Ahead of Budget night, expectations were already relatively low that this would be a major health or mental health Budget, with much of the Government’s focus anticipated to centre around broader economic pressures, cost-of-living measures, and frankly cuts to the health budget, namely NDIS. Several announced measures will require much closer examination as further details become available. AAPi will undertake additional analysis and participate in several government and sector briefings in the coming days and weeks. We will keep members updated with developments.
Even with that context, AAPi remains deeply disappointed by the limited attention given to mental health and psychology, particularly given the ongoing levels of psychological distress being experienced across the community and the increasing difficulty many Australians face accessing affordable psychological care. Mental health was not identified as a standalone priority area within the Budget fact sheets, despite the scale of mental health need currently facing the Australian community. This is particularly concerning given mental health conditions and substance use disorders account for almost 15% of Australia’s total burden of disease, yet receive only around 7% of overall health expenditure.
AAPi remains concerned that Australians continue to experience high levels of psychological distress while access to affordable, ongoing psychological care remains increasingly difficult. If any other area of healthcare represented such a significant proportion of disease burden while receiving less than half the corresponding level of funding, it would likely be viewed as a national crisis.
This is occurring against the backdrop of an estimated $220 billion annual economic cost associated with mental ill-health and suicide, alongside significant workforce participation and productivity impacts. Investment in mental healthcare should not be viewed simply as a budgetary cost, but as an investment in productivity, workforce participation, prevention, and long-term economic stability.
AAPi also notes the ongoing scale of unmet psychosocial support needs outside the NDIS. Recent national analysis estimated there were approximately 230,500 people aged 12–64 with severe mental illness who required psychosocial supports but were not receiving support through the NDIS or other government-funded programs. The is an estimated more than 14 million hours of psychosocial support needs went unmet.
DVA allied health fee increase and new annual limit- from 1 July 2027
One of the very few areas that psychologists and their clients will see a benefit from in the 2026 budget is a significant increase in allied health fees, removal of current treatment cycle requirements, and introducing a $5000 annual Monetary Limit for allied health services.
Fee increases will apply to allied health providers delivering services to veterans, including psychology. A 50+ minute psychology consultation in rooms (item US14) is currently $163.40 and will increase to $260. All fees will increase, but the detailed fee schedule has yet to be released and is likely to become available when the fee changes take effect on 1 July, 2027. We acknowledge that this is still some time away and will provide more details as they become available. AAPi has a specific DVA briefing on Thursday.
Also announced is a new $5,000 Annual Monetary Limit that Veteran Card holders can use on allied health services each financial year, based on individual treatment preferences. DVA will have a mechanism to consider funding above the $5,000 limit where there is a valid clinical need. It also removes existing referral requirements for veterans (the Treatment Cycle).
Disability
A major focus of the Budget was continued reform of the NDIS. When we read the word “reform” and NDIS in the same sentence, this does essentially mean cuts to lifesaving care and services for people with disability.
Key Disability measures include:
- $126.1 million over five years from 2026–27 for a Medicare-funded three-year-old health assessment to support early identification of developmental delay or neurodevelopmental difference.
- $99.5 million over five years from 2026–27 to support parents, carers and kin of children with developmental concerns or autism, including through Mental Health in Primary Schools, the Positive Partnerships Program, and a National Digital Child Health Record via My Health Record.
- $48.4 million over three years from 2025–26 to the Department of Health, Disability and Ageing and the NDIA to support consultation on and implementation of NDIS reforms.
- $3.3 million in 2026–27 to establish a Technical Advisory Group on the design of functional capacity assessment tools.
- $200 million over three years from 2026–27 (held in the Contingency Reserve) to establish an Inclusive Communities Fund supporting group-based social and community participation activities and individual capacity building for NDIS participants.
The Government has now also released a proposed implementation timeline for the NDIS reforms, with consultation and legislative changes commencing in mid-2026.
Key proposed changes include:
- Introduction of tighter criteria for unscheduled plan reassessments
- New record-keeping obligations for participants and providers
- Expanded compliance and enforcement powers for the NDIA
- Consultation on a new eligibility process based on standardised functional capacity assessments
- Progressive “resetting” of some participant budgets for social, civic, community participation and capacity building supports
- Changes to plan rollovers from February 2027, including unspent funds no longer carrying over between plans
- Transition to “new framework planning” from April 2027
- New access arrangements from January 2028, including reassessment processes for existing participants over a two-year period.
Thriving Kids will progressively roll out from October 2026 and is aimed at supporting children aged 8 years and under with developmental delay and/or autism who have low to moderate support needs. A new Medicare-subsidised developmental health assessment for 3-year-olds through GPs, and the development of a National Digital Child Health Record to support information sharing and developmental tracking. The Government has also indicated the initiative will focus on improving access to supports within children’s everyday environments and upskilling key workforces supporting child development. AAPi will be working towards psychologist inclusion in these areas.
AAPi is acutely aware that discussions about “budget savings” and reducing NDIS growth are not abstract financial conversations, they directly affect people with disability, families, and the practitioners supporting them. We also recognise the significant anxiety and uncertainty many participants and psychologists are currently experiencing regarding the future direction of the scheme.
First Nations
The Budget included additional investment in culturally safe First Nations healthcare and crisis support, including expanded funding for the 13YARN national crisis support service. The funding is intended to help respond to increasing demand, continue community and digital engagement activities, and establish a new crisis support text line for First Nations peoples.
The Budget also included investment in new and upgraded Aboriginal Community-Controlled Health Service (ACCHS) infrastructure, including health clinics and associated housing for healthcare professionals, particularly in regional and remote communities. These measures aim to improve access to culturally safe healthcare and strengthen service delivery capacity in areas experiencing ongoing workforce and infrastructure pressures.
Responding to the Bondi Attack
The Budget included targeted funding measures responding to the Bondi terrorist attack and its impacts on affected individuals, communities, and services.
In partnership with the NSW Government, $21.7 million has been committed through Disaster Recovery Funding Arrangements to support the Bondi community. This includes funding for Jewish community organisations, legal services, local small businesses, and community coordination and capacity-building supports.
The Government also announced $42.9 million in mental health supports for the Jewish community and the broader Bondi community, including the establishment of an interim Medicare Mental Health Centre in Bondi, providing free walk-in mental health support.
Additional measures focused on countering hate speech, violent extremism, and terrorism, with $604.2 million committed toward initiatives aimed at strengthening hate crime responses, disrupting politically and ideologically motivated violence, and progressing firearm reforms.
Further funding was also allocated to support Jewish Australian communities, including security and infrastructure upgrades, grants for community priority projects, and implementation of recommendations arising from the Royal Commission on Antisemitism and Social Cohesion and the Special Envoy’s Plan to Combat Antisemitism.
Aged Care
There were significant aged care measures announced designed to support older Australians to remain living at home for longer, including faster delivery of Support at Home packages, fully funded personal care supports such as showering and continence management, and additional support for people nearing end-of-life who wish to remain at home. The Government also announced expanded dementia supports, including additional Specialist Dementia Care Program units and expansion of the Hospital to Aged Care Dementia Support Program to assist people living with dementia transition from hospital into appropriate aged care supports.
Women’s Health
There is $2.8 million to continue support for Endometriosis and Pelvic Pain Clinics to provide specialist care for women experiencing endometriosis, pelvic pain, perimenopause and menopause and $13.1 million over three years to improve understanding of the causes of stillbirth, provide support to grieving families and prevent future occurrences. The Budget also includes a reference to funding to continue progress toward universal perinatal mental health screening.
A National Menopause Awareness Campaign, supported by training for health professionals to improve diagnosis, workforce participation and care quality.
In our pre-Budget submission, AAPi called for:
- Increased Medicare rebates for clients of all psychologists
- Expansion of Better Access sessions from 10 to 20 sessions annually for people with higher support needs
- Medicare eligibility for provisional psychologists to strengthen workforce capacity and reduce waitlists
- Rural and regional psychology workforce incentives
- Increased Commonwealth Supported Places for psychology training
- Expanded Commonwealth Prac Payment eligibility to reduce placement poverty
- Structured graduate and placement programs across Commonwealth-funded mental health services
- Dedicated funding to support implementation of psychology training pathway reforms.
AAPi welcomes several targeted investments within the Budget, particularly those supporting veterans, perinatal mental health initiatives, culturally-safe healthcare, dementia supports, and early childhood developmental supports. However, substantial gaps remain in broader access to affordable psychological care for the wider community.
AAPi will continue actively engaging with government, departmental stakeholders, and sector working groups to ensure the voice of psychologists and the communities they support remains represented throughout these ongoing reforms and funding discussions. We will continue to keep members updated on further Budget related matters.
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