Updated on June 21, 2026
The April 2026 Announcement
Speaking at the National Press Club on 22 April 2026, Minister Butler argued that the NDIS “costs too much and is growing too fast,” claiming the scheme was losing its social licence with six in ten Australians believing it was “broken” (Dickinson & Ganon-Davey, 2026). The announcement outlined a comprehensive plan to “secure the NDIS” through four key pillars: fighting fraud, slowing cost increases, clarifying eligibility requirements, and delivering quality services.
The scale of these reforms is unprecedented. The NDIS currently supports more than 760,000 participants—nearly double the originally predicted 410,000—at an annual cost exceeding $50 billion. The government aims to reduce participant numbers to approximately 600,000 by 2030, representing a reduction of 160,000 people from current levels, alongside preventing new applicants from accessing the scheme under tightened criteria.
These changes reflect ongoing tensions within the NDIS between rights-based principles and cost containment pressures. Research has documented how the scheme’s original disability rights objectives have increasingly retreated in favour of sustainability and consistency concerns (Hummell et al., 2025). The April announcement represents a decisive shift towards fiscal restraint, with Minister Butler acknowledging that without significant changes, the NDIS “will not be able to deliver what Australians with disability deserve”.
What Types of Funding Are Being Cut?
Social and Community Participation: A 30% Reduction
The most immediate and substantial cuts target social and community participation funding, which will be reduced by 30% starting 1 July 2026 (Dickinson & Ganon-Davey, 2026). This funding category supports activities outside the home that help participants engage in their communities and build confidence, including group cooking classes, fitness activities, social outings, and skills development programmes.
Minister Butler acknowledged these cuts will have a “material impact” on participants. For many NDIS participants, social and community participation supports are essential for maintaining connections, developing independence, and exercising their right to be included in community life. The reduction contradicts the scheme’s foundational philosophy of personalisation and participant choice.
Average Plan Reductions
Beyond specific category cuts, the government plans to reduce the average NDIS plan from $31,000 back to the 2023 average of $26,000—a reduction of $5,000 per participant. This represents a significant decrease in support levels at a time when participants continue to face cost-of-living challenges, housing unaffordability, and increased living costs associated with disability.
The government has also announced it will reduce the number of unscheduled plan reassessments, where participants spend their budgets before their plans end. This change may leave participants who experience unexpected needs or emergencies without adequate support until their next scheduled review.
The $200 Million Inclusive Communities Fund: An Adequate Replacement?
To partially offset cuts to individual plans, the government will establish a $200 million Inclusive Communities Fund available to mainstream and disability organisations to develop “new options” for people with disability to participate in their local communities (Dickinson & Ganon-Davey, 2026).
However, this funding represents only a fraction of what will be cut from participant plans. More significantly, it reallocates funding away from individuals with disability and towards organisations that will decide which services are offered. This shift is fundamentally inconsistent with the NDIS’s core principles of personalisation and participant choice.
The timing presents additional challenges. Reducing individual funding for social and community participation before the Inclusive Communities Fund has developed alternatives creates an obvious gap for participants. This gap requires urgent attention, as decreased access to social and community engagement presents clear barriers to participants’ rights to be included in the community and increases the likelihood of neglect and exploitation when people are not known or embedded in their local communities.
The I-CAN Functional Capacity Assessment Tool
A cornerstone of the new eligibility framework is the I-CAN Support Needs Assessment tool, which has been selected for standardised, evidence-based assessments of functional capacity. This represents a fundamental shift in how NDIS eligibility is determined.
Moving Beyond Diagnosis
The government intends to move away from using medical diagnoses to determine entry and instead focus on functional capacity—the impact a person’s impairments have on their life, in combination with their environment and aspirations. Minister Butler confirmed the I-CAN tool will need to indicate a “significant reduction in a person’s functional capacity” for people to gain access to the scheme.
The current approach, where some people gain NDIS access based on diagnosis from a list of eligible conditions, will end. This change aims to ensure greater consistency in how people are assessed for the scheme, addressing concerns about variability in access decisions. However, it also raises questions about how “significant reduction” will be defined and applied, and whether the tool adequately captures the diverse experiences of people with different types of disabilities.
New Eligibility Criteria Coming Mid-2027
The government will establish a technical advisory group to develop new NDIS eligibility criteria. While participants and potential applicants will not see these changes until at least 2028, the development process will begin immediately.
These new criteria will work in conjunction with the I-CAN assessment tool to determine who can access the scheme. The government’s stated goal is to return the NDIS to its “original intent,” though research suggests the scheme’s original objectives emphasised disability rights and person-centred approaches that are increasingly in tension with current reform directions (Hummell et al., 2024; Hummell et al., 2025).
The delay in implementing new eligibility criteria until 2028 means current participants have time to prepare, but it also creates uncertainty about who will be affected and how. The government has also announced it will delay new planning processes that were due to start in July 2026 until April 2027.
July 2026 Reforms and Implementation Timeline
The implementation of these reforms follows a staged timeline:
- 1 July 2026: Reductions in social and community participation funding begin. This is the most immediate change affecting current participants.
- April 2027: New planning processes commence, delayed from the originally scheduled July 2026 start date.
- Mid-2027 onwards: Technical advisory group develops new eligibility criteria.
- 2028: New eligibility criteria expected to be implemented, with participants and applicants beginning to experience changes in access decisions.
- By 2030: Government aims to reduce NDIS growth to 2% per year and participant numbers to approximately 600,000.
Additional reforms announced include introducing a digital payment system for better visibility over claims, reducing the number of organisations able to operate as plan managers, and increasing the number of activities requiring mandatory provider registration.
What Participants Should Do NOW to Protect Their Funding
1. Gather Comprehensive Evidence
Begin immediately collecting evidence that demonstrates your functional capacity needs and how your current supports enable you to achieve your goals. This should include:
- Detailed reports from all treating health professionals (occupational therapists, physiotherapists, psychologists, speech pathologists, etc.)
- Documentation of how you use your current funding and the outcomes achieved
- Evidence of your participation in community activities and the supports required
- Records of any deterioration in function or wellbeing when supports are reduced
- Statements from family members, carers, or support workers about your support needs
The shift to functional capacity assessment means you must clearly demonstrate not just your diagnosis, but how your impairments affect your daily life and participation.
2. Contact Your Support Coordinator Immediately
If you have a support coordinator, schedule an urgent meeting to discuss:
- How the funding cuts may affect your specific plan
- Strategies to document the necessity of your current supports
- Alternative funding sources or mainstream services that might supplement reduced NDIS funding
- Preparation for your next plan review or reassessment
Support coordinators can help navigate the administrative complexity of the NDIS, which research has shown can be particularly burdensome for certain social groups (Carey et al., 2021). If you do not currently have a support coordinator, consider whether this support might help you through the transition period.
3. Prepare for Reassessment
With the I-CAN functional capacity assessment tool being implemented, participants should:
- Understand what functional capacity assessment involves and how it differs from diagnosis-based assessment
- Prepare to clearly articulate how your impairments affect your capacity to perform daily activities, participate in employment or education, and engage in community life
- Consider whether your current reports adequately describe your functional limitations or whether updated assessments are needed
- Be ready to explain how your environment and aspirations interact with your impairments to create support needs
4. Review Your Current Plan Usage
Examine how you are using your current funding:
- Ensure you are utilising all approved supports appropriately
- Document the outcomes and benefits of each support category
- Identify which supports are most critical to your wellbeing and independence
- Be prepared to justify the “reasonable and necessary” nature of your supports, as this criterion has become increasingly contested in NDIS implementation (Hummell et al., 2025)
5. Explore Mainstream and Community Alternatives
While the Inclusive Communities Fund is being developed, begin investigating:
- Mainstream services that might provide some supports previously funded through NDIS
- Community organisations offering activities or programmes for people with disability
- Local council disability services and inclusion programmes
- Peer support networks and advocacy organisations
This preparation is particularly important given the timing gap between funding cuts and the availability of Inclusive Communities Fund alternatives.
6. Understand Your Review and Appeal Rights
Familiarise yourself with:
- The NDIS review and appeals process
- Your rights to request internal review of plan decisions
- The role of the Administrative Appeals Tribunal in NDIS disputes
- Advocacy services that can support you through review processes
Research has documented that the NDIS can be administratively cumbersome, with burdens exacerbated for particular social groups (Carey et al., 2021). Understanding your rights and accessing advocacy support can help address these challenges.
Looking Ahead: The Future of the NDIS
The April 2026 announcement represents a decisive shift in the NDIS’s trajectory. While the government frames these changes as necessary to ensure the scheme’s sustainability and return it to its original intent, research suggests the reforms reflect deeper tensions between disability rights principles and cost containment imperatives.
The government’s aim to reduce NDIS growth to 2% per year until 2030 means that even as the scheme continues to grow nominally, expenditure will decrease in real terms given current inflation rates exceeding 3%. For people with disability continuing to experience cost-of-living challenges and increased living costs associated with disability, these assurances of continued growth offer limited comfort.
The success of these reforms will depend significantly on how effectively the Inclusive Communities Fund can replace individualised supports, how fairly the I-CAN tool assesses functional capacity across diverse disability types, and whether new eligibility criteria can balance consistency with the individualised, rights-based approach that was central to the NDIS’s original vision.
How Centre Disability Support Can Help
During this period of significant change and uncertainty, having experienced, knowledgeable support is more important than ever. Centre Disability Support is an NDIS Registered organisation with extensive experience helping participants navigate complex NDIS processes, prepare for plan reviews, and maximise their funding outcomes.
Our team understands the challenges posed by the April 2026 reforms and can provide:
- Expert guidance on preparing for functional capacity assessments
- Support in gathering and presenting evidence for plan reviews
- Assistance in documenting the outcomes and necessity of your current supports
- Help navigating the review and appeals process if your funding is reduced
- Connection to mainstream and community services to supplement NDIS supports
- Ongoing support coordination throughout the transition period
Contact Centre Disability Support today:
- Phone: 1300 433 661
- Email: [email protected]
RELATED ARTICLES
How Much Does SIL Cost in 2026?
How to Request a Plan Reassessment in 2026
The Complete 2026 NDIS Eligibility Checklist
References
- Carey, G., Malbon, E., Olney, S., & Reeders, D. (2021). Administering inequality? The National Disability Insurance Scheme and administrative burdens on individuals. Australian Journal of Public Administration, 80(4), 854–872. https://doi.org/10.1111/1467-8500.12508
- Dickinson, H., & Ganon-Davey, E. (2026, April 27). Tightened eligibility and cuts to plans: What the NDIS changes mean for participants. InSight+. https://insightplus.mja.com.au/2026/16/tightened-eligibility-and-cuts-to-plans-what-the-ndis-changes-mean-for-participants
- Hummell, B. M., Carey, G., Malbon, E., & Dickinson, H. (2024). Agendas of reform: Continuity and change in Australia’s National Disability Insurance Scheme (NDIS). Social Policy and Society, 23(3), 456–475. https://doi.org/10.1017/s1474746424000101
- Hummell, B. M., Carey, G., Malbon, E., & Dickinson, H. (2025). Policy shifts and drifts: From intention to implementation of Australia’s National Disability Insurance Scheme. Australian Journal of Public Administration, 84(1), 89–108. https://doi.org/10.1111/1467-8500.12689
This article is intended for informational purposes only and does not constitute legal or financial advice. Participants should consult with qualified professionals regarding their individual circumstances.
