The NDIS needs reform, but tightening eligibility before alternative supports are ready risks abandoning people with disability and retreating from the citizenship principles on which the scheme was built.
When the National Disability Insurance Scheme was launched in 2013, it represented the most significant advance in Australian social policy since Medicare. For the first time, Australians with significant and permanent disability had an individual, enforceable entitlement to support, not rationed by state budget cycles, not dependent on where they lived, and not determined by what services happened to be available locally. For many participants and their families, the scheme was genuinely transformative.
It is worth saying that clearly before saying anything else. The current reform debate, dominated by cost figures and sustainability concerns, risks obscuring how much the NDIS has meant to the people it serves. Understanding why reform is now necessary requires holding both truths at once.
The NDIS has grown well beyond its original projections. The Productivity Commission estimated in 2011 that the scheme would serve around 411,000 people at approximately $22 billion annually. By 2023–24 it was supporting more than 600,000 participants at a cost of nearly $44 billion. It is on a trajectory toward $92 billion by 2032.
The politically convenient explanation is that the scheme became too generous. The accurate explanation is more troubling. A substantial part of the growth in NDIS costs reflects the failure of other systems. As state governments reduced funding for home and community care, mental health programs and lower-intensity disability support, people who would previously have been served outside the specialist system found the NDIS was the only funded option available. The 2023 Independent Review put it plainly: the scheme had become ‘the only lifeboat in the ocean’. Research from the University of Melbourne found that nine in 10 people with disability outside the NDIS could not find the support they needed.
At the same time, genuine design problems had emerged. The planning process was highly variable, with outcomes shaped less by need than by the quality of documentation, the skill of advocates and the capacity to navigate complexity. People with psychosocial disability, those from culturally and linguistically diverse backgrounds, and those in regional and remote areas were systematically disadvantaged. The provider market also grew largely unregulated: by 2024–25, for every registered provider there were approximately 15 unregistered ones. The Disability Royal Commission documented in sobering detail what this regulatory gap had produced.
The government’s reform program has several elements that respond to these problems. Stronger provider regulation is the most defensible part: mandatory registration, expanded powers for the NDIS Quality and Safeguards Commission, and provider panels for high-risk support categories are genuine responses to genuine failures. The shift toward more structured planning also has merit. Inconsistency in the first-generation planning process was a form of inequity that distributed resources according to administrative advantage rather than need.
The investment in foundational supports for people with disability outside the NDIS, agreed in principle at National Cabinet in December 2023, is essential. The only sustainable solution to the lifeboat problem is to rebuild supports for people with lower-level needs. The question is whether the commitment is being honoured at the pace and scale the problem requires.
The proposed 2026 NDIS amendment legislation would remove approximately 160,000 people from the scheme through tighter eligibility thresholds. That may ultimately prove the right policy. The problem is timing. Foundational supports are not ready. Thriving Kids, the early intervention program for children with developmental delay, is still being negotiated with states and territories. The community infrastructure that the 2023 Review said should have been operational from July 2025 has not been built.
Narrowing the NDIS before alternative systems are ready carries a structural risk that Australian disability policy history knows well: in the 1980s and 1990s, Victoria’s deinstitutionalisation program closed institutions faster than community services could absorb their residents. The consequences endured for years.
The proposed algorithmic planning tool, I-CAN, raises a separate concern. Algorithmic systems are not neutral. Every tool of this kind embeds choices about which needs count and how different types of disability are valued. When those choices are inaccessible to participants, the practical ability to challenge decisions that do not reflect individual circumstances is significantly reduced. Consistency and equity are not the same thing.
What good reform requires, and what the current program has not convincingly demonstrated, is three things. First, sequencing discipline: the narrowing of NDIS eligibility should be explicitly linked to the demonstrated readiness of foundational support alternatives. Second, algorithmic accountability: the I-CAN tool should be publicly transparent about its design assumptions, co-designed with people with disability and subject to independent monitoring. Third, intergovernmental honesty: the states and territories whose withdrawal of mainstream services drove demand into the NDIS must be held to binding, measurable commitments to rebuild those services.
The NDIS was founded on the proposition that people with disability are citizens with entitlements, not welfare recipients subject to administrative discretion. Reform that reduces costs by reducing the practical scope of citizenship, rather than by building more efficient and equitable conditions for realising it, will have succeeded in fiscal terms while failing on the grounds that matter most.
Tom Keating
Dr Tom Keating is a Melbourne based writer and researcher. He is a former senior executive in health and human services in Victoria and a former senior academic with appointments in various Australian and overseas universities. He played a major role in the reform of disability services in Victoria in the 1980s and 90s. His book, The Evolution of Intellectual Disability Policy and Administration in Victoria: From Care and Custody to Citizenship is forthcoming (De Gruyter Brill, 2026).