Huge cuts to national disability insurance scheme aim to save more than $36bn in budget’s largest single measure | Australian budget 2026
The government expects to recoup $36.2 billion by restricting the growth of the national disability insurance scheme over the next four years as it plans to return to the NDIS’ “original purpose” of supporting people with “significant and permanent disabilities”.
Finance Minister Jim Chalmers said the budget’s savings package amounted to real economic reform beyond the “usual cuts”.
“It’s all about saving the NDIS from itself,” he said on Tuesday.
“It’s all about making sure we can continue to provide. [the] “The country can afford the support people need and deserve.”
Budget papers show changes to limit who can access the NDIS, which supports more than 760,000 disabled Australians, and will reduce participant payments by at least $37.8 billion by 2030.
Health secretary Mark Butler last month announced sweeping changes to cut the scheme’s growth to 2% a year by the end of the decade to prevent its budget from exceeding $100 billion a year by the mid-2030s.
Budget documents show the plan to reduce the growth of the NDIS is by far the budget’s biggest cost-saving measure.
The National Disability Insurance Corporation, which runs the scheme, is also facing cuts; Headcount falls by 669 to 9,840 in the next financial year.
But the NDIS Quality and Safety Measures Commission will add almost 200 more staff as the government expands registration requirements for service providers.
Budget documents show the government expects payments to participants to remain steady at between $53 billion and $54 billion a year until 2030, while employee benefits will halve between 2027-28.
Butler will introduce legislation this week to begin overhauling the plan. The focus is expected to be on limiting the number of unplanned reassessments, which the minister said have been the “main driver” of spending growth in recent years.
The cost of the plan rose by more than 10.3% last year and was on track to cost $63 billion by 2028-29. Without changes, it was projected to support more than 1 million participants by 2033 and cost $95.8 billion in 2034-35.
“The cost of the NDIS is too high and growing too quickly with any similar government programme,” Butler said last month.
“And if we don’t take action to make this sustainable, it won’t happen in the future for the Australians who need it most.”
He said the eligibility changes would reduce the number of people using the program to about 600,000 by 2030, which would be lower than the estimate of 900,000 participants.
A new standardized assessment tool to determine a person’s NDIS access will be available from 1 January 2028.
“These are difficult decisions, but they are inevitable and urgent,” Butler said.
Programs other than the NDIS for those no longer eligible will receive $3 billion from the federal government over the next five years; This figure will also be covered by states and territories.
The Successful Kids programme, for children under nine with autism and developmental delays, will be rolled out from October and is expected to be fully operational from January 2028.
