What actually changes under the NDIS reform bill 2026

The National Disability Insurance Scheme Amendment (Securing the NDIS for Future Generations) Bill 2026 is before the Senate and expected to pass. This article focuses on the practical changes — what is actually different, for whom, and when. Sources are linked throughout.

Eligibility: from diagnosis to functional capacity

The biggest structural change is how eligibility is assessed. As the Department of Health explains, the reforms shift the focus from diagnosis to functional capacity — meaning what matters is how a person's impairment affects their ability to participate in daily life, not just whether a diagnosis exists. The definition of a "permanent" impairment is also tightened: under the new wording, as 4titude notes, an impairment will only be considered permanent if further treatment is unlikely to materially improve, reverse or alleviate its impact.

New entrants to the scheme will be assessed against the new functional capacity model. Existing participants will face the new criteria at their next plan review or reassessment. As Dedicated Plan Management explains, the version of the bill that entered the Senate includes an important protection: no one can be required to try a treatment or medication they do not want as a condition of accessing the NDIS.

Plan sizes: coming down

As Like Family summarises, the reform targets bring average plan sizes down from around $31,000 to $26,000. The government's projections show this contributes to $37.8 billion in reduced scheme growth over four years. Reductions to social and community participation funding began from mid-2026. Participants whose plans are due for review should document how their funded supports contribute to their independence, health and participation — this evidence matters at reassessment.

Provider registration: expanding

Mandatory registration is being expanded in stages. According to the government's reform timeline, SIL (Supported Independent Living) providers were required to register from July 2026. Broader expansion of mandatory registration will begin from July 2027, with full implementation by end of 2030. Unregistered providers — including most independent support workers — are not immediately affected, though the direction of travel is toward a more regulated market.

Digital claims and payments: new system rolling out

A new digital claims and payments system is being rolled out from July 2026, with full implementation expected by end of 2030. As Like Family notes, all providers will ultimately be required to use the new system. The current PRODA system remains in place during the transition. Providers should ensure their invoicing is using the correct 2026-27 support item codes — the new system will likely have stricter validation.

Fraud powers and audit: significantly strengthened

As Centre of Hope explains in detail, the bill expands the NDIA's powers to identify, investigate and respond to fraud and non-compliance. From 1 July 2026, the NDIA can require information and documents from providers, conduct on-site visits and audits, and impose higher penalties for fraud and over-claiming. The bill also makes changes to the Crimes Act 1914 to align serious fraud offences. For providers, this means documentation, audit-readiness and Code of Conduct compliance are no longer optional extras — they are the baseline expectation.

Automated decisions: must be reviewable by a human

One protection secured through the House amendments: any NDIS decision made with the assistance of automated systems must be able to be reviewed by a human. This was a specific concern raised during the inquiry about the use of AI in plan decisions. Advocates had flagged that automated tools could make consequential decisions without adequate human oversight.

What is not changing — yet

The bill has not passed into law as of 16 August 2026. Current plans continue unchanged until a participant's next scheduled plan review. The NDIA's stated position is that nothing will change for now. New eligibility criteria are not expected to affect most existing participants until 2027 or 2028. The pace and sequencing of changes matters — and it is still being negotiated in the Senate.

This article is general information dated 16 August 2026. It is not affiliated with or endorsed by the NDIA. For official information visit ndis.gov.au. For advice about your own plan speak to your planner or an independent advocate.