Special Edition | 22 April 2026 | Federal Budget 12 May 2026

The Minister for Health Disability and Ageing Mark Butler delivered the most significant NDIS policy address since the scheme’s inception, a comprehensive plan to reshape the scheme, reduce growth trajectory, and redefine who the scheme supports. This special edition brings together the Government’s announcement, the community and advocacy response, the key implementation timelines, and 2ig’s analysis of what it means for disability organisations, supported employment, and the transformation ahead.

1. The Government’s Plan: Securing the NDIS for Future Generations

The Scale of the Challenge

Minister Butler addressed the National Press Club on 22 April 2026 The NDIS was originally intended to support around 410,000 people. Today there are approximately 760,000 people on the scheme, and without reform that would grow to well over 900,000 by the end of the decade. That’s not to say that people don’t’ need the NDIS, it is the only scheme of its kind in the world, and it has changed lives. The scheme currently costs $50 billion annually and was growing at 22 per cent per year when Labor came to government. National Cabinet agreed to reduce growth to 8 per cent in 2023, and earlier this year Minister Butler announced the growth target 5 to 6 per cent or lower. But the Scheme Actuary David Gifford has now advised the Government that spending has blown out by $13 billion over the next four years, meaning the 8 per cent target will not be met until the end of the decade without intervention, which is the government’s focus.

Butler also cited Talbot Mills research showing that while 7 in 10 Australians still believe the NDIS plays a vital role, 7 in 10 also think it has become too large and struggles with dodgy providers, and more than 6 in 10 think the scheme is broken. The erosion of social licence, he argued, is as damaging to the scheme’s future as the cost blowout. Whilst we know that these throwaway lines were used somewhat in the Minister’s speech, we have to acknowledge that the Talbot Mills research and the Government is using this information to support their decision making. We know that there are innumerable providers that are trustworthy and do not fall into the categories espoused in the report.

The Four Pillars

•Fighting fraud and stopping rorts

•Slowing rapid cost increases

•Clearer eligibility requirements

•Delivering quality services and support to participants

Under the plan, NDIS spending will grow at approximately 2 per cent per year during the reset period, before returning to 5 per cent growth from 2030. Instead of costing more than $70 billion in 2030, the projected cost is $55 billion, a saving of $15 billion by the end of the decade.

The Key Changes

All 760,000 current participants will be screened under new eligibility criteria, with standardised, evidence-based assessments of functional capacity replacing the diagnosis gateway that has been in place since the scheme began. Eligibility will be based on a significant reduction in a person’s functional capacity that impacts their day-to-day living. The Government’s modelling projects the scheme will reduce from 760,000 to around 600,000 participants by the end of the decade, meaning approximately 160,000 people are expected to lose access to the NDIS and have to be supported outside the scheme,

The social and community participation funding stream, which has grown from $4 billion to $12 billion in five years and was heading toward $20 billion, will be reset to last year’s level. Average plan spending will be reduced from around $31,000 today to approximately $26,000, back to 2023 levels. Spending on intermediaries (Plan Managers and Support Coordinators) will be reduced by 30 per cent, with the Government moving to commission a shortlist of quality providers rather than relying on an open market.

Mandatory Provider registration will be expanded to cover personal care, daily living supports, and supports provided in closed settings, building on the existing mandatory registration for Supported Independent Living and Platform Providers from 1 July 2026. A digital payments system will give the NDIA real-time visibility of every claim, closing the current gap where 90 per cent of claims approximately 600,000 per day are submitted without supporting evidence.

A $200 million Inclusive Communities Fund will be established to rebuild genuine participation options in community organisations, expected to be open to mainstream as well as disability Providers. The $10 billion Foundational Supports framework, of which $4 billion will be directed to Thriving Kids agreed by National Cabinet, will provide alternative supports for people who transition out of the scheme.

One in five NDIS plans are currently subject to an unscheduled reassessment each year, with an average result of a 20 per cent increase in plan value. Tighter criteria for unscheduled reassessments will be introduced.

2. Implementation Timelines: What Happens and When

The Government has released a phased implementation schedule. These dates are relevant for understanding next steps and transformation.

May 2026

Tighter criteria for unscheduled plan reassessments commence. Legislation (NDIS Amendment. Securing the NDIS for Future Generations Bill) introduced to Parliament.

July 2026

Uplift to NDIS claims and payment systems begins. Digital payments rollout commences.

July 2026

Commissioning consultation for Supported Independent Living (SIL) commences. Mandatory SIL registration also takes effect from 1 July 2026.

October 2026

Tightening of budgets for community access and social participation begins. Material impact on participant plans from this date.

October 2027

New plan management process begins.

May 2028

Federal election to be held on or before 28 May 2028.

July 2028

New eligibility rules (functional assessment based) expected to be in place by January 2028, with current participants reassessed over a transition period.

3. The Community and Advocacy Response

“People Are Scared”

The disability community’s response to the announcement was immediate and pointed. People With Disability Australia (PWDA) President Jeramy Hope said thousands of people with disability and their families would go to bed worried about what the changes mean for them.

“People are scared. They are wondering whether they will lose access to the supports they rely on to get out of bed, to eat, to leave the house, and to be part of their families and communities. As a participant, and as a parent of a daughter with autism who relies on the NDIS, this is about our everyday lives.”

— Jeramy Hope, President, People With Disability Australia

PWDA Acting CEO Megan Spindler-Smith made the cost-shifting argument directly: sustainability cannot be achieved by removing people from support without a clear, funded alternative.

That is not reform it is shifting the cost onto people with disability, their families, and other systems like aged care and hospitals that cannot absorb it. PWDA called on the Government to provide clear detail and guarantees ahead of the 12 May Budget, warning that assessment tools must not be blunt instruments that exclude or misclassify people whose disability does not fit neatly into categories.

Inclusion Australia and the Joint Peak Body Statement

Inclusion Australia and a coalition of peaks released a joint statement expressing collective disappointment that the Government chose not to engage with the disability community before making the announcement. Their joint statement makes four core demands

•Systems must be in place before people are moved off the scheme, not after — the aged care experience of redirecting people to supports that do not yet exist must not be repeated.

•Draft legislation must be released as soon as possible so people with disability and their representative organisations can scrutinise what is being proposed.

•The eligibility threshold will define the scheme for a generation the disability community must be at the table when that decision is made.

•NDIS reform is fundamentally incomplete without a parallel, ironclad commitment to the safety of every Australian with disability, in line with the Disability Royal Commission’s findings.

Women With Disabilities Australia

This group (WWDA) has specifically flagged that the changes to NDIS supports and eligibility risk disproportionately impacting women, girls, and gender-diverse people with disabilities as well as First Nations people and people from culturally and linguistically diverse communities. WWDA has consistently called for reforms that keep people with disability at the centre and are led by and with the disability community. They have expressed concern that the limited engagement throughout this process does not meet that standard.

The gender dimension of this reform is also a practical issue for disability organisations. The care workforce is predominantly female. The informal carer workforce family members and carers who will absorb more of the support burden if NDIS funding reduces is predominantly female. And the community participation programs being reset serve a cohort where women and gender-diverse people are significantly represented. The risk of these reforms landing disproportionately on women is real, and organisations should factor it into their planning.

Political Reaction: Opposition and Greens

The Coalition’s response was characterised by agreement on the need for reform, combined with sharp criticism of the approach. Shadow NDIS Minister Melissa McIntosh acknowledged the scheme’s growth is unsustainable but argued the Government had targeted participants first rather than focusing on the fraud and overcharging that drives cost growth. McIntosh said the Government “didn’t need to scare 760,000 Australians the way he did today without consultation,” and pointed out that Butler has not yet achieved his previous growth targets of 8 per cent or 5 per cent, questioning whether the 2 per cent target is credible.

McIntosh raised the human cost of reassessment directly, citing a constituent who has already been through multiple assessments to prove she does not have legs and needs a prosthetic, asking why she should be required to go through another one. On Provider registration, Melissa McIntosh agreed mandatory registration is needed, noting that 94 per cent of Providers are currently unregistered with no requirement even for a first aid certificate or Working With Vulnerable People check, but said the Government could have gone further and faster on this front rather than leading with eligibility changes.

The Greens were more direct in their opposition. Senator Jordon Steele-John, the Greens’ disability spokesperson, said the Greens would not support cuts that leave vulnerable people without any other options. Senator Steele-John said Labor was “trying to choose a group in the disabled community they think is the weakest target, but disabled people are used to fighting for their basic rights, and the Greens will back them the entire way.” He accused Labor of attempting to balance the budget off the backs of disabled people while allowing large corporations to avoid paying their fair share of tax and letting fossil fuel subsidies soar.

Their central concern echoed that of the disability advocacy community: that the Government is removing supports without clarity on where people will go. “The community are telling me they’re scared. Yet again, the government are talking about massive cuts to the NDIS without clarity and with nowhere to turn to, it’s leaving everyone on edge.”

The Government has indicated it will seek bipartisan support for the legislation in the Budget session. With the Coalition supportive in principle but critical of the process, and the Greens opposed outright, the passage of the Securing the NDIS Bill will require careful Senate management and the detail of the legislation, particularly on eligibility thresholds and assessment tool design, will be the battleground.

4. How the media are reacting

SBS News — "Difficult, unavoidable"

SBSframed the announcement with Butler's own words: difficult, but unavoidable. Their coverage captured the tension at the heart of the reform welcoming the crackdown on fraudulent Providers while raising serious concerns about cuts to eligibility and support. For multicultural communities and communities of colour, who are disproportionately represented among carers and participants, SBS is often the primary news source. The fact that this story led their coverage signals how widely the fear is landing beyond the mainstream disability sector.

The Conversation — Tightened eligibility and cuts to plans

The Conversation provided the most rigorous participant-focused analysis of the day. Their key point deserves attention: at 2 per cent growth until 2030, with inflation running above 3 per cent, NDIS expenditure will actually decrease in real terms. The scheme continues to grow on paper. In practice, the purchasing power of every plan shrinks. That is the lived financial reality for participants and the revenue reality for providers well before any eligibility changes land in 2028. The Conversation also noted that reductions in social and community participation funding will start to bite from 1 July 2026, not 2028. The timeline is shorter than many in the sector realise. This needs to be confirmed with Government.

ABC News — 160,000 to be kicked off / Five key takeaways.

ABC ran two complementary piecesthat together shaped how the general public absorbed the day. The main news report led with the human impact "160,000 people to be kicked off NDIS" drawing immediate responses from participants and families across Australia. The five key takeaways explainer gave readers a structured way to understand what changes and when. Read together, the ABC coverage confirms that the public conversation is not being framed around fraud or fiscal sustainability. It is being framed around who loses access and what happens to them next. That is the question the sector will be asked to answer, and we know of many credible Providers who will be wanting to make commentary.

Perth Now / News Corp — The hard part has only just started.

The sharpest editorial verdict of the day came from Perth Now:Butler has done the easy part. The hard part is delivery. That observation is exactly right, and it is where the real work for the sector begins. The Government has announced a direction and named a timeline. It has not yet written the legislation, designed the functional capacity assessment tool, built the commissioning framework for SIL and support coordination, or stood up the Foundational Supports system.

Bloomberg — Australia moves to rein in ballooning cost.

Bloomberg's international coverageplaced the announcement in a global economic frame a centre-left government moving to rein in a ballooning welfare program against the backdrop of budget pressure. Significantly, Bloomberg noted that the NDIS reforms form the largest single component of Treasurer Jim Chalmers' May budget savings package. That framing matters. This is not being read internationally as a disability policy reform. It is being read as a fiscal consolidation measure. For disability organisations seeking to influence how the reform is designed and implemented, understanding that the economic and fiscal imperatives are firmly aligned is essential context.

5. 2ig’s Perspective: What This Means for Disability Organisations

The Reset Is Here — And the Work Is Strategic

The announcement needs to be taken seriously; there is legislation to follow in the Budget sittings and a phased implementation schedule running to 2028 and beyond. For disability organisations, this is not a time for reactive commentary. It is a time for honest strategic assessment of your funding base, your business model now and into the future, and your position in a market that may need to be shaped differently.

The direction needs to consider smaller scheme, tighter eligibility, more registration, less intermediation, stronger payment integrity, and a genuine but uncertain rebuild of supports outside the NDIS and a loss of participants from the scheme.

Employment Transformation: The Critical Pressure Point

For organisations in Supported Employment and Social Enterprise, today’s announcement lands at a moment of compounding pressure. The 160,000 people expected to leave the NDIS are not randomly distributed across the scheme. They are disproportionately likely to be people with lower support needs and particular consideration must be given to those with minimal support needs in employment. The ageing workforce and the smaller plan values may well be targeted in the reforms.

The reset of social and community participation budgets which takes average plans from $31,000 back toward $26,000 in real terms directly affects the funding streams that support participation and community engagement. For Providers, whose revenue depends on those plan values, this is a material change that requires a revenue strategy review.

The 30 per cent reduction in intermediary spending and the move to a commissioned shortlist of support coordinators will also reshape referral and coordination pathways that employment providers have relied upon. Understanding how commissioning will work and positioning to be on the shortlist is a strategic priority for any organisation that depends on Support Coordination and Plan Management as a referral source.

Transition to Retirement: An Emerging and Urgent Issue

One of the considerations of today’s announcement is its implications for older participants including those in Supported Employment people who have spent years, sometimes decades, in ADEs, whose plans may have lower values and whose access to the scheme may now be reviewed under the new functional capacity assessment tool.

For many of these individuals, the NDIS is not just a funding mechanism for employment. It is the scaffolding that supports their participation in daily life, community connection, and personal dignity. If a significant cohort of older supported employment participants is transitioned off the scheme or onto significantly reduced plan values, the impact on providers is not only financial. It raises fundamental questions about continuity of care, transition planning, and what a retirement pathway actually looks like for someone who has spent their working life in a Supported Employment setting.

Transition to retirement planning for this cohort needs to be on disability organisation’s strategic agenda now. Organisations that have not developed a transition to retirement framework covering how they will support participants who move off or reduce their NDIS engagement, and how they will manage the associated revenue and workforce implications should really think deeply how this can be managed respectfully and through a strategic framework.

Social Enterprise, Acquisition, and Business Transformation

The reshaping of the NDIS market will accelerate consolidation. Providers facing revenue reductions from budget resets, intermediary cuts, and eligibility tightening will need to make strategic decisions and adapt the model, find a merger, or acquisition partner, or wind up. For organisations with strong service models, this creates genuine acquisition opportunity. The organisations best placed to acquire will be those that have done the work of understanding their own financial position, their geographic footprint, and the services that are genuinely viable in the post-reset environment.

Social enterprise models are both at risk and at opportunity. At risk, because the community participation funding stream that has supported many social enterprise models is being reset. At opportunity, because the $200 million Inclusive Communities Fund is explicitly open to mainstream organisations not just disability Providers and is designed to fund genuine community participation outside the NDIS. Social enterprises with strong community relationships and demonstrated outcomes may be well positioned to access this funding stream.

The Foundational Supports Question

The $10 billion Foundational Supports commitment is the Government’s answer to what happens to the 160,000 people who will leave the scheme. But PWDA, Inclusion Australia, and the peak body coalition have all made the same point: we do not know when these supports will be ready, how they will be delivered, or whether they will be consistent across jurisdictions.

For disability organisations thinking about their future, the Foundational Supports framework is both a risk and a market opportunity. If those supports are delivered through community organisations and local providers rather than through a centralised system, there is a significant role for organisations with existing community relationships, case management capability, and local knowledge. The design of that framework is still being determined and the organisations that are in the room during the consultation process will have more influence over what it looks like than those that wait for the outcome.

What 2ig Is Watching

As the Budget approaches on 12 May and legislation follows in the Budget session, 2ig will be tracking the detail closely across four areas: how the functional capacity assessment tool is designed and who is included in its co-design; how the Inclusive Communities Fund is structured and what organisations are eligible to access it; how SIL commissioning is designed and what the shortlist model looks like; and how Foundational Supports funding flows to states and territories and what delivery models are used.

The sector’s role in the next four years is not to resist the reset. It is to shape it — and to be positioned for what comes after it.

At 2ig, we work with disability, NDIS, Social Enterprise, and for-purpose organisations on strategy, transformation, employment change, business turnaround, and acquisition. If you are working through what the Minister’s announcement means for your organisation — your funding model, your workforce, your employment programs, your retirement transition planning, or your strategic options — we would welcome the conversation.

— The 2ig Team

www.2ig.com.au