NDIA Accountability Project

Protecting Supports for People with Psychosocial Disability

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Executive Summary – Submission to the Senate Inquiry National Disability Insurance Scheme

Amendment (Securing the NDIS for Future Generations) Bill 2026

Key Message

Reforms to strengthen the NDIS must not unintentionally exclude people with psychosocial disability. If eligibility, functional capacity, and reassessment processes are applied too narrowly, people will lose support, deteriorate, and return to crisis-driven systems — increasing both human and system costs.

About the Author

Douglas Holmes – lived experience of psychosocial disability; national advocate in peer support and systemic reform; Order of Australia Medal (2018); TheMHS Exceptional Contribution Award (2014); BEING Distinguished Service Award (2025).

Critical Risks

  • Functional Capacity Misinterpretation: Assessments may be based on supported stability, leading to loss of support and rapid deterioration.
  • Rigid Eligibility & Reassessments: Supports removed too early; re-entry delayed or blocked.
  • System Gaps: Mental health services are short-term and crisis-driven; they cannot replace disability supports.
  • Loss of Flexibility & Choice: Disruptions to trusted relationships risk disengagement and relapse.

Evidence & Real-World Impact

  • The TheMHS 23 Big Issues report highlights systemic failures: lack of continuity of care, crisis-only access, poor transitions, limited choice and control.
  • Example 1: Loss of NDIS supports after reassessment → decline → hospitalisation.
  • Example 2: Exit during stable period → no early support → crisis → delayed re-entry → prolonged instability.

What Must Be Protected

  • Psychosocial disability must remain clearly eligible.
  • Functional capacity must be assessed in context of supports and fluctuating needs.
  • Flexibility and continuity of trusted relationships must be preserved.
  • Mental health systems must not replace disability supports.
  • No participant should lose access until equivalent foundational supports are operating.

Conclusion

Psychosocial disability must remain fully recognised within the NDIS. Sustainability must not be achieved by narrowing access for people whose disability is less visible but no less real.

Full Submission to the Senate Inquiry National Disability Insurance Scheme Amendment

(Securing the NDIS for Future Generations) Bill 2026

Opening Statement

Reforms to strengthen the NDIS are important. However, if not carefully implemented, they risk unintentionally excluding people with psychosocial disability — the very cohort the Scheme was designed to support. Psychosocial disability is lifelong, episodic, and fluctuating. Stability is often the result of supports, not the absence of disability. Removing supports too early will drive people back into crisis systems, increasing both human and system costs.

About Me

My name is Douglas Holmes. I have lived experience of mental distress and psychosocial disability and have spent many years working in peer support, advocacy, and systemic reform. I was awarded TheMHS Exceptional Contribution Award (2014), an Order of Australia Medal (2018), and a Distinguished Service Award from BEING (2025) for my work supporting people with lived experience. This submission reflects both my personal experience and the collective voices of hundreds of people with lived experience through TheMHS forums.

Eligibility and Recognition of Psychosocial Disability

Psychosocial disability is real, often long-term, and significantly impacts functional capacity and participation in everyday life. Eligibility settings that rely on narrow interpretations of impairment risk excluding people whose disability is episodic, fluctuating, and highly dependent on support. If eligibility frameworks rely too heavily on static definitions of impairment or visible/permanent functional limitations, people with psychosocial disability are at high risk of being excluded.

Functional Capacity Must Reflect Real Life, Not Supported Stability

The Bill emphasises functional capacity assessments, which is appropriate — but how this is applied is critical. For people with psychosocial disability, stability is often the result of support — not the absence of disability. When supports are in place, people may appear capable, engage socially, and manage daily tasks. But without supports, there can be rapid decline in mental health, daily functioning, safety and stability. If assessments do not properly account for the impact of existing supports, environmental factors, and episodic and fluctuating conditions, then people may be incorrectly assessed as not meeting eligibility requirements.

The Bill seeks to clarify the boundary between NDIS supports and other service systems, particularly health. For people with psychosocial disability, this distinction is critical. Mental health services typically provide short-term clinical treatment, crisis response, and medication management. They do not provide ongoing daily living support, recovery-oriented capacity building, or consistent psychosocial support. NDIS supports fill this gap by providing recovery coaching, peer support, social and functional capacity-building, and assistance with daily living. Without NDIS support, many people are left with no system that meets their actual needs.

Plan Reassessments and Fluctuating Capacity

The Bill introduces stronger focus on plan reassessments and consistency of decision-making. However, psychosocial disability is inherently non-linear. People may improve for periods and deteriorate unexpectedly, requiring increased support at short notice. Rigid reassessment processes risk removing supports during periods of stability, creating barriers to re-entry when needs increase, and pushing people into crisis before support is restored. A system that does not allow flexibility in response to fluctuating capacity will fail people with psychosocial disability.

Funding Flexibility and Choice and Control

For people with psychosocial disability, flexibility is not optional — it is essential. Reduced flexibility could mean loss of trusted support workers, inability to respond to changing mental health needs, and reduced access to specialist supports. Choice and control are especially important because trust takes time to build and engagement depends on relationships. Disruption can lead to disengagement and relapse.

Continuity of Care and Support Relationships

Continuity of care is fundamental to outcomes. People with psychosocial disability often need long-term, stable relationships with peer workers, support workers and therapists. Relationships themselves are a core support. Disruptions can result in loss of progress, increased anxiety, withdrawal from support, and deterioration in mental health. The NDIS must continue to recognise that relationships themselves are a core support.

Access to Other Service Systems

The Bill assumes that other service systems may meet some needs. In reality, public mental health systems are overstretched, services are often crisis-driven, waitlists are long, and access is inconsistent. Many people with psychosial disability do not meet acute service thresholds, are discharged without ongoing support, and fall into a gap between systems. Without NDIS eligibility, these individuals are at significant risk of homelessness, hospitalisation, and social isolation.

Evidence from Lived Experience

The TheMHS 23 Big Issues report identified lack of continuity of care, access only in crisis, poor transitions between hospital and community care, limited choice and control, and exclusion from decision-making. These concerns are based on the collective input of hundreds of people with lived experience and remain unresolved.

Real-World Impact

  • Example 1: Loss of Support Leading to Hospitalisation A person with psychosocial disability remained stable for several years with consistent NDIS supports. Following reassessment, funding was reduced because they appeared stable while supports were in place. Their mental health deteriorated, resulting in hospitalisation and prolonged instability.

  • Example 2: Re-entry Barriers and Cycles of Instability Another person exited the NDIS during a period of stability. Without structured support, their condition worsened. When they sought re-entry, delays and evidence requirements resulted in significant distress and preventable instability.

What Government Needs to Understand

Psychosial disability is often lifelong and fluctuating. Functional capacity must be assessed in context, not isolation. Stability is often achieved through support. Mental health systems cannot replace disability supports. Flexibility and continuity are essential. Removing support increases long-term cost and harm.

Conclusion

The intent of the Bill to strengthen and sustain the NDIS is important. However, this must not come at the cost of excluding people with psychosial disability. If eligibility, functional capacity, and support definitions are applied too narrowly, people with psychosial disability will fall through systemic gaps, lose essential supports, and experience increased crises and instability. The NDIS has been transformative because it recognises that disability is not one-size-fits-all. That principle must continue — and it must continue to include people with psychosial disability.