Changes to the NDIS Act

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The final report of the Independent Review of the NDIS ‘Working together to deliver the NDIS’ was delivered on 7 December 2023.

In December 2023, the Prime Minister and state and territory governments agreed to an initial response to the final report of the NDIS Review. This included introducing changes to the legislation.

In March 2024, the Australian Government introduced changes to the NDIS Act 2013 through the National Disability Insurance Scheme Amendment (Getting the NDIS Back on Track No 1) Bill 2024, based on key recommendations of the NDIS Review, to make the NDIS better for participants of the Scheme.

The Bill passed the Australian Parliament on 22 August 2024, with parliamentary amendments being agreed to clarify key elements - and will commence 28 days after Royal Assent (which is expected to happen in the week of 2 September).

Legislative changes to the NDIS Act

The changes to the NDIS Act will: 

  • clarify for participants the basis on which they met access for the scheme through early intervention or disability requirements
  • enable better early intervention pathways including children
  • enable holistic assessments of participant’s disability related support needs to how NDIS participant budgets are set 
  • provides clearer information on how flexible budgets can be spent through a new definition of ‘NDIS support’ 
  • strengthen the co-governance of the Scheme with states and territories
  • enable quality oversight of auditors by the NDIS Quality and Safeguards Commission.  

Many of the changes to the NDIS will be implemented through new NDIS Rules. The new NDIS Rules will outline how people can access the NDIS, what assessments are needed, and how budgets will work. These changes will be developed with the disability community and states and territories.

What this means for new participants

New participants will be advised whether they are accessing the Scheme under the early intervention (section 25) or permanent disability (section 24) pathways, meaning the NDIS will work differently for different groups of people based on their needs.

From 1 January 2025, participants will receive a notice of the impairments for which they meet the disability or early intervention requirements, and this will be subject to internal and external merits review.

New participants who join before the new planning framework commences (refer below) will receive an ‘old framework plan’ before transitioning to the new planning framework once new rules are in place.

What this means for existing participants

No changes to access.

A participant will continue on an ‘old framework plan’ (see below) until rules are developed and the new planning framework commences.

As part of transitioning to new framework plans, participants will receive an impairment notice, detailing impairments that meet the disability or early intervention requirements, and this will be subject to internal and external merits review.

Old framework plans

The Bill amends old framework plans to specify a ‘total funding amount’ for all supports under the plan and at least ‘one funding component amount’, which is the total amount of funding for a group of supports.
These changes will allow greater oversight and clarity or participants of their total funding amount.

These changes will not commence until the Minister makes a legislative instrument setting out how to work out these amounts.

A participant will be able to request a payment outside of their funding in exceptional circumstances (section 47A).

New framework plans

All participants will eventually transition to a new framework plan. The NDIS Review envisaged the timeframe for transition of all NDIS participants to the new needs assessment and budget would take at least 5 years. This timeframe has been identified to allow for co-design and consultation on the tools and NDIS rules that need to be in place for new framework plans and is consistent with the recommendations of the NDIS Review. Rules will identify which classes of participants will receive new framework plans and the period within which the CEO must give a notice of the transition to each participant within that class.

Needs Assessment

One of the major changes introduced by the Bill and recommended by the NDIS Review is to assess participant needs at a ‘whole-of-person’ level, rather than based on individual support items (section 32L).

The needs assessment tool(s) and skills and qualifications of assessors will be the subject of extensive consultation and discussion with people with disability and other experts to ensure they are fit-for-purpose and account for the multifaceted and diverse experience of disability.

New planning and budget model

While the assessment itself is holistic, funding for supports under the NDIS can only be provided in relation to impairments that meet the disability or early intervention requirements (section 32L and 32K). 

The process for developing a plan, including a needs assessment, remains subject to internal and external review (section 99).

Participants will be provided with a plan budget amount and participants will be expected to manage funding within their budget.

A participant can request a payment outside of their funding in exceptional circumstances (section 47A).

Participants will continue to be able to choose their plan management type. However, if a self-managed or plan-managed participant has not managed previous plans within the budget amount, the NDIA may choose a different plan management type for all or some of the budget. This extends to where plan nominees and/or plan managers have not managed previous plans within the budget amount (section 43(2A) and section 43(4a)).
The plan includes a flexible budget and may also include stated supports for specific items identified in the rules (section 32E in item 36).

To support the operation of flexible budgets, new rules will set out what NDIS funding can and cannot be spent on, which will make it easier for participants to understand what NDIS funds can be used for.

Claims and payment framework

The Bill also establishes a legislative claims and payments framework for the NDIS.

The NDIS Act does not currently have a legislated claims and payments framework which has led to confusion for participants and providers alike on how claims should be made, and how and when the NDIA must pay relevant amounts. The NDIA processes approximately 400,000 claims per day.

The NDIA will work with the disability community to design the payment framework to ensure it is accessible and meets the needs of different participants and their plan management arrangements.

Engagement

We asked for your feedback on what goods and services should be NDIS supports.

We will shortly publish a What we have heard report to share with you what we heard during the consultation.

Visit DSS Engage to learn more about the consultation.

Next steps

Now the legislation has passed, the Australian Government will go through a consultation and co-design process with the disability community on updates to the NDIS Rules—continuing to put people with disability at the heart of NDIS reforms.

We are considering the feedback provided through the section 10 draft list of NDIS supports consultation process and will report back to community shortly.

Once the report has been delivered, we will open consultation on section 33 (total funding amounts, funding component amounts and funding periods) and section 44(5) (plan management) rules.

We will provide further information about proposed timeframes for consulting with the disability community and states and territories on rules and instruments made under the Bill.

The changes will take time to develop and will be implemented in stages, using a phased and considered approach.

More information about the co-design approach, including specific opportunities to engage, will be publicised in the coming weeks.

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The Department of Social Services (DSS) and the National Disability Insurance Agency (NDIA) are working together to improve the NDIS. You can find the latest updates on our Frequently Asked Questions page.

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