Functional capacity assessment risks excluding disability realities (Provider advocacy)

Submission 348

Rehab Health & Fitness Australia

reception@rhfaus.com.au | rhfaus.com.au

Submission to the Senate Community

Affairs Legislation Committee

National Disability Insurance Scheme Amendment (Securing the NDIS for Future

Generations) Bill 2026

Prepared by Julienne Locke on behalf of Rehab Health and Fitness Australia

Rehab Health and Fitness Australia welcomes the opportunity to provide this submission to the Senate

Community Affairs Legislation Committee regarding the National Disability Insurance Scheme

Amendment (Securing the NDIS for Future Generations) Bill 2026. As a provider working closely with NDIS participants, families and communities, we support true reform that is co-designed to improve the integrity and effectiveness of the Scheme. However, this reform is packaged together with an impact analysis showing a preferred approach includes eligibility changes and volume of supports being delivered. This legislation isn’t an attempt to fix and improve systems. Reform looks like budget cost shifting, by relying on who gets access, how their needs are assessed and how much support Participants will receive.

All attempts at reform must not be pursued in a way that reduces participant rights, narrows access to essential supports, or weakens the principles of choice, control and inclusion that underpin the NDIS. There is very little in the Bill that improves the governance and structure of the operations of the National Disability Insurance Agency.

The major themes throughout the legislation is the changes to “Whole of Person” assessment. The person with a disability is no longer at the centre of the principles of the National Disability Insurance Scheme.

This submission is made from a provider perspective, but with the participant experience at its centre. Every day in our work we see the results of decisions based on definitions, thresholds, pricing settings and delegated powers that are directly shaping whether participants can access a good life. Following passing of this legislation I am concerned for the Australians with a disability, those of whom this scheme was designed to support.

There is a reason the NDIS was championed. There were reasons people fought so hard for a scheme, one that was co-designed with their support needs at heart. There was a reason nationalisation of a disability scheme was required.

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Submission 348

Rehab Health & Fitness Australia

reception@rhfaus.com.au | rhfaus.com.au

Overview of this submission Rehab Health and Fitness Australia is concerned that many provisions in the Bill shift the NDIS away from an evidence-based, participant-centred scheme and toward a more centralised, administratively controlled model. In particular, we are concerned about the breadth of powers proposed to be conferred on the Minister, the missed opportunity of shifting pricing to a truly independent pricing authority, the proposed framing of functional capacity, and the narrowing of support eligibility through the requirement that a support be directly required because of an impairment. Taken together, these changes risk reducing transparency, limiting accountability and excluding the realities of disability as it is actually experienced by participants.

Schedule 1 – Access and planning measures:

Ministerial powers and support determinations Our primary concern is the extent of the powers proposed to be vested in the Minister. The Bill appears to enable significant policy and operational decisions affecting participant access, plan content and support settings to be determined through ministerial mechanisms rather than through transparent primary legislation or sufficiently independent processes. I would question whether any Australian Ministerial Office has seen such authority This is a substantial shift in the design of the Scheme. Powers of this breadth create a real risk that major changes to participant entitlements and support availability could occur with limited scrutiny and without adequate consultation with the disability community, providers and clinical experts. From a participant perspective, concentrated ministerial discretion creates uncertainty. Participants and families need to be able to understand the rules of the Scheme, anticipate how decisions will be made, and trust that changes affecting supports will be evidence-based and subject to robust oversight. When too much is left to executive discretion, participants may experience the Scheme as unstable, less predictable and less accountable. For providers, this uncertainty also affects workforce planning, service continuity and the ability to sustain high-quality service delivery in regional and underserved areas.

• Limit ministerial powers so that core participant rights, access settings and support parameters remain governed by primary legislation.

• Require mandatory public consultation and parliamentary scrutiny before any substantive changes to support categories, funding settings or eligibility-related instruments are made.

• Embed explicit safeguards to ensure that participant outcomes, human rights principles and clinical evidence are considered before powers are exercised.

Definition of functional capacity and the risks of assessing it in isolation The proposed definition and use of functional capacity is another major concern. Functional capacity should not be defined as an abstract measure of what a person can do in isolation from the real conditions in which they live. In disability practice, functioning is shaped by the interaction between impairment, environment, accessibility, human support and assistive technology. A legislative definition that ignores those factors risks creating an assessment model that is clinically incomplete, inconsistent with the social model of disability, and disconnected from participants’ lived experience. Functional capacity cannot be reduced to a vacuum-based assessment of bare capability. A person may only be able to communicate, transfer, regulate behaviour, travel safely, complete personal care or participate in community life because of the supports around them. Those supports may include informal supports, paid assistance, environmental modifications, transport arrangements and assistive

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Submission 348

Rehab Health & Fitness Australia

reception@rhfaus.com.au | rhfaus.com.au

technology. If the law requires functional capacity to be assessed as though those factors do not exist, it will produce decisions that do not reflect how disability is actually experienced and managed in daily life.

This is a significant move away from assessing functional capacity through a contemporary social model of disability. It also risks undermining dignity. A person’s functioning cannot be fairly understood if assessors are required to disregard the supports, technologies and environmental conditions that make everyday life possible. The effectiveness of support should not be treated as evidence that support is unnecessary. Often, it is evidence that the right support has been identified. A practical example illustrates the problem. A person with a high cervical spinal cord injury may, with assistive technology, environmental modification and human support, direct their care, communicate effectively, engage in work and participate in family and community life. If those supports are stripped away for the purpose of assessment, the person may appear to have little or no functional capacity at all. That does not mean the person has suddenly become more disabled in law than in life. It means the assessment framework has ignored the very factors that enable function. A legislative definition that requires functional capacity to be measured in isolation would therefore misstate both support need and real-world ability.

Proposed legislative definition: Functional capacity means a person’s ability to undertake activities and participate in daily life as experienced in their usual environments, having regard to the interaction between impairment, environmental barriers and facilitators, assistive technology, and formal and informal supports. Functional capacity must not be assessed on the assumption that the person is operating without the supports, technologies or environmental conditions ordinarily required to achieve safe and effective functioning.

From a provider and participant standpoint, functional capacity assessments must reflect how people function in real settings. A person may appear to have a higher level of functional capacity in a clinical environment, or when using assistive technology, or when supported by family, carers or paid workers. That does not mean their disability-related needs have diminished. It may instead reflect the effectiveness of the supports around them. If legislation fails to recognise this, participants may be penalised for using supports successfully, and essential interventions may be withdrawn precisely because they are working.

• Insert a legislative definition of functional capacity that recognises the interaction between impairment, environment, available supports, informal supports and assistive technology.

• Require assessments to be undertaken in a manner that reflects real-world functioning and does not assess a person in isolation from their usual environment, supports or assistive technology.

• Avoid policy settings that treat the successful use of support, environmental modification or assistive technology as evidence that those supports are no longer required.

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Submission 348

Rehab Health & Fitness Australia

reception@rhfaus.com.au | rhfaus.com.au

Pricing arrangements and participant safeguarding Rehab Health and Fitness Australia is particularly concerned by the proposed shift in pricing authority to the Minister, rather than directing pricing through independent and transparent processes such as those associated with the Independent Health and Aged Care Pricing Authority. Pricing is not a purely administrative matter. It directly determines whether participants can access skilled providers, whether providers can maintain safe staffing and supervision arrangements, and whether services remain available in complex, rural or thin markets.

Where pricing authority becomes more centralised and less independent, there is a heightened risk that price decisions will prioritise short-term budget outcomes over service quality, clinical complexity, participant need and participant safeguarding. If pricing is set below the true cost of delivering safe and effective allied health and disability supports, participants will feel the impact first through reduced provider availability, longer wait times, lower service intensity, and loss of continuity of care. This is especially significant for participants whose outcomes depend on sustained therapeutic relationships and consistent intervention over time. Adequate pricing is also a safeguarding issue. The regular presence of an allied health professional in a participant’s home can provide ongoing monitoring, early identification of emerging concerns, coordination with formal and informal supports, and practical assistance to strengthen participant relationships and reduce risk.

When pricing settings make these services harder to deliver, the Scheme may lose an important layer of informal oversight and early intervention that helps keep participants safe and connected.

• Immediate transfer of pricing to IHACPA for the independent pricing oversight for NDIS supports.

• Require any pricing methodology to be transparent, evidence-based and informed by provider cost structures, market conditions and participant complexity.

• Ensure pricing decisions are tested against participant access, service quality, safeguarding outcomes and market sustainability before implementation.

• Ensure pricing decisions are formed with Provider experience and the true cost of service delivery outlines, in line with other like schemes.

Schedule 2

Part 2 – Limit unscheduled plan reassessments Rehab Health and Fitness Australia has significant concerns about the proposed limitations on unscheduled plan reassessments. In practical terms, these changes appear to redraw the NDIA service guarantee by extending the period for response from 21 days to 90 days and by removing the deemed decision mechanism where the Chief Executive Officer does not respond within that timeframe. For participants whose needs have changed, delayed reconsideration can mean prolonged periods without the supports required to remain safe, stable and engaged in daily life. A service guarantee that is slower and less enforceable risks shifting the burden of delay onto participants and their families. Further shift of costs will occur downstream to health, justice and education settings due to delays expected to occur.

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Submission 348

Rehab Health & Fitness Australia

reception@rhfaus.com.au | rhfaus.com.au

The revised grounds for requesting a plan reassessment are both narrower and are certainly more vague. The introduction of language such as a “significant change” that “directly relates to a change in an existing impairment” creates concern that participants with multiple coexisting disabilities, chronic health conditions, or secondary complications may struggle to meet the threshold for review even when their support needs have clearly changed. The word “directly” is especially problematic. As elsewhere in the Bill, it risks narrowing the recognition of disability-related need by excluding the complex way impairments interact with each other, with health conditions, and with a person’s environment over time.

There is also serious concern about the added requirement that a reassessment be linked to an “unanticipated”, significant and ongoing alteration in living arrangements, education arrangements, work arrangements or informal support networks. The term “unanticipated” may have far-reaching consequences and does not reflect the reality that many major transitions in a participant’s life are foreseeable but still impossible to plan for with precision years in advance. For example, if a participant has a five-year plan in place during secondary school, there may be little need for certain supports in Year 9, but very different support needs may emerge by Year 12 or at school exit. Those later needs may be foreseeable in the broadest sense, but they are not necessarily capable of being accurately costed, specified or funded years earlier. A rigid “unanticipated” test risks locking participants into plans that are no longer fit for purpose simply because a later life transition was predictable in theory.

A practical example highlights the problem with this approach.

Consider a participant with relapsing-remitting multiple sclerosis who enters a period of relapse and experiences a significant temporary reduction in functional capacity. In that period, the participant may require an immediate increase in formal supports to remain safe at home, maintain personal care, manage fatigue, and continue participating in daily life. However, because the change may not be permanent, and because relapse is a recognised feature of the condition, the participant could face difficulty meeting a test that depends on an “unanticipated” change or one that “directly relates” to a change in an existing impairment. This example illustrates why the proposed threshold is clinically unrealistic. Participants with fluctuating or episodic conditions can experience urgent and substantial increases in support need even where those changes are inherent to the nature of their disability.

Effective and Beneficial

Rehab Health and Fitness Australia is concerned about any narrowing of the concepts of “effective” and “beneficial” in the reasonable and necessary support framework. These terms are important because many disability supports do not produce immediate, dramatic or easily measurable outcomes, but they are still clinically justified and highly valuable. A support may be effective because it maintains functioning, prevents deterioration, reduces risk, builds tolerance, supports behavioural regulation, strengthens participation, or avoids the need for more restrictive and costly interventions. A support may be beneficial because it improves safety, confidence, consistency, routine, connection, communication or quality of life, even where change is gradual or non-linear.

This matters particularly for allied health, therapy and capacity-building supports. In practice, the benefit of these supports is often cumulative, preventative and closely linked to the participant’s environment, relationships and support network. If the legislation or its administration adopts an overly narrow view of what counts as effective or beneficial, participants may lose access to supports that are stabilising their condition, preventing escalation, maintaining community participation or reducing future demand on crisis, hospital, justice and child protection systems. The absence of rapid improvement should not be treated as evidence that a support lacks value.

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Submission 348

Rehab Health & Fitness Australia

reception@rhfaus.com.au | rhfaus.com.au

We are also concerned by any shift that removes or downgrades the participant’s own past experience of supports from the top of the evidence list. A participant-centred scheme should begin with the participant’s lived experience of what has or has not worked in their life, in their body, in their home and in their community. Past experience is not inferior evidence simply because it is personal. In many cases, it is the most direct and practical evidence available about whether a support is effective, beneficial, sustainable and safe for that individual. To reduce its weight in decision-making is a clear movement away from the participant-centred scheme the NDIS was intended to be.

Disability supports do not operate in the abstract. Two participants with the same diagnosis may respond very differently to the same support depending on communication style, trauma history, sensory needs, environment, culture, relationships and existing supports. A framework that privileges generic research or external opinion over the participant’s own demonstrated experience risks producing decisions that are technically neat but practically wrong. It may also discourage genuine co design by treating participant knowledge as secondary to administrative or clinical hierarchy. If the Bill shifts the evidence framework in that direction, it risks recasting participants as objects of assessment rather than people with expertise in their own lives.

It is also important to recognise that a lack of peer-reviewed published research does not mean a support is not beneficial. In disability practice, many supports are tailored, emerging, highly individualised or difficult to study through traditional research methods. Some approaches may not yet have a large published evidence base, particularly for participants with complex presentations, overlapping impairments or small population cohorts. That absence of peer-reviewed literature should not be treated as proof of ineffectiveness. Decision-makers must be able to consider clinical judgment, participant outcomes, lived experience, practice-based evidence and the realities of disability support delivery, rather than applying an overly narrow evidence threshold that excludes beneficial supports simply because formal research has not kept pace with practice.

For example, a participant with psychosocial disability or autism may receive regular therapy or capacity-building supports that do not eliminate impairment, but do improve emotional regulation, reduce incidents of crisis, support daily routines, maintain tenancy, strengthen communication and preserve participation in education, work or family life. Those outcomes are both effective and beneficial, even if they are not captured by a simplistic test of immediate functional gain. A framework that privileges only short-term, easily quantifiable outcomes risks excluding the very supports that keep people safe, connected and sustainable over time.

What we need:

• Retain broad and clinically realistic meanings of “effective” and “beneficial” that include maintenance, prevention, safety, participation and long-term outcomes.

• Ensure decision-makers do not interpret a lack of rapid improvement as evidence that a support is not effective or beneficial.

• Recognise the value of allied health, therapy and capacity-building supports where they reduce risk, prevent deterioration, sustain functioning or avoid more restrictive and costly responses.

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Submission 348

Rehab Health & Fitness Australia

reception@rhfaus.com.au | rhfaus.com.au

• Ensure the participant’s own past experience of supports remains central to the evidence framework and is not displaced by a hierarchy that gives insufficient weight to lived experience, prior outcomes and participant knowledge.

• Confirm that the absence of peer-reviewed published research does not, of itself, mean a support is not effective or beneficial, particularly where there is clinical justification, participant evidence and practice-based experience supporting its use.

Removal of rollovers and capital supports not carrying forward into the next plan Rehab Health and Fitness Australia is concerned about the removal of rollovers and any approach that prevents capital supports from carrying forward into a participant’s next plan. This change does not reflect how many disability-related purchases occur in practice. Capital supports such as assistive technology, equipment, vehicle modifications and home modifications are often planned over long periods, require quotes, trials, specialist reports, builder availability, approvals, ordering timeframes and participant readiness. Delays in procurement or installation are common and are not evidence that the support is unnecessary. If unspent capital funding expires at the end of a plan rather than moving forward, participants may lose access to essential items simply because the system or market has not moved quickly enough.

This issue is especially significant for capital supports because they are often lumpy, high-cost and dependent on sequencing. A wheelchair, communication device, bathroom modification or vehicle modification may be approved in one plan period but not delivered, fitted or completed until the next. Preventing those funds from carrying forward creates an arbitrary cliff edge that is disconnected from participant need. It may force participants to restart assessments, reports, quotes and approvals, creating duplication, delay and administrative burden for families, providers and the NDIA. In some cases, it may also leave a participant without the equipment or modification they need to remain safe, mobile, independent or able to leave the house.

Removing rollovers more broadly also risks penalising participants for cautious budgeting, provider shortages, hospital admissions, illness, changes in circumstances, or delays outside their control. Unspent funding at the end of a plan does not necessarily indicate oversupply. In many cases, it reflects the reality of thin markets, workforce shortages, long waitlists, delayed reviews or interrupted delivery. A participant-centred scheme should not treat the non-use of funds within an arbitrary timeframe as proof that supports are no longer needed. Nor should it create incentives for rushed or poorly timed spending simply to avoid losing budget that remains connected to an ongoing support need.

These concerns are heightened if the loss of rollover or the refusal to carry forward capital supports is not treated as a reviewable decision. If a participant loses access to funding that remains connected to an accepted need, but has no clear pathway to seek internal review or external merits review, the practical effect is to remove a support without ordinary accountability protections. That undermines procedural fairness and creates a significant power imbalance between participants and the Agency. Decisions about whether approved capital funding survives into a new plan can have serious consequences for safety, mobility, communication, housing and independence. Those consequences are too significant to sit outside the usual review framework.

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Submission 348

Rehab Health & Fitness Australia

reception@rhfaus.com.au | rhfaus.com.au

What we need:

• Retain a mechanism for reasonable rollover of unspent funds where participant need continues and the funding has not been used for reasons outside the participant’s control.

• Ensure capital supports can carry forward into the next plan where procurement, approvals, ordering, fitting or installation remain underway.

• Avoid settings that require participants to repeat assessments, quotes and applications for supports that have already been accepted as necessary but were delayed by system or market factors.

• Treat any refusal to allow rollover of unspent funds, or to carry forward approved capital supports into a new plan, as a reviewable decision with access to internal review and external merits review.

Plan Suspensions

There is a further concern with any proposal that allows adverse consequences to follow where contact is not made within 90 days. In practice, many participants will have entirely legitimate reasons for a period of non-contact. A person may be on holiday, admitted to hospital, recovering from a health crisis, managing bereavement or family violence, or navigating another significant life event.

At precisely those times, formal and informal supports may also have changed, broken down or become less reliable. A rigid 90-day contact rule risks treating vulnerability, disruption or temporary disengagement as a compliance issue rather than recognising it as part of the participant’s circumstances. If this results in suspension, delay, loss of plan continuity or reduced access to reassessment, the consequences could be severe and entirely disproportionate.

What we need:

• Retain a timely and enforceable service guarantee for unscheduled plan reassessments, including a shorter response timeframe and an effective consequence where the NDIA fails to respond.

• Ensure the grounds for requesting reassessment are clear, clinically realistic and broad enough to capture changes in support need arising from multiple impairments, chronic health conditions and secondary complications.

• Remove or revise the word “directly” where it narrows the connection between changing impairment and changing support need.

• Amend the “unanticipated” requirement so that foreseeable but not yet fully defined life transitions do not exclude participants from accessing reassessment when circumstances materially change.

• Ensure any 90-day contact requirement includes clear safeguards and discretion for circumstances such as hospital admission, holidays, significant life events, and disruption to formal or informal supports, so participants are not penalised for temporary periods of non-contact.

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Submission 348

Rehab Health & Fitness Australia

reception@rhfaus.com.au | rhfaus.com.au

Subsection 34(1) – What it is reasonable to expect families, carers and informal networks to provide Rehab Health and Fitness Australia is concerned about any framework that asks the Chief Executive Officer to determine what it is reasonable to expect families, carers and informal networks to provide without sufficient regard to context. Family and informal support is not a fixed resource. It is shaped by safety, geography, transport, work commitments, family composition, housing, cultural factors, health, and the built environment. Even ordinary parenting decisions involve a matrix of risks, capacities and environmental supports. A legislative framework that treats family contribution as simple, uniform or readily comparable risks producing decisions that are disconnected from how care and supervision are actually managed in daily life.

This is particularly important for children and young people with disability. The question is not simply whether a parent can do something, but what additional supervision, coordination, transport, risk management or adjustment is required because of the child’s disability and the environment in which the task occurs. Assistive technology and supportive environments can increase independence, but that does not mean parental responsibility can be assessed in the abstract. The same task may be reasonable in one setting and entirely unreasonable in another. As a result, any assessment of parental responsibility must be highly individualised and must recognise the interaction between impairment, environment, technology and family circumstance.

A practical example demonstrates the difficulty of applying a broad parental responsibility test.

For example, an 11-year-old child may be able to walk from school to a nearby office independently where the route is short, every road crossing is controlled by traffic lights, the first section of the trip is surrounded by school staff, parents and the pick-up zone, and the child uses an Apple Watch or similar assistive technology for communication and monitoring. In that context, the task may be manageable because the environment is supportive and the risks are mitigated. However, if that same child had a disability affecting safety awareness, mobility, communication or self-regulation, a parent may need to leave work and collect the child in person. In another family, the environment may be entirely different again, with greater traffic exposure, less safe infrastructure, longer travel distance, limited transport options, or no nearby workplace or support network. This example shows why parental responsibility cannot be assessed through a simplified legislative assumption about what families should provide. What is reasonable depends on the interaction between the child, the disability, the available assistive technology, the surrounding environment and the real-world capacity of the family.

What we need:

• Ensure subsection 34(1) is applied in a way that recognises the variability of family, carer and informal support across different environments and circumstances.

• Require decision-makers to consider the interaction between disability, environmental risk, assistive technology and family capacity when determining what is reasonable to expect from parents and carers.

• Avoid assumptions that ordinary parenting responsibilities can be directly equated with disability-related supervision, transport, coordination or risk management.

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Submission 348

Rehab Health & Fitness Australia

reception@rhfaus.com.au | rhfaus.com.au

Summary of recommendations Rehab Health and Fitness Australia supports reform that strengthens the integrity and long-term sustainability of the NDIS. However, this Bill in its current form raises serious concerns about participant rights, transparency, independence and the clinical realism of core eligibility and support concepts. Reform should protect the Scheme without reducing it to a system that is narrower, less accountable and less responsive to the realities of living with disability.

• Amend the Bill to reduce broad ministerial discretion and increase transparency and parliamentary oversight.

• Retain independent pricing authority and protect pricing processes from political or short-term fiscal pressure.

• Revise the definition and assessment of functional capacity so it reflects real-world functioning and contemporary disability practice.

• Remove the word “directly” from support eligibility provisions to avoid excluding necessary and effective supports.

• Ensure all assessment and eligibility settings recognise the importance of environment, assistive technology and human assistance in enabling participation and independence.

• Retain a timely, enforceable and clinically realistic pathway for unscheduled plan reassessments, including review triggers that reflect real-life changes in support needs.

• Apply subsection 34(1) in a way that recognises family capacity, environmental risk and assistive technology, rather than relying on simplified assumptions about what parents, carers and informal networks should provide.

We thank the Committee for the opportunity to contribute to this inquiry and would welcome further engagement on the practical and participant-level consequences of the proposed reforms.

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