Federal Health Minister Mark Butler has warned Australia’s National Disability Insurance Scheme (NDIS) is “growing too fast” and “costs too much”, outlining a series of changes he says are “hard but unavoidable”.
Speaking at the National Press Club on Wednesday, Butler said the scheme needs to be overhauled to ensure it remains sustainable into the future.
So, what’s changing and what does it mean for older Australians and their families?
A tighter NDIS, with stricter eligibility
Under the proposed reforms, new eligibility rules will be introduced to curb growth in the NDIS, with the aim of reducing participation to 600,000 people by the end of the decade.
The scheme currently supports around 760,000 Australians and is projected to cost more than $50 billion a year.
“The NDIS was originally intended to support around 410,000 people with a disability,” Butler said.
With the changes, the scheme is expected to cost about $55 billion by 2030, instead of the previously forecast $70 billion.
Who will be eligible for the NDIS?
Butler said assessments will now look at a person’s “functional capacity that impacts their day-to-day living”, moving away from eligibility lists based purely on medical conditions.
A new national assessment tool will be introduced in January 2028 and used to assess new applicants and reassess existing participants.
People with lower support needs, or those assessed as having higher functional capacity, may no longer qualify for the scheme.
Advocates say the changes could disproportionately affect people with autism, who make up close to half of current NDIS participants.
Everyday care to become free for older Australians
The government will invest around $1 billion to change how certain in-home supports are classified under the Support at Home program.
Showering, continence management and dressing will be reclassified from “personal care” to “clinical care”, meaning they will be provided at no cost.
“Dignity in older age, through a world-class aged care system, is the least our parents and grandparents deserve,” Butler said.
Cuts to social and community supports
Funding for social and community participation, which helps people stay connected and engaged, will be scaled back.
This includes activities such as group classes, fitness programs, social outings and skills development.
The government plans to reduce this component from an average of $31,000 to $26,000, bringing it back in line with 2023 levels. Butler said budgets in this category will be cut by around 30 per cent, acknowledging the changes will have a “material impact” on participants.
Instead, $200 million will be redirected into a new Inclusive Communities Fund, designed to help organisations create more opportunities for people with disability to participate in their local communities.
Stricter rules for providers
The reforms will also introduce tighter regulation of service providers, with more “higher risk” supports – including personal care and daily living assistance – requiring mandatory registration.
However, Butler said a blanket approach wouldn’t be necessary.
“We don’t need to monitor retail purchases from a chemist the same way we monitor close personal care of vulnerable people,” he said.
Changes to private health insurance for over-65s
More than three million Australians aged over 65 could will face higher private health insurance costs.
Currently, older Australians receive a higher subsidy on private health cover than other age groups. The government plans to scale this back, bringing it in line with the standard rebate and redirecting the savings into aged care.
“It’s simply not the best way to spend precious taxpayers’ dollars on behalf of older Australians when we need to do so much heavy lifting in aged care,” Butler said.
“I understand this won’t be a welcome decision for many, but it’s the right thing to do.”
A boost for dementia care
There is also new funding aimed at improving care for people living with dementia, with more than $200 million allocated to expand specialist services, including 20 new Specialist Dementia Care Units.
According to Dementia Australia, an estimated 446,500 Australians are currently living with dementia.
“We know that people living with dementia are disproportionately impacted when demand for limited care places is high,” said Dr Kaele Stokes, Executive Director Services, Engagement and Research at Dementia Australia.
“The number of Australians living with dementia is expected to increase to more than one million by 2065, so it is critical that care right across the spectrum is available.”
