1 July 2026 reforms, see our April 2026 edition of NDIS in motion here.
What’s next
- The Bill must pass both Houses of Parliament before it will become law. We will continue to monitor its progress and provide relevant updates.
- The Community Affairs Legislation Committee will table its full report on 14 August 2026. The Bill’s passage remains subject to the Committee’s recommendations being implemented.
- SIL and platform NDIS digital providers should be ready now to meet the new mandatory registration requirements on 1 July 2026.