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Today, Minister Butler addressed the National Press Club to outline a number of proposed NDIS reforms. Importantly, nothing changes immediately for psychologists, and there is significant work, consultation, and legislation still to come.

We know there has been a high level of anxiety in the lead-up to today’s announcement, particularly for participants and their families and psychologists working in the NDIS space, alongside some unhelpful and, at times, stigmatising language in parts of the media coverage.

Below is a clear summary of what has been announced and what it means for you.

Key timing updates

  • The rollout of the new framework planning has been delayed from July 2026 to 1 April 2027. This is a positive development that provides more time for consultation and testing and, importantly, gives AAPi a greater opportunity to influence the design of these systems.
  • The reduction in social and community participation budgets (primarily affecting funded support worker hours) is expected to begin in October 2026. 
  • Tighter rules around unscheduled plan reassessments and progressive plan changes from February 2027.
  • New eligibility rules based on functional capacity are expected to apply from 1 January 2028, with current participants reassessed over time.
  • The Government will introduce legislation in the coming months. These reforms are not yet law and must pass Parliament before taking effect.
  • We will keep members updated with further information.

Shift to functional capacity assessments

Access to the NDIS will move to standardised, evidence-based assessments of functional capacity, replacing diagnosis-based access lists.

This means:

  • Diagnosis alone will no longer determine access
  • The focus will be on significant functional impairment impacting daily life
  • All current participants will be reassessed over time under the new model
  • The Government has flagged an expectation of fewer participants overall

AAPi will be strongly advocating in this space to ensure psychologists’ expertise and professional judgement remain central. You can read our initial media release on this here.

Removal of access lists

NDIS diagnosis-based access lists will be removed as part of this shift to functional assessment.

Changes to plans and reassessments

  • Stop unspent funds from being rolled over to new plan periods, with budgets resetting/being reassessed at the end of the plan periods.
  • Tighter criteria for unscheduled reassessments
  • Stronger focus on what is considered “reasonable and necessary” 

“Reasonable and Necessary” 

The Government has identified that a lack of clarity around what constitutes “reasonable and necessary”. To address this, the Government has flagged the following changes:

  • Reinforce the boundary between the NDIS and mainstream services
  • More consistently assess whether the NDIS is the appropriate system of support, including whether treatment could alleviate or remedy an impairment
  • Strengthen guidance around what is considered “reasonable and necessary”
  • Introduce standardised, evidence-based functional capacity assessments to determine access
  • Remove diagnosis lists as the means of entry to the NDIS
  • End plan rollovers and stop unspent funds being carried forward
  • Tighten criteria for unscheduled reassessment requests, while ensuring participants with significant changes in need can still request plan variations

This signals a significant shift toward tightening eligibility, clarifying scheme boundaries, and aligning supports more closely with the original intent of the NDIS.

AAPi supports the need for greater clarity and consistency in decision-making across the NDIS. However, we are strongly concerned that overly rigid interpretations of “reasonable and necessary”, particularly when combined with standardised assessment models — risk excluding individuals who require nuanced, clinically informed support.

Support needs do not always present in simple or uniform ways, and the effectiveness of intervention cannot always be determined through standardised or reductionist frameworks alone. Any reforms in this area must ensure that clinical expertise, professional judgement, and individualised assessment remain central to decision-making.

AAPi will advocate to ensure that these changes do not restrict access to appropriate psychological supports or undermine the quality of care provided to participants.

Social and community participation changes

  • Participant budgets for social and community participation will be reset and reduced over time
  • A $200 million Inclusive Communities Fund will be introduced to rebuild community-based supports 
  • Changes to these supports are expected to begin in October 2026.

Crackdown on intermediaries

Significant reforms to plan managers, support coordinators and SIL providers, including:

  • Move toward commissioned/provider panel models
  • Reduced reliance on third-party intermediaries
  • New support coordination model from July 2028
  • New plan management model from October 2027

Provider regulation changes

  • Expansion of mandatory provider registration, particularly for higher-risk supports
  • New provider enrolment requirements
  • Gradual implementation from July 2027 through to 2030

AAPi has been involved in several consultations regarding mandatory registration, and it is our position that any further registration model should avoid unnecessary administrative burden or costs on psychologists. There should be recognition of the professional standards and regulatory obligations that psychologists already meet.

Digital payment and fraud controls

  • Introduction of enhanced claims and payment systems
  • Increased evidence requirements for payments
  • Greater oversight and enforcement powers to address fraud and non-compliance 

Psychosocial disability

  • Psychosocial disability was not identified as an area for cuts. The Minister noted that this cohort was likely underrepresented in the NDIS, consistent with AAPi’s long-standing advocacy.

What this means for psychologists today

  • No immediate changes to psychology practice or funding
  • Changes are staged over several years (2026–2030)
  • Many elements, particularly functional assessments, are still to be designed.

AAPi has a seat at the table and will be actively involved in shaping these reforms. Our focus will be to:

  • Ensure psychologists’ expertise is embedded in assessment processes
  • Advocate against overly rigid, one-size-fits-all models
  • Protect appropriate access to psychological services
  • Represent the real-world experience of members and clients

While the Government has presented these reforms in polished language and positioned them as necessary improvements, the practical reality is likely to be fewer people accessing the NDIS and reduced plan budgets for many participants. We expect that these changes will not occur in isolation, but form part of a broader program of ongoing reform. That said, we do not want to be alarmist. The full impact will only become clear once we receive further briefings and have the opportunity to review draft legislation and implementation details. What we do know is that some of these announced changes will directly affect your clients, their families, and many of our members. AAPi will continue to monitor developments closely, advocate strongly on your behalf, and provide clear, practical guidance as more information becomes available.

Further information

Minster Butler National Press Club Speech
Summary of the changes
Auslan summary
Q&A with Minister Butler, National Press Club – 22 April 2026