Australia's most significant NDIS reforms since 2024 have now passed into law. Here is what changed, and what it means for participants and providers.

Background

On 19 August 2026, the National Disability Insurance Scheme Amendment (Securing the NDIS for Future Generations) Bill 2026 passed both Houses of Parliament. It received Royal Assent the following day, becoming the National Disability Insurance Scheme Amendment (Securing the NDIS for Future Generations) Act 2026 (Cth).

The Act amends the National Disability Insurance Scheme Act 2013 (Cth) and represents the most significant structural reform to the Scheme since 2024. It responds to recommendations from the NDIS Review, the Disability Royal Commission, and the NDIS Provider and Worker Registration Taskforce, and gives effect to changes flagged in the 2026-27 Budget.

The Act is structured across five schedules covering access and planning measures, fraud measures, governance arrangements, new framework planning, and transitional rules. Rather than commencing all at once, the reforms are being rolled out in stages, with some provisions already in effect and others not due to commence until 2028.

Importantly, this Act is separate from, but complementary to, the NDIS Amendment (Integrity and Safeguarding) Act 2026, which received Royal Assent earlier in the year and focused primarily on regulatory powers held by the NDIS Quality and Safeguards Commission.

What has Changed

The reforms cover considerable ground. Some of the most significant changes include:

Access and eligibility

The Act introduces a formal definition of "functional capacity" for the first time, alongside a tightened definition of "permanence" that generally requires a person to have undertaken all appropriate, evidence-based treatment for an impairment before it can be considered permanent. A new eligibility pathway also excludes certain impairments where compensation is available through motor vehicle accident or workers' compensation schemes, or where the National Disability Insurance Scheme rules declare that an alternative support system is more appropriate. These access changes do not commence until 1 January 2028. From that date, new applicants will be assessed through a standardised, evidence-based functional capacity assessment, and participants already in the Scheme will be progressively reassessed against the new criteria over three years.

A Technical Advisory Group, including members with lived experience of disability, will advise the Minister on the thresholds and assessments used to determine functional capacity. Separately, the Government has announced that from 1 January 2028 children aged eight and under with developmental delay or autism and low to moderate support needs will be supported through the Thriving Kids program rather than the NDIS. That change is not given effect by this Act, and the Department has indicated it is still working through the design and detail with states and territories before further amendments are made.

Planning and plan reassessments

Unscheduled plan reassessments will only be available where a participant can demonstrate a significant and ongoing change in their support needs, arising from either a change in functional capacity or a change in personal or environmental circumstances. Separately, the Act introduces automatic plan renewal for old framework plans, generally on 12-month cycles, without automatic rollover of unspent funds.

Reasonable and necessary supports

The threshold for what is funded as "reasonable and necessary" has been reframed to explicitly incorporate financial sustainability, value for money, and evidence of effectiveness. New provisions require the CEO of the National Disability Insurance Agency (NDIA) to have regard to published, peer-reviewed research when assessing whether a support will be effective, and introduce specific rules concerning family and carer responsibilities, particularly for children. These changes commence on 1 February 2027.

Funding reductions and support determinations

The Minister may now make legislative determinations reducing funding for specified groups of supports, including a proposed reduction to social, civic and community participation supports and capacity building daily activities supports. A participant who is a "high support needs participant" and is affected by such a reduction may apply to have funding redirected to other groups of supports, such as assistance with daily living or home and living supports.

Plan suspension and revocation

The NDIA CEO may now suspend or revoke a participant's status if reasonable attempts (at least five, over a defined period) have been made to contact the participant and the participant remains uncontactable, subject to safeguards for participants experiencing homelessness or hospitalisation.

Fraud and provider regulation

The definition of "NDIS provider" has been narrowed, so that entities such as mainstream retailers and pharmacies are not inadvertently captured as providers subject to the Code of Conduct. New civil penalties and criminal offences have been introduced for false or misleading statements, fraudulently obtaining payments, and concealing or falsifying records. A new prohibition on inducements makes it an offence for a provider to offer gifts, cash, alcohol, tobacco products or electronic devices to induce a person to engage their services, alongside expanded whistleblower protections and new record-keeping obligations requiring most providers to retain claim-related records for seven years.

Plan management reform

Registered plan management providers will be required to enter into a formal deed of arrangement with the NDIA, covering governance, staffing, conflict-of-interest management, and claims handling. Providers will no longer be able to be registered for both plan management and direct service delivery. Operationally this will be delivered through a government-appointed panel: from 1 October 2027 only providers on the panel may deliver plan management services, with an initial six-month transition period for participants whose plan manager is not on it.

Claim timeframes

The period for submitting a claim will reduce from two years to 90 days from service delivery, effective 1 December 2026.

Pricing governance

Responsibility for setting maximum prices for NDIS supports shifts from the NDIA to the Minister, who will make legislative pricing determinations informed by advice from the NDIA.

What do the Changes Mean for Participants

For participants, the changes bring a mix of new safeguards and tighter access settings.

On the safeguard side, participants gain expanded protections around debt recovery, with new requirements for the NDIA to issue clear notices before pursuing a debt, and improved whistleblower protections for those who report wrongdoing. High support needs participants affected by funding reductions in certain support categories may be able to apply for funding to be redirected elsewhere in their plan. Automatic plan renewal is also designed to reduce the disruption and paperwork burden associated with reassessment for participants whose circumstances have not materially changed.

At the same time, participants should be aware that access and planning settings have tightened in several respects. The stricter permanence and functional capacity definitions may affect eligibility decisions for some prospective and existing participants, particularly where evidence-based treatment options exist. Reductions to funding for specific support categories, such as social and community participation supports, will be applied progressively from 1 October 2026 as plans are reassessed or renewed, rather than to every plan at once, and do not affect budgets for critical supports.

Participants should also be aware that plans may be suspended if the NDIA is unable to make contact after repeated attempts, and that the "reasonable and necessary" test now more explicitly considers cost-effectiveness and evidence of a support's benefit. Participants and their families should review any correspondence from the NDIA carefully as these changes take effect and seek advice or support from an advocate if a plan or eligibility decision is affected. Providers and support coordinators should be ready to explain these changes to participants and families, and to point them to independent advocacy where an eligibility or plan decision is disputed.

What are the Implications for Providers?

Providers face a substantial compliance task across nearly every part of their operations.

The redefinition of "NDIS provider" will bring welcome clarity for some entities, but all providers should confirm whether they fall within the new definition. Providers should review and strengthen record-keeping practices immediately, given the new seven-year retention requirement for most claim-related records and should ensure invoicing and claims documentation can withstand closer scrutiny under the reduced 90-day claim submission window from December 2026.

The new prohibition on inducements requires an immediate review of any promotional or engagement practices, including gifts, discounts, or benefits offered to participants, to ensure they fall within the "legitimate pricing practice" exception rather than the prohibited conduct provisions. Providers should also review policies addressing conflicts of interest, given the heightened penalties for fraudulent conduct and the new related-party provisions applying to plan management providers.

Registered plan management providers face the most significant change, needing to prepare for a formal deed of arrangement with the NDIA and a clear separation between plan management and other service delivery, noting that this reform commences by Proclamation and no later than 24 months after Royal Assent. Providers should also prepare for new information-gathering and investigation powers available to both the NDIA and the NDIS Commission, including the ability to enter premises, access electronic equipment, and require assistance to access data under warrant.

Given the breadth of these changes, providers should not assume that any single team (compliance, finance, or clinical) can manage the transition in isolation. A whole-of-organisation review is warranted.

Next Steps

The reforms commence progressively from August 2026, with the tighter unscheduled reassessment criteria and the new record-keeping obligations already in force since 27 August 2026. Key dates to watch are 1 October 2026 (support determinations), 1 December 2026 (reduced claim timeframe), 1 February 2027 (plan renewal and the reasonable and necessary criteria), 1 April 2027 (new framework planning), 1 July 2027 (expanded mandatory registration and the opening of provider enrolment), 1 October 2027 (plan management panel), 1 January 2028 (access and eligibility changes, including the tightened permanence definition) and 1 July 2028 (commissioned support coordination). Some measures run well beyond this window: expanded registration is not fully rolled out until December 2030, existing participants are reassessed against the new access criteria progressively over three years from January 2028, and the plan management deed requirement commences by Proclamation and no later than 24 months after Royal Assent.

Providers and participants should closely monitor guidance from the NDIA and the NDIS Quality and Safeguards Commission as further National Disability Insurance Scheme rules, legislative instruments and practical guidance are released to support implementation. Given the scale and staged nature of these reforms, organisations should treat this as an ongoing compliance program rather than a single point-in-time update.

 

Nicole Chen

Nicole is a Principal Consultant at Ideagen CompliSpace with a background in the healthcare industry across acute, aged and community services. Throughout her career, she has held various management and clinical positions, contributing significantly to both research and higher education within the sector. Nicole provides valuable knowledge and insights from both a clinical perspective and a nuanced understanding of the operational and strategic aspects of healthcare. She holds a Bachelor in Nursing, a Postgraduate Certificate and a Doctor of Philosophy (PhD).

 

 

Nick Edwards

Nick is a Legal Content Senior Associate at Ideagen CompliSpace. Nick has several years' experience designing and administering eLearning for the Aged Care Sector and holds a Bachelor of Laws from the University of Technology Sydney with First Class Honours.