Key Takeaways
- The NDIS eligibility test will move from a diagnosis‑based list to a standardized, evidence‑based assessment of a person’s functional capacity.
- The World Health Organization’s functional capacity assessment tool will be adapted, but the exact thresholds (“parameters”) have not yet been set and will be finalised over the next 18 months.
- Current participants may not know until mid‑2027 whether they remain eligible, creating a period of uncertainty for families and service providers.
- Two state‑run programs—Thriving Kids (for children under nine) and Foundational Supports (still being designed)—will replace NDIS support for those who lose eligibility, though concerns remain about national consistency and service quality.
- The government has not yet announced formal review or appeal mechanisms for eligibility decisions, prompting advocacy groups to stress the need for safeguards.
- Legislative changes to eligibility will be introduced in May 2025, with the new rules taking effect on 1 January 2028; Thriving Kids will begin rolling out on 1 October 2026 and operate at scale from the same January 2028 date.
- To curb fraud, the NDIS will introduce a digital payments system and expand mandatory provider registration for personal‑care, daily‑living, and closed‑setting workers starting 1 July 2025.
- Stakeholders urge the government to publish detailed legislation and implementation timelines quickly to avoid a “postcode lottery” and ensure safeguards are in place before any participants are removed from the scheme.
Eligibility Shift from Diagnosis to Functional Capacity
The core reform announced by Health and NDIS Minister Mark Butler is a move away from eligibility determined solely by a medical diagnosis. Instead, access to the NDIS will be based on “standardised evidence‑based assessments of a person’s functional capacity.” In practice, this means that a person will qualify only if their functional capacity is significantly reduced in ways that affect day‑to‑day living. The current lists that automatically grant eligibility based on certain diagnoses will be removed, aiming to focus resources on those with the most substantial and permanent disabilities.
Details of the Functional Capacity Assessment Tool
The government intends to adopt the World Health Organization’s functional capacity assessment framework as the basis for the new tool. However, the National Disability Insurance Agency (NDIA) must first settle on the specific parameters—such as score thresholds or domains of functioning—that will define a “significant reduction.” Martin Laverty, CEO of Aruma and former NDIS board director, noted that this work will take several months, leaving today’s participants in limbo until the agency finalises the metrics.
Impact on Current Participants
Because the exact cut‑offs have not yet been defined, Laverty warned that existing NDIS participants will not know for “some months” whether they will retain their support after the changes take effect. This uncertainty creates anxiety for families who rely on NDIS funding for therapies, equipment, and personal assistance. Laverty urged patience, emphasizing that the agency needs time to design a fair and transparent assessment process before any decisions are made.
Alternative Support Programs
For those who may no longer meet the revised NDIS criteria, two state‑administered programs are being developed. Thriving Kids will provide additional support to children aged under nine with extra needs, beginning a phased rollout on 1 October 2026 and operating at scale from 1 January 2028. The second initiative, Foundational Supports, remains under discussion between the Commonwealth and the states, with no concrete design or timeline yet published. Ross Joyce, CEO of the Australian Federation of Disability Organisations, warned that without a nationally consistent model, disparities could emerge—creating a “postcode lottery” where access to quality support depends on where a person lives.
Review and Appeal Mechanisms
As of the announcements, the government has not specified whether participants will be able to challenge decisions made under the new functional capacity assessment. Minister Butler told Guardian Australia’s Australian Politics podcast that he does not hold a firm view on review mechanisms and would consider community input. Currently, NDIS participants can request an internal review or appeal to the Administrative Review Tribunal, but advocacy groups such as People with Disability Australia stress that safeguards are essential. Acting CEO Megan Spindler‑Smith argued that without the ability to contest decisions, there is no effective protection against erroneous eligibility determinations.
Implementation Timeline
Legislation to enshrine the eligibility changes will be introduced in May 2025, with the new rules slated to commence on 1 January 2028. This 18‑month window is intended to give the NDIA time to finalize the functional capacity assessment tool and its parameters. Thriving Kids will start its rollout on 1 October 2026, reaching fullscale operation alongside the eligibility shift in January 2028. No fixed date has been set for Foundational Supports, but officials say it will be introduced in concert with the other changes to avoid gaps in coverage.
Fraud Prevention Measures
Minister Butler also outlined two initiatives aimed at reducing fraud within the NDIS. First, a digital payments system will be established, allowing the NDIA to track every transaction and ensure providers are paid directly. Second, provider registration will become mandatory for more workers—specifically those delivering personal care, daily‑living supports, and services in closed settings—starting 1 July 2025. Currently, registration is optional, but the expanded requirement is designed to increase transparency and enable better oversight of service delivery.
Conclusion and Sector Response
Overall, the announced reforms signal a significant tightening of NDIS access, shifting the focus from diagnostic labels to measurable functional limitations. While the intention is to target the scheme’s original purpose of supporting people with significant and permanent disability, the lack of concrete assessment thresholds, delayed timelines, and unspecified review processes have generated considerable uncertainty among participants, families, and service providers. Advocacy leaders consistently call for clear, nationally consistent guidelines, robust safeguards for decision‑review, and timely publication of legislation to prevent service gaps and maintain confidence in the disability support system. As the 2028 commencement date approaches, stakeholders will be watching closely for the NDIA’s final guidance on functional capacity assessments and the rollout details of the alternative state‑based programs.