Acknowledgement of Traditional Custodians | External submission

Submission 353

Page | 1  Acknowledgement of Country

The National Mental Health Consumer Alliance acknowledges the Traditional Custodians of

the lands and waters across Australia where we live, work, and advocate.

We pay our deepest respects to Aboriginal and Torres Strait Islander peoples, and to their Elders past and present. We acknowledge that First Nations lived experience is inseparable from the impacts of colonisation, dispossession, racism, and structural inequity. These ongoing injustices must be named, understood, and addressed.

The National Mental Health Consumer Alliance works in solidarity with the Indigenous Australian Lived Experience Centre, recognising the critical leadership of First Nations peoples in truth-telling, healing, and social and emotional wellbeing.

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All references to ‘Consumer’ and ‘lived experience’ in this submission refer to mental health consumers with lived experience of mental health challenges and/or suicidality. We use the term “mental health consumers” as a catchall term due to its connection with our movement’s history, but we acknowledge that different people self-identify with different terms. We do not include family, carers, kin or the bereaved in our definition of lived experience as it appears in this submission.

About us

The Alliance is the national peak body representing mental health consumers. We work together to represent the voice of all mental health consumers on national issues. We are the people experiencing mental health issues/distress, at the table advocating with government and policy makers, and working with a robust network of grassroots communities.

More information is available on the Alliance’s website: nmhca.org.au.

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Acknowledgement of Country ……………………………………………………………………………… 1 Executive Summary …………………………………………………………………………………………. 4 Recommendations …………………………………………………………………………………………….. 6 Submission ……………………………………………………………………………………………………….. 9 Shifting the NDIS from a rights-based scheme toward a cost-containment model .. 9 Use of all appropriate treatment reducing sovereignty over choice. ………………….. 10 No adequate alternatives exist ……………………………………………………………………….. 13 Social, Civic and Community Participation ……………………………………………………… 14 Definition of Functional Capacity ……………………………………………………………………. 17 Standardised Assessment Tool ………………………………………………………………………………………………………………………….. 17 Technical Advisory Group …………………………………………………………………………………………………………………………………… 18 Automated Decision Making …………………………………………………………………………… 19 Plan Renewals and Reassessment ………………………………………………………………….. 21 90 day contactable change …………………………………………………………………………….. 22 Administrative Burden ……………………………………………………………………………………. 23 Expanded use of delegated legislation and Ministerial instruments ………………….. 23 Reviewable Decisions ………………………………………………………………………………………………………………………………………… 24 Increased reliance on unpaid care, informal supports and community supports .. 25 Acknowledgements ……………………………………………………………………………………….. 26 Recognition of Lived Experience ……………………………………………………………………… 26 Endnotes ………………………………………………………………………………………………………… 27

Submission 353

Executive Summary

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The National Mental Health Consumer Alliance (the Alliance) welcomes the opportunity to provide a submission to the Community Affairs Legislation Committee Inquiry into the National

Disability Insurance Scheme (NDIS) Amendment (Securing the NDIS for Future Generations) Bill

2026 (the draft Bill). As the national peak body for people with lived experience of mental health challenges, including people with lived experience of psychosocial disability, this submission reflects the perspectives of those who rely on the NDIS as a foundation for recovery, stability, and participation in community life.

While the stated intent of the draft Bill is to ensure the long-term sustainability of the NDIS, the Alliance is concerned that the proposed reforms represent a fundamental shift away from a rights-based model grounded in individual need toward a system increasingly driven by cost containment, standardisation, and administrative control. These changes carry significant and disproportionate risks for people with psychosocial disability, particularly given the absence of meaningful consultation and co-design with those most affected.

Key provisions within the draft Bill risk introducing coercive and inequitable access pathways, including requirements to undertake all “appropriate treatment” prior to eligibility, despite significant variation in access, cost, and suitability of treatments. The Bill also introduces a narrow definition of functional capacity, supported by standardised assessment tools that are unlikely to capture the episodic and complex nature of psychosocial disability. These tools risk excluding lived experience evidence and may not be meaningfully reviewable, raising serious concerns about fairness and transparency.

The reforms further assume the availability of alternative or “foundational” supports outside the NDIS, which are, currently underfunded, inaccessible, or not yet established. Restricting access to the NDIS without ensuring equivalent supports will not reduce need, but instead shift demand onto crisis services, hospitals, homelessness systems, and unpaid carers, exacerbating pressures across the broader system.

Proposed reductions to social, civic, and community participation supports are particularly concerning. These supports are essential to recovery, enabling individuals to maintain stability, build connections, and engage in everyday life. Reducing access risks increasing isolation, deterioration, and long-term system costs.

The expansion of automated decision-making, combined with reduced access to review and increased use of delegated legislative powers, threatens transparency, accountability, and procedural fairness. Decisions about eligibility, planning, and supports may become less responsive to individual circumstances. At the same time, changes to planning processes, including automatic plan renewals and stricter reassessment thresholds, fail to reflect the fluctuating nature of psychosocial disability and risk leaving people without appropriate supports

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at critical times.

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The draft Bill also increases reliance on informal and unpaid care, shifting responsibility onto families, carers, and communities, often without adequate recognition of capacity or impact. This is likely to disproportionately affect women and those already experiencing disadvantage.

Taken together, these reforms risk eroding participant choice and control, increasing inequity, and undermining Australia’s commitments under the United Nations Convention on the Rights of Persons with Disabilities. They also risk shifting costs rather than reducing them, with significant human, social, and economic consequences.

In this submission, the Alliance makes 19 detailed recommendations. In summary they are: defer the Bill pending genuine co-design with people with lived experience of psychosocial disability. If the Bill proceeds, then:

 establish minimum statutory safeguards;  maintain the rights-based framework of the NDIS;  remove the “all appropriate treatment” requirements;  protect choice, control and recovery-oriented supports;  guarantee continuity of supports before access is restricted;  protect social, civic and community participation supports;  amend the functional capacity definition to recognise its contextual and fluctuating nature;

  implement  relational assessment  processes  with  lived  experience  governance

embedded;  ensure transparency, procedural fairness and full reviewability of decisions;  strictly limit automated decision-making;  address equity impacts;  ensure planning processes reflect the episodic nature of psychosocial disability;  safeguard participants who are unhoused, hospitalised, incarcerated or experiencing family violence;  reduce administrative burden and prevent Robodebt-style harm;  limit Ministerial and delegated powers and preserve parliamentary scrutiny; and  ensure informal and unpaid care is not used as a substitute for formal supports.

We would welcome the opportunity to appear before members of the Community Affairs Legislation Committee as part of this Inquiry to further explain and expand on the concerns we have outlined in this submission.

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Recommendations                                                                                  Page | 6

The National Mental Health Consumer Alliance makes the following recommendations to the Committee:

Recommendation 1: Defer the Bill for proper consultation

The Committee  should recommend  that  consideration  of  the  Bill be  deferred  until

comprehensive consultation and co-design has been undertaken with people with lived experience of psychosocial disability, consistent with best-practice consumer engagement frameworks.

Recommendation 2: Maintain the rights-based framework of the NDIS The Committee should recommend that the Bill be amended to ensure the NDIS remains a rights based scheme, with funding determined by participants’ actual support needs rather than fiscal or cost-containment objectives. The principles of person-led, strengths-based, recovery oriented, trauma-informed and culturally safe support, and the prioritisation of supported decision-making, should be retained and strengthened in primary legislation.

Recommendation 3: Establish minimum safeguards if the Bill proceeds If the Bill proceeds, the Committee should recommend the inclusion of minimum statutory safeguards, including:  guaranteed continuity of supports;  limits on discretionary and automated decision-making; and  explicit protections for people with psychosocial disability.

Recommendation 4: Remove “all appropriate treatment” requirements The Committee should recommend that provisions requiring participants to undertake “appropriate treatment” as a condition of eligibility be removed from the Bill. If these provisions are retained, the Committee should recommend, at a minimum, that they:

 do not apply to people with psychosocial disability; and  if applied to any group, are subject to a definition of “appropriate treatment” developed in consultation with people with lived experience of the relevant disability, with explicit safeguards against coercion, prohibitive cost, geographic inaccessibility, and treatments with serious or invasive side effects.

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Recommendation 5 – Protect choice, control, and recovery-oriented supports The Committee should recommend amendments to ensure that participants retain choice and

control, including continued access to:                                               Page | 7

 non-clinical supports;  peer-led supports; and  community-based recovery supports.

Recommendation 6: Guarantee continuity of supports and ensure alternatives exist before access is restricted The Committee should recommend that the Bill include a clear provision that no participant will lose access to NDIS supports, and that access to the NDIS is not restricted on the basis of alternative supports, unless and until those alternative supports are:

properly funded, including Foundational Supports — Psychosocial Supports;
demonstrably capable of meeting participant needs;
accessible and appropriate; and
available in practice, including in regional, rural and remote areas. Recommendation 7: Protect social, civic and community participation supports The Committee should recommend that the Bill be amended to prevent reductions to funding for social, civic and community participation supports. The Committee should further recommend that these supports be formally recognised in the legislation as essential and preventative, rather than discretionary.

Recommendation 8: Strengthen safeguards and review rights The Committee should recommend that all decisions affecting participants remain reviewable, including access to independent merits review. The Committee should also recommend measures to strengthen:  transparency;  procedural fairness; and  accountability across decision-making processes.

Recommendation 9: Amend the definition of functional capacity The Committee should recommend that the definition of functional capacity be amended to include the impact of environmental, social and personal circumstances, recognising the contextual and fluctuating nature of psychosocial disability.

Recommendation 10: Implement relational assessment processes The Committee should recommend that the NDIS move away from reliance on purely clinical evidence and standardised assessment tools, and instead implement a relational assessment process, particularly for people with psychosocial disability, that supports participation and considers the individual as a whole person.

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Recommendation 11: Ensure transparency and full reviewability

The Committee should recommend that both the outcomes and the methodology of functional   Page | 8

capacity assessments, including the criteria and tools used, are transparent and subject to independent merits review.

Recommendation 12: Remove or strictly limit automated decision-making The Committee should recommend that provisions enabling automated decision-making (ADM) be removed from the Bill and considered separately. At a minimum, any use of ADM must include:

meaningful human oversight;
transparency of decision-making processes; and
clear lines of accountability. Recommendation 13: Ensure equity and prevent disproportionate impacts The Committee should recommend that the Bill include safeguards to ensure reforms do not disproportionately impact:  people with psychosocial disability;  people in regional, rural, and remote areas;  Aboriginal and Torres Strait Islander peoples;  Culturally and Racially Marginalised people; and  people experiencing financial disadvantage.

Recommendation 14: Embed lived experience in governance The Committee should recommend that people with lived experience of psychosocial disability be formally represented in Technical Advisory Groups and all NDIS reform and implementation processes.

Recommendation 15: Ensure flexible and reviewable planning processes The Committee should recommend amendments to remove automatic plan renewals without participant input, and to revise restrictive reassessment thresholds. Planning and reassessment processes must remain responsive and reviewable, must reflect the episodic and fluctuating nature of psychosocial disability, and must ensure participants can access timely adjustments to supports when their needs change.

Recommendation 16: Amend “not contactable” provisions The Committee should recommend that the 90-day “not contactable” provisions be removed or substantially amended, with minimum safeguards for participants who are:  experiencing homelessness;  hospitalised or in institutional care;  incarcerated; or  experiencing domestic and family violence.

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Recommendation 17: Reduce administrative burden and prevent harm

The Committee should recommend amendments to administrative requirements that:                                                                                  Page | 9

 remove punitive debt provisions linked to record-keeping; and  introduce explicit exemptions for participants who are unable to comply due to circumstances such as homelessness, hospitalisation or incarceration.

Recommendation 18: Limit Ministerial and delegated powers; preserve parliamentary scrutiny The Committee should recommend amendments to restrict the scope of Ministerial and delegated legislative powers, particularly in relation to:

eligibility criteria;
functional capacity;
funding levels; and
support categories. The Committee should further recommend that:
matters central to eligibility, functional capacity, support categories, funding levels and planning processes remain in primary legislation or be subject to strengthened

parliamentary scrutiny; and

key funding and pricing decisions be referred to an independent authority, consistent with Recommendation 11 of the NDIS Review.

Recommendation 19 – Limit reliance on informal and unpaid care The Committee should recommend that the Bill be amended to ensure that reliance on informal, community and unpaid care does not substitute for the provision of formal supports. Planning decisions must be based on participants’ actual support needs and must not assume that families, carers or communities can absorb additional responsibilities. The disproportionate burden placed on carers, particularly women, should be explicitly recognised in the legislation.

Submission

Shifting the NDIS from a rights-based scheme toward a cost containment model The draft Bill (Schedule 1, Part 4 (Support determinations); Part 6 (Reasonable and necessary supports) changes the foundation of the NDIS from the rights-based scheme it was established as to being founded on a cost-containment model – attempting to mask human rights violations behind economic efficiency. This moves the NDIS from a relational model to a transactional one.

NDIS supports should be person led, strengths-based, recovery-oriented, trauma-informed, culturally safe and focus on capacity building. They should be inclusive and culturally safe, and

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balance dignity of risk with duty of care. Supported decision making should be prioritised. Unfortunately, this draft Bill removes all these human rights fundamentals.

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Financial sustainability will be embedded directly into access, planning, and support decisions. The application of ‘reasonable and necessary’ supports, the key stone to the foundation of the NDIS, must now be linked to consideration of what is reasonable for the NDIS to fund.

Section 17B of the Bill includes “principles relating to scheme sustainability” and includes the efficient use of funding and equitable distribution across participants on the scheme. This is likely to result in participants not having funding that enables them to meet their needs. The idea that the NDIS costs money and provides nothing back to the community undervalues the lives and contributions people with psychosocial disability make to their communities.

This change will also mean that costs will just be moved around the system, and we will see less return on NDIS investment. We need to consider ripple effects and strain on intersecting systems.

Recommendation 1: Defer the Bill for proper consultation

The Committee  should recommend  that  consideration  of  the  Bill be  deferred  until

comprehensive consultation and co-design has been undertaken with people with lived experience of psychosocial disability, consistent with best-practice consumer engagement frameworks.

Use of all appropriate treatment reducing sovereignty over choice The draft Bill (Schedule 1, Part 8) introduces stricter permanence requirements by requiring NDIS participants and prospective participants to have undertaken all “appropriate treatment” before

Submission 353

an impairment can be considered permanent. This approach places significant pressure on mental health consumers to undergo potentially invasive or high-risk treatments to demonstrate eligibility. It risks compelling individuals to pursue treatments with serious or long-term side

effects, such as electroconvulsive therapy or antipsychotic medication, not because they are  Page | 11

clinically appropriate or chosen, but because they become a prerequisite for accessing disability support.

This may see people with psychosocial disability forced to submit to chemical restraint in the community, which is regressive policy. While the mental health system is trying to eliminate seclusion and restraint under the National Mental Health and Suicide Prevention Agreement, the proposed legislation may have the unintended consequence of increasing it.

The Explanatory Memorandum states that if any treatment is likely to materially improve, reverse, or alleviate the impact of the impairment, it must be pursued prior to eligibility for the Scheme. In practice, this establishes a “treatment exhaustion” model.

The concept of “appropriate treatment” is not clearly defined in either the draft Bill or the Explanatory Memorandum, beyond a broad reference to treatments that are known, evidence based, and available in Australia. This lack of clarity creates substantial uncertainty and opens the door to inconsistent and potentially coercive interpretations. It also reflects a narrow, medicalised understanding of disability, and particularly psychosocial disability, that prioritises clinical intervention over social and community-based supports. This presents as a step backwards – while the health system is seeking to move to a human rights-based model of mental health support, the notion of “appropriate treatment” seeks to return to the clinical model.

This also fails to account for the often significant side effects of medications and other treatments around mental health that many consumers experience. Some treatments are particularly invasive and come with significant side effects that mean that consumers may not want to access them. One participant shared concerns around being told to try electro convulsive treatment (ECT), which would exacerbate their challenges around memory, a known side effect. People with psychosocial disability have the right to make choices about treatments and how they will impact their wellbeing. This draft Bill risks adding coercive pressure on consumers to engage in treatments they do not want to access.

For people with psychosocial disability, this represents a significant shift towards accepting medicalisation and compliance with system-defined treatment pathways. It undermines long standing efforts to recognise recovery-oriented approaches, including the role of peer support, community connection, and non-clinical interventions. In effect, it risks forcing individuals to choose clinical treatment over community-based supports, even where those supports are more appropriate and effective for their recovery.

Submission 353

The proposed changes in the draft Bill risks introducing a regressive and discriminatory framework, in which access to the NDIS is determined not only by disability-related need, but by

a person’s capacity to navigate and afford the treatment system. The provisions are particularly  Page | 12

concerning in that they explicitly disregard a person’s ability to access treatment. Even where treatment is unaffordable, geographically unavailable, or otherwise inaccessible, it may still be deemed “appropriate” for the purposes of determining eligibility. This creates a deeply inequitable outcome, where individuals with greater financial means or proximity to services are more likely to meet eligibility requirements, while others are excluded despite having equivalent or greater need.

The draft Bill does not limit available treatments to only include treatments that are fully subsidized by either the Medicare Benefits Schedule or Pharmaceutical Benefits Schedule. This is particularly concerning for people with lived experience of psychosocial disability as many mental health treatment options are prohibitively expensive and may not be covered or fully covered by Medicare subsidies.

In WA, Qld, NT and SA, consumers in regional, rural and remote locations are often required to travel significant distances to regional hubs or, in most cases, capital cities, to access certain treatments. There is very little available to help with the costs of such travel and people will be forced to leave their homes and supports for periods of time. By not considering this travel burden, the draft Bill is discriminatory towards people living in regional, rural and remote locations.

The use of the word ‘alleviation’ is also problematic in a context in which people may experience some alleviation of some aspects of their psychosocial disability but the side effects they

experience outweigh the  alleviating  effect  of the treatment. This becomes  particularly

complicated for those who have co-occurring mental health challenges and/or disabilities, where treatment may come with the promise of alleviating one ‘impairment’, but might make another worse. NDIS participants have highlighted to us that their mental health challenges should not be viewed in isolation, and that their treatment choices should not be seen in isolation either.

For this reason, this requirement is likely to add significant costs to the NDIS as it will need to determine what appropriate medical treatment should be for each individual person. People are not homogenous and as the NDIS is moving away from diagnosis and looking at functional impairment, the treatment options will be different depending on individual circumstances.

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Recommendation 4: Remove “all appropriate treatment” requirements The Committee should recommend that provisions requiring participants to undertake “appropriate

treatment” as a condition of eligibility be removed from the Bill. If these provisions are retained, the  Page | 13

Committee should recommend, at a minimum, that they:

Recommendation 5: Protect choice, control, and recovery-oriented supports The Committee should recommend amendments to ensure that participants retain choice and control, including continued access to:  non-clinical supports;  peer-led supports; and  community-based recovery supports.

No adequate alternatives exist The draft Bill (Schedule 1, Part 8 (Tightening meaning of permanence); Part 9 (Eligibility based on access to other services)) increases the likelihood that some people with lived experience of psychosocial disability will lose access to the NDIS, or receive reduced NDIS supports, without equivalent supports or services being available.

Restricting access to the NDIS does not remove support needs; it redistributes them elsewhere and is likely to increase pressure on hospitals; mental health crisis services; homelessness services; increased reliance on informal supports and unpaid care by carers, kin and families; greater restrictions on funded supports, including funding caps and reductions; and underfunded community services.

The Bill relies heavily on people with psychosocial disability being able to access appropriate supports through  yet to be designed, or funded, foundational supports, including psychosocial supports,  mainstream systems including health, education and housing, many of which are already underfunded and/or difficult to access and may not be safe for people living with psychosocial disability, and  compensation schemes for work injury (this will adversely affect first responders and

defense  workers)  or  motor  vehicle  accidents,  often  leaving  people  with no

supports/services through years of court cases over causation.

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The Bill risks shifting people with psychosocial disability back into fragmented systems where

access to the reasonable and necessary supports that they need depends on geography, crisis  Page | 14

thresholds, informal care, and overstretched mainstream services. People may be excluded from the NDIS if other support systems are theoretically available, even if those systems are inadequate in practice.

We know that 500,000 people living with psychosocial disability are not receiving the care and support they need to live their livesi. By limiting the supports available through the NDIS, this number will increase – more than half a million people without the support required to live.

properly funded, including Foundational Supports — Psychosocial Supports;
demonstrably capable of meeting participant needs;
accessible and appropriate; and
available in practice, including in regional, rural and remote areas.

The draft Bill (Section 34A) gives the Minister the power, via legislative instrument, to reduce funding across groups of supports. Minister Butler has already stated that the intent of the Bill is to reset the total cost of social, civic and community participation and halt further growthii. We therefore expect this power will be used to reduce funding for social, civic and community participation supports.

“I want to be honest with people; this will have a material impact on participant plans. In terms of the average actual spend by participants this will take people back to where they were in 2023.” — The Hon Mark Butler, Minister for Disability and NDISiii

Social,  civic and community  participation  supports  are  foundational  for people  with

psychosocial disability. They enable participation in everyday life, support recovery, prevent deterioration, and reduce long-term costs to the system. Reducing these supports risks significant harm for individuals and increased pressure on other service systems.

People with lived experience of psychosocial disability represent the second highest proportion of participants receiving social, civic and community participation (SCCP) funding in the NDIS. As acknowledged in the Explanatory Memorandum, they face significant barriers to community access and are likely to be disproportionately impacted by any reductions.

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The high number of participants with lived experience of psychosocial disability receiving SCCP funding is because SCCP supports are a core component of effective mental health recovery for

people with psychosocial disability. These supports enable individuals to engage in everyday life,  Page | 15

maintain relationships, and participate in their communities in ways that are fundamental to wellbeing, dignity, and inclusion. The support is usually provided by peer workers with lived experience of psychosocial disability/mental health challenges. We know that people with psychosocial disability prefer accessing supports through peer workers as they understand the barriers and difficulties mental health consumers face.

Cuts to social and community participation will lead to isolation and leave participants with lived

experience  of psychosocial  disability without support  for community engagement and

participation. This is especially concerning given the lack of alternative or foundational psychosocial supports outside the NDIS, and the fact that some participants have little or no informal supports available. Informal supports cannot be relied on to compensate for systemic gaps in the Scheme.

Participants consistently report that NDIS supports are critical to managing daily life and getting people with psychosocial disability through the week helping with the stress of daily living. In the words of one participant:

“It means a real loss of an important safety net and feels exceptionally precarious.” — Anonymous participant, Western Australia

One participant noted that this means that they will go from having an opportunity to go out of the house and into the community every week to maybe once a fortnight, or even more infrequently. They anticipate feeling extremely isolated.

While the percentage of SCCP reduction is unknown at this stage, we know that it will potentially mean that as many as halfiv of the 65,300 people with psychosocial disability currently on the NDIS could have up to 30% of their funding reduced by up to 100% as early as August 2026. We know that 30% of funding paid to people with psychosocial disability on the NDIS is allocated for social, civic and community participation.

For many people with psychosocial disability, functional capacity is closely linked to social, civic and community support. The ability to leave the house, attend appointments, maintain friendships, or participate in work or education is not simply a matter of individual will or clinical treatment; it often depends on the availability of practical and relational supports. Social support provides the scaffolding that enables individuals to translate clinical stability into meaningful participation in daily life.

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These supports play a critical preventive role. Regular engagement in social, civic, and community activities reduces isolation, which is a well-established risk factor for mental health

deterioration, crisis episodes, and suicidality. In this way, social supports are not supplementary  Page | 16

or optional; they are essential to maintaining stability and preventing relapse. Without them, individuals are more likely to experience worsening symptoms, increased reliance on acute services, and higher rates of hospitalisation.

These supports can also enable economic and societal participation. When people are supported to build routines, confidence, and social connections, they are more likely to engage in employment, education, and volunteering. Removing or reducing these supports creates barriers to participation and can entrench disadvantage, ultimately increasing long-term costs to individuals, communities, and government systems.

For people with psychosocial disability, needs are often fluctuating and episodic. On days when functioning is reduced, social supports can make the difference between maintaining engagement and becoming withdrawn or isolated. They provide flexibility and responsiveness that clinical services alone cannot offer. Without this support, small functional declines can escalate into crisis.

Importantly, SCCP supports reduce pressure on other parts of the health system. By supporting people to remain well and connected, their reliance on hospitals, crisis services, homelessness and other high-cost interventions is reduced. Restricting access to these supports does not remove need; it shifts it to systems that are less effective, more costly, and often less responsive.

Recommendation 7: Protect social, civic and community participation supports The Committee should recommend that the Bill be amended to prevent reductions to funding for social, civic and community participation supports. The Committee should further recommend that these supports be formally recognised in the legislation as essential and preventative, rather than discretionary.

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Definition of Functional Capacity

The draft Bill (Part 1, 9B) provides a specific definition of functional capacity as a person’s ability  Page | 17

to undertake a specific activity without assistance, excluding the impact of the person’s environmental and personal circumstances. Though not explicitly mentioned in the draft Bill, this change will allow the Government, with state and territory agreement, to make NDIS rules to decide who can access the NDIS AND who should remain on the NDISv.

This will be done through the introduction of criteria to assess people’s functional capacity AND tools to measure this functional capacity – effectively implementing a standardised assessment tool and will remove the need for medical reports. This tool will be used to determine whether people living with psychosocial disability meet the functional capacity threshold to access the NDIS.

It is important to recognise that people do not live their lives in a vacuum. A person’s environmental or personal circumstances may well have a large and ongoing impact on their capacity to undertake an activity and so should be considered. By drawing a distinct line between what is the NDIS domain and what is the domain of other services systems, as this Bill does, will result in further disconnected and fragmented systems of supports and services and encourage service providers to operate in silos. This goes against what we know works and what we know

people  living with psychosocial  disability consumers want  - supports that are  holistic,

connected, and respond to their needs as a whole.

Standardised Assessment Tool

We welcome the removal of the requirement for participants to provide clinical reports as part of the NDIS application process, which has historically been costly and has placed undue emphasis on clinical evidence over other forms of support. However, we are concerned that the proposed standardised assessment tool is unlikely to capture the complexity and nuances of living with a psychosocial disability.

Neither the current system nor the proposed model adequately meets the needs of people with psychosocial disability. The Alliance supports a shift toward a relational assessment process, which allows for supported participation and considers the individual as a whole person, including the social, environmental, and fluctuating nature of their experiences. While this approach may differ from models used for other disability groups, it is necessary to ensure appropriate and effective support for people with psychosocial disability.

Current participants have expressed concern about whether a standardised assessment tool will sufficiently recognise mental health challenges, and whether the process of assessing functional capacity will be accessible, appropriate, and responsive to their needs. There are also significant concerns about the potential for deficit-based assessment approaches. Requiring individuals to focus on their “worst days” may have a harmful impact on mental health and undermine recovery.

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Participants already report that deficit-based language in assessments can negatively shape how

they view themselves and their potential for recovery.                                                                                  Page | 18

Finally, participants with psychosocial disability are deeply concerned that these tools may be used to reassess eligibility and remove people from the NDIS. This is particularly troubling given that many have already experienced prolonged and challenging processes to gain access to the Scheme.

While we know the draft Bill recommends this standardised assessment tool, it is unclear whether the process will be an automated one, but it is highly likely. We know that standardised assessment tools are known to be less transparent, harder to challenge and make it unclear as to who is accountable for decisions made. Making it an automated decision tool will compound these issues.

In addition, there is no information available in the Bill that identifies what outputs can be expected from the functional capacity test. It is unlikely to be fully reviewable as the Bill is drafted, and there is a real risk it will not be meaningfully reviewable in practice. This is because the draft Bill moves key elements of functional capacity into rules and delegated instruments (set by the Minister), rather than keeping them in primary legislation. At the same time it reduces the scope of ‘reviewable decisions’ removing access to independent merits review through the Administrative Review Tribunal.

The underlying framework, criteria or tool that is used to assess functional capacity may not be reviewable. This means people with psychosocial disability will not be able to challenge the method OR the assumptions used to reach an outcome.

Technical Advisory Group

It is imperative that people with lived experience of psychosocial disability are included in the Technical Advisory Group proposed in the Explanatory Memorandum. Without lived experience embedded in the development of the functional capacity tool it will not be built to adequately identify the impact of psychosocial disability on a person’s life.

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Recommendation 11: Ensure transparency and full reviewability

The Committee should recommend that both the outcomes and the methodology of functional   Page | 19

capacity assessments, including the criteria and tools used, are transparent and subject to independent merits review.

Automated Decision Making

The proposed expansion of automated decision-making (ADM) within the NDIS in this draft Bill raises significant concerns regarding fairness, transparency, accountability, and the protection of participant rights, particularly for people with lived experience of psychosocial disability. While automation may offer administrative efficiency, its use in complex, evaluative decision-making risks undermining the integrity and person-centred nature of the Scheme.

There have been clear indications that participant reports may be used as the basis for

automatically  generated  plans.  This  raises  serious  concerns. Such approaches  lack

transparency in how reports are interpreted and translated into plans, and create a real risk that bias may be embedded within the tools used to generate these decisions. Any errors, omissions, or limitations within reports may be amplified through automation, with limited opportunity for these issues to be identified or corrected in time. The degree of human oversight is unclear, and without meaningful human involvement there is no assurance that plans will reflect individual needs, circumstances, and goals.

At its core, the NDIS is designed to respond to individual need. Decisions about eligibility, functional capacity, and reasonable and necessary supports require nuanced, contextual

judgement,  informed  by  a  person’s  lived  experience,  environment,  and  fluctuating

circumstances. Automated systems are inherently limited in their ability to capture this complexity. They rely on standardised inputs and predefined rules, resulting in assessments that are often rigid, overly simplified, and disconnected from the realities of people’s lives.

The use of ADM in functional capacity assessments is particularly concerning. These approaches risk excluding environmental context, the availability of other supports, and the relational factors that shape a person’s functioning. In doing so, they redefine functional capacity in a highly medicalised and decontextualised way. Algorithms are likely to rely on published, generalisable evidence, reinforcing a biomedical model of disability that does not reflect the lived experience of many participants. This creates a significant risk of systemic bias, particularly for people with psychosocial disability, and is likely to disproportionately impact Aboriginal and Torres Strait Islander peoples and Culturally and Racially Marginalised communities, whose experiences are often underrepresented in clinical datasets.

This presents a particular risk for people with lived experience of psychosocial disability, where functional capacity is often episodic and highly influenced by social, environmental, and relational factors. Automated systems are not equipped to interpret these dynamics, increasing the likelihood of inaccurate or incomplete assessments. As a result, participants may receive

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inadequate levels of support or be deemed ineligible based on data that does not properly reflect

their circumstances. The exclusion of input from clinicians and practitioners with deep  Page | 20

knowledge of an individual’s history further weakens the integrity of the assessment process.

The opacity of ADM processes compounds these concerns. Participants may be unable to understand how decisions have been reached, what factors have been considered, or what information may be missing. This undermines procedural fairness and significantly limits the ability of participants to challenge or appeal decisions. Without clear insight into decision making pathways, rights become difficult to exercise in practice.

There are also serious concerns regarding accountability. Where decisions are made or materially influenced by automated systems, it is often unclear who is responsible for the outcome. This diffusion of responsibility is particularly problematic in a system where decisions directly affect access to essential supports. Clear lines of accountability are critical to ensuring that errors can be identified and remedied, and that trust in the Scheme is maintained.

Participants have expressed deep concern about the prospect of automation in planning processes. Many have indicated that even partial automation is problematic, and that decisions about supports and budgets should remain human-led. There is a strong view that human oversight of automated decision making may not be sufficient, and that core decision-making functions should not be delegated to automated systems.

In this context, strong safeguards are essential. At a minimum, any use of ADM must ensure meaningful human involvement, full transparency in decision-making processes, and clear accountability mechanisms. Without these protections, the expansion of ADM risks entrenching inequity, reducing the quality and appropriateness of supports, and fundamentally undermining the rights-based intent of the NDIS.

meaningful human oversight;
transparency of decision-making processes; and
clear lines of accountability.

Submission 353

Recommendation 13: Ensure equity and prevent disproportionate impacts

The Committee should recommend that the Bill include safeguards to ensure reforms do not  Page | 21

disproportionately impact:  people with psychosocial disability;  people in regional, rural, and remote areas;  Aboriginal and Torres Strait Islander peoples;  Culturally and Racially Marginalised people; and  people experiencing financial disadvantage.

Plan Renewals and Reassessment

The draft Bill (Schedule 1, Parts 2 and 5) includes specific changes that will impact on how people

with  psychosocial  disability can  review  decisions and how  plans  will be  renewed.

Reassessments will become harder to access and slower to process.

Section 50A introduces automatic plan renewals that do not involve reviewable decisions. This change means a person with psychosocial disability will have no input into their plan renewal unless they specifically ask for them. Currently, a plan reassessment can be initiated by a participant at any time.

Reassessments will become harder with the imposition of stricter reassessment thresholds (Section 48A) that will require participants to demonstrate that the changes in their support needs are both significant and ongoing. There is no information available that identifies what measurement will be used to measure “significant” needs.

These two changes fail to reflect the reality of psychosocial disability, where needs fluctuate and may not meet rigid thresholds despite requiring immediate support. It risks delaying or preventing adjustments to plans, leaving individuals without appropriate supports at critical points in their recovery.

Submission 353

90 day contactable change

Page | 22   The draft  Bill includes suspension and revocation powers for participants deemed “not

contactable” within 90 days. These powers disproportionately impact people on the NDIS who are less likely to be at a long term address including people living with psychosocial disability experiencing homelessness, domestic violence, involuntary treatment, institutionalisation or incarceration. This inclusion in the draft Bill assumes people with psychosocial disability who have a mailing address are well enough or have support at their address to check mail or to organise redirection of their mail each time they seek acute mental health care or face coerced treatment or change address. It also assumes NDIS participants will have the financial means to forward mail with the current cost of redirecting mail in Australia sitting at $33 or $19.80 concession rate for one monthvi.

If a person living with psychosocial disability has their plan revoked because of the 90 day rule they will lose the support network formed prior to treatment/institutionalisation. This could delay their release from hospital or rehabilitation as they undergo the application process to become an NDIS participant and, if successful, supports are put in place. For people who had support but are not successful in reapplying, this may mean the person has no support and may not be able to leave the hospital/rehabilitation service until suitable supports are found.

Participants in the justice system would be heavily disadvantaged. They are often not able to take calls, check emails, etc. This means that when they reenter society they may find they have been stripped of their plans and supports, having to start from the beginning of the application process.

The draft Bill is silent on how this requirement will impact people who are unhoused. It is also silent on what the outcome would be if a person’s guardian does not respond within the 90 day period. For a person with psychosocial disability who has been placed under a public advocate this will be a real and justifiable concern. We have heard from participants on guardianship orders that guardians who receive communications about them often do not pass on the information or have significant delays in getting information. This is not a matter of choice with many people with psychosocial disability having a Public Guardian enforced on them.

Participants have also highlighted the often erratic nature of communication from the NDIA, and note that they often experience significant delays when they are trying to contact the Agency, with people not seeing/responding to emails, calls, etc. Like many of us, people with psychosocial disability have told us that they regularly do not answer calls from unknown numbers because they are avoiding spam/scam calls. Some noted that the NDIA ignores their stated preferences around mode of communication – for instance, trying to call them rather than email.

Submission 353

Recommendation 16: Amend “not contactable” provisions

The Committee should recommend that the 90-day “not contactable” provisions be removed or  Page | 23

substantially amended, with minimum safeguards for participants who are:  experiencing homelessness;  hospitalised or in institutional care;  incarcerated; or  experiencing domestic and family violence.

Administrative Burden

The added administrative burden on people with psychosocial disability introduced in this Bill comes at the same time as the Bill reduces or removes social, community and civic funding, the very supports people with psychosocial supports need to help them with administrative tasks.

The draft Bill (Section 5B) requires participants and/or their carer or guardian to retain records relating to the provision of services and/or claiming for NDIS support for a specified amount of time: 3 years for participants and 5 years for carers/guardians. There is no indication as to what this type of record will be.

The draft Bill goes on to state that if the records cannot be provided on demand then a debt notice will be sent to the participant or carer/guardian and the Bill does not allow for any exemptions or defenses (section 182(4))vii. Debt notices being issued to already vulnerable people is gravely concerning. Additionally, people who are unhoused will not have the ability to hold onto records and people who have their possessions packed up by public housing staff when in hospital or incarcerated for greater than the allowed time will also be impacted.

The Alliance has a major concern as to how the debt notices will be determined and issued and whether it will be done, like many inclusions in this Bill, through automated decision making reminiscent of Robodebt.

Recommendation 17: Reduce administrative burden and prevent harm The Committee should recommend amendments to administrative requirements that:  remove punitive debt provisions linked to record-keeping; and  introduce explicit exemptions for participants who are unable to comply due to circumstances such as homelessness, hospitalisation or incarceration.

Expanded use of delegated legislation and Ministerial instruments The draft Bill (Schedule 1, Parts 1, 4, 5, 6, 8 and 9) significantly expands the extent to which eligibility, assessment, funding, and planning arrangements may be determined through NDIS Rules and Ministerial instruments rather than primary legislation. These changes reduce parliamentary scrutiny and transparency, increase executive discretion, and create uncertainty about how the Scheme will operate in practice.

Submission 353

This includes powers relating to:  functional capacity – power to set the level of functional capacity required to qualify for

NDIS support.                                                             Page | 24

 permanence requirements – power to require current and prospective participants to show they have pursued all known alternative supports, as discussed above in the section on “all appropriate treatment”.  funding reductions – power to reduce funding for specific supports, potentially requiring co-payments that some participants cannot afford. This may leave people with psychosocial disability without enough support and increase reliance on family, friends, emergency departments, and acute care services.  support limits – broad power to change the amount of support a person can receive, as discussed above in the section on Social, Civic and Community Participation.  alternative or mainstream supports – power to reclassify supports currently funded through the NDIS as alternative supports and stop funding them, as discussed above in the section on the absence of adequate alternative supports.  automatic plan renewals – power to renew plans annually without a proper opportunity to discuss changing support needs, as discussed above in the section on plan renewals and reassessments.

These provisions raise significant constitutional and rule-of-law concerns. They concentrate power in the executive to reshape the operation of the NDIS after the passage of the Bill, with limited parliamentary oversight. Given the scale and significance of the Scheme, such powers are inappropriate where they relate to core entitlements and access to supportsviii.

Reviewable Decisions

The removal of reviewable decisions (Section 23) reduces oversight and increases top-down power and control to the detriment of participants. Currently, the Administrative Review Tribunal (ART) is a key pathway available to participants when they seek review of decisions that adversely affect their experience with the NDIS, as (drastically increasing) figures on number of cases lodged with the ART suggest.

It is significant that the majority of these cases do result in changes in the decision under review, as this implies that the ART is functioning as an effective safeguard against participants being affected by inconsistent or problematic decision-making.

Submission 353

Recommendation 18: Limit Ministerial and delegated powers; preserve parliamentary scrutiny

The Committee should recommend amendments to restrict the scope of Ministerial and  Page | 25

delegated legislative powers, particularly in relation to:

eligibility criteria;
functional capacity;
funding levels; and
support categories. The Committee should further recommend that:
matters central to eligibility, functional capacity, support categories, funding levels and planning processes remain in primary legislation or be subject to strengthened

parliamentary scrutiny; and

key funding and pricing decisions be referred to an independent authority, consistent with Recommendation 11 of the NDIS Review.

Increased reliance on unpaid care, informal supports and

community supports The draft Bill (Schedule 1, Part 6) strengthens assumptions about parental responsibility, role of community supports and informal supports by requiring the CEO of the NDIS to recognise the role of community and informal supports when making planning decisions, and by changing how the risk to the participant or family/carer are considered. The Bill also directs the prioritisation of informal supports over formal supports except when it is determined that formal supports are necessary. This will result in formal supports only being funded where it is determined that the risk (to the community or family/carer) cannot be mitigated through informal/lower cost support and supports being unreasonably denied.

Planning decisions must be based on participants’ actual support needs and must not assume that families, carers, or communities can absorb additional responsibilities. The Bill should explicitly recognise the limits and risks of informal care, including the disproportionate burden placed on carers, particularly women, and ensure that formal supports are not withheld based on presumed availability of lower-cost or informal alternatives.

Submission 353

Acknowledgements

We acknowledge the significant contribution of the Justice Equity Centre’s work in this area. Their

Page | 26   research and analysis have informed the development of this submission, particularly for

sections: Definition of Functional Capacity, Reviewable Decisions, Expanded use of delegated legislation and Ministerial instruments.

Recognition of Lived Experience

As a consumer lived experience-led organisation, the National Mental Health Consumer Alliance values the skill and expertise of consumers with lived experience. We pay tribute to those we have lost for the work that they have done to advocate for our rights. We acknowledge that we stand on the shoulders of giants who have paved the way for the rights we have today, and we will continue their work today and every day until the mental health system recognises and upholds our human rights.

Nothing about us without us.

Submission prepared May 2026. National Mental Health Consumer Alliance.

See nmhca.org.au for more information about the Alliance.

For questions about this submission, please contact us at policy@nmhca.org.au.

Submission 353

Endnotes

Page | 27

i Analysis of unmet need for psychosocial supports outside of the National Disability Insurance Scheme – Final Report, Australian Government August 2024 Final Report - Analysis of unmet need for psychosocial supports outside of the National Disability Insurance Scheme (May 2026)

ii Minister Butler speech at the National Press Club – 22 April 2026 | Health, Disability and Ageing

Ministers | Australian Government Department of Health, Disability and Ageing (May 2026)

iii ibid iv Australians with Down syndrome among those to suffer most from proposed NDIS cuts to social

activities | National disability insurance scheme | The Guardian (May 2026)

v Justice Equity Centre, Explainer: National Disability Insurance Scheme Amendment (Securing the NDIS

for Future Generations) Bill 2026, p2 vi Australia Post Mail Redirection: Cost, How to Apply, & FAQ (May 2026)

vii Justice Equity Centre, Explainer: National Disability Insurance Scheme Amendment (Securing the NDIS

for Future Generations) Bill 2026 viii ibid