Functional capacity assessment creates uncertainty for participants (Individual advocacy) | External submission

Submission 643

NDIS Amendment Bill

Submission to the Senate Community Affairs

Legislation Committee

Brotherhood of St. Laurence

May 2026

For further information or to discuss this submission, please contact:

Matt Rose Dr Nicole Bieske

Principal, Inclusion Director

Research, Policy and Advocacy Portfolio Research, Policy and Advocacy Portfolio

Summary

The Brotherhood of St. Laurence (BSL) is a social justice organisation working towards an Australia free of poverty. Our purpose is to advance a fair Australia through our leadership on policy reform, our partnerships with communities and the quality of our services. Our approach is informed directly by people experiencing disadvantage and uses evidence drawn from our research, together with insights from our programs and services, to develop practical solutions that work.

BSL has operated as a NDIS Partner in the Community (PITC) since 2016. We are contracted by the National Disability Insurance Agency (NDIA) to deliver Local Area Coordination (LAC) and the early childhood approach in Victoria across the North Eastern Melbourne, Hume/Merri-bek, Brimbank/Melton, Western Melbourne and Bayside Peninsula areas. This work includes building community capacity and inclusion through place-based projects.

This submission draws on our long-term practical experience across programs, service development and innovation initiatives and insights drawn from our research and policy analysis.

The National Disability Insurance Scheme (NDIS) reforms include positive elements to improve scheme sustainability and integrity. These include expanding provider registration, stronger integrity measures to reduce fraud, changes to reduce unscheduled plan reassessments and measures to better manage plan renewals.

Submission 643

NDIS Amendment Bill

However, the reforms also introduce risk for participants because the proposed legislation is so strongly focused on reducing the cost of the scheme. Participants experiencing intersecting disadvantage including limited financial resources are particularly at risk in this reform. In particular:

 The reforms propose moving many participants from the NDIS to other services (mainstream services, foundational supports and the Thriving Kids program). However, many of these services are not yet in place, and may not be in place when NDIS participant numbers are reduced by way of tighter eligibility and budget reductions. Those that are in place may not have the capacity or capability to take on additional participants. This exposes current participants to the risk of being moved from the NDIS to a service vacuum.

 The reforms grant the minister substantial discretionary powers to change (and reduce) support provided to participants without review. This creates risk and uncertainty for people with disability – and increases the likelihood that participants will be left without the support they need.

 The proposed NDIS eligibility changes – from diagnosis-based assessment to a standardised functional capacity assessment – creates uncertainty for participants. This is exacerbated by the likely use of an algorithmic tool to determine, or inform, assessment. Such tools may not capture the complexity and variation of many disabilities.

Overall, it is unclear how the proposed reforms to the NDIS address the problems of inequity of access identified by the NDIS Review.1 In fact, without appropriate design and careful implementation, the reforms have the potential to exacerbate inequity.

BSL is also concerned by the short time-frame allocated to consultation on this bill. This adds to the distress and anxiety in the disability community, and increases the risk of unintended consequences that may require subsequent remedial action and legislative change. Reform of this magnitude, with consequences of this magnitude for the disability community, requires more substantial consultation.

These and other more detailed comments are expanded in the remainder of the submission below.

Recommendations

Recommendation 1: An appropriate and sequenced inter-governmental transition period is put in place to ensure service systems outside the NDIS can support the changes proposed in the legislation.

Recommendation 2: The implications of eligibility for other schemes, particularly for First Nations people and aged care, be properly assessed and communicated prior to implementation of this legislation.

1 NDIS Review, Working together to deliver the NDIS: Independent Review into the National Disability Insurance Scheme – final report, October 2023, Department of Prime Minister and Cabinet, Canberra.

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Recommendation 3: Financial sustainability of the scheme be better defined and the Minister be required to publish the evidence they rely on to make decisions about financial sustainability.

Recommendation 4: Ministerial decisions about support determinations and reasonable and necessary supports should be subject to appropriate oversight such as a merits review process and/or a disallowance motion from the Parliament. A sunset clause should also be included as part of any determination to ensure a review point of the decision is built-in.

Recommendation 5: Any changes to the legislation should enable mechanisms for recognising the more complex needs of people experiencing disadvantage when making decisions on individualised participant funding, so as to not further entrench inequity.

Recommendation 6: A lived experience advisory group should be established to advise the Minister on equity of access to the NDIS.

Recommendation 7: The bill should make clear the extent to which automation can be used, and ensure that there is a mechanism for review by a person of automated decisions.

Recommendation 8: In relation to plan suspensions, the NDIA must consider each participant’s accessibility needs and what risk suspension of the plan would pose to the participant. This is particularly important for participants who have few or no informal supports and who may be dependent on paid supports.

Submission 643

NDIS Amendment Bill

1 NDIS Amendment Bill

The NDIS Amendment Bill seeks substantial changes to the NDIS in areas including measures to tighten eligibility; enabling the Minister to reduce funding for specified groups of supports; defining ‘functional capacity’ and applying new assessment tools; and a range of other changes including plan reassessments, support needs, plan end-dates and renewal processes, and assessment of ‘reasonable and necessary’ supports. Given the short timeframe for response, this submission provides BSL comment and recommendations against selected reforms.

Tightening eligibility without appropriate alternative services Elements of the amendment bill are designed to reduce the number of people remaining on the scheme and to restrict eligibility for new participants. However, many of the services people would require if they were excluded from the NDIS are not yet in place and may not be in place by the time the legislation would come into force. These changes also have implications for both the adequacy and equity of the scheme.

Parts 3, 8 and 9 of Schedule 1 of the bill all refer to restricting eligibility. The government’s intention through Part 3 as stated in the explanatory memorandum is that ‘support needs which relate to impairments that do not meet the disability requirements or early intervention requirements should not be funded by the NDIS and cannot be considered reasonable and necessary supports for a participant.’2 BSL acknowledges that this is an important part of reestablishing the sustainability of the scheme. However, we are concerned that people who have been receiving supports through the NDIS will be faced with increased administrative burden as they will be required to pursue supports through other service systems (public or private) being rebuilt in response to NDIS changes. The timing of these transitions across multiple service systems and any subsequent delay in participants accessing new supports outside of the scheme may lead to increased cost over time and more complex navigation.

If mismanaged, this would further deepen current inequities in the scheme as people with minimal resources, support and/or those with low levels of literacy will struggle to navigate these significant changes. This includes, among others, First Nations people with disability, those further from mainstream services in rural and remote communities and people with fewer social and community supports.

Part 8 of Schedule 1 inserts an approach to assessing permanence of impairments to be used when determining whether a person meets the disability or early intervention requirements. This includes a requirement for people to undertake all ‘appropriate treatment for the impairment or impairments’3 before an impairment will be considered permanent. It is unclear how appropriate treatments for each person will be defined and how people with multiple impairments will be

2 Parliament of the Commonwealth of Australia, House of Representatives, Explanatory Memorandum, National Disability Insurance Scheme Amendment (Securing the NDIS for Future Generations) Bill 2026, p. 25. 3 National Disability Insurance Scheme Amendment (Securing the NDIS for Future Generations) Bill 2026, Schedule 1, Part 8, p. 35.

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treated. There is a risk that people may be required to undertake treatments, however marginal to their individual needs, so they can access the scheme. The requirement for a person to undertake all appropriate treatments before they are assessed as able to access the NDIS raises concerns regarding equity and access to treatment by those with fewer resources or those who live in low or no-service areas. This requirement has the potential to further entrench inequity in the current scheme.

BSL understands that the intention of Part 9 is to tighten eligibility to the NDIS where alternative supports are available – through other service systems which can reasonably meet the needs of a person or where the service system has a responsibility for meeting the needs of a person, such as workers’ compensation or motor vehicle accident compensation schemes.

In relation to this, it is worth noting that First Nations people are eligible to access government funded aged care services from age 50 – which is earlier than non-First Nations people. This poses a risk that eligible First Nations participants will be forced into the aged care system rather than the NDIS where they could access more appropriate supports.

Recommendation 1: An appropriate and sequenced inter-governmental transition period is put in place to ensure service systems outside the NDIS can support the changes proposed in the legislation.

Ministerial powers Parts 4 and 6 of Schedule 1 provide significant new powers to the Minister. This is a fundamental change to the scheme. The bill is clear that the Minister can make a determination for the purpose of ensuring the financial sustainability of the scheme.4 The explanatory memorandum defines financial sustainability as ‘ensuring the Scheme can keep funding NDIS supports now and into the future without growing beyond what governments can sustainably fund’,5 which could be interpreted in a variety of ways. The bill does not include any requirement for consultation or evidentiary standards as to what financial sustainability might actually mean in relation to the NDIS.

The potential practical effect of this bill if passed is that, through a series of decisions, funding of participants’ plans could be dramatically reduced with very little oversight. This includes the inability of participants to seek review of unilateral decisions or of Parliament to disallow the determination. The support determination in Part 4 is also not time limited so could remain permanently in effect and there is no requirement for it to be reviewed.

4 National Disability Insurance Scheme Amendment (Securing the NDIS for Future Generations) Bill 2026, Schedule 1, Part 4, p. 12. 5Parliament of the Commonwealth of Australia, House of Representatives, Explanatory Memorandum, National Disability Insurance Scheme Amendment (Securing the NDIS for Future Generations) Bill 2026, p. 30.

Submission 643

NDIS Amendment Bill

The Minister is also able to make decisions that focus on the financial sustainability of the scheme with reference to reasonable and necessary supports.6 BSL has similar concerns about the lack of oversight and accountability of the Minister’s decisions relating to reasonable and necessary supports.

Recommendation 3: Financial sustainability of the scheme be better defined and the Minister be required to publish the evidence they rely on to make decisions about financial sustainability.

Impact on people experiencing disadvantage

The changes proposed in the bill have the potential to exacerbate the inequity of access that the NDIS independent review outlined. This includes how reasonable and necessary supports are funded, the eligibility requirement of participants to undertake all appropriate treatments and the government’s intention to reduce funding to community and social supports.

The government has been explicit in its discussion of reasonable and necessary supports and BSL understands the need to further define the parameters around what is considered reasonable and necessary. However, the bill separates recognition of need from appropriate funding of that need. The explanatory memorandum states that ‘what is reasonable to fund may be less than the actual cost of support’.7 This has equity implications as many people with disability will be unable to fund the cost gap to access the appropriate level of support.

The requirement for a person to undertake all appropriate treatments before they access the NDIS raises an equity issue in how treatments would be accessed by those with fewer resources or those who live in low or no-service areas. This requirement has the potential to further entrench the inequity in the scheme.

The Minister has indicated that there will be funding changes to the social and community support category of NDIS support.8 Many NDIS participants rely on this support to access activities that enable them to participate in and connect to their local community. Participants especially those without informal supports through family and friends rely on this support to connect with their community. Changes to this support stream mean disadvantaged people with disability may find themselves further isolated.

6 National Disability Insurance Scheme Amendment (Securing the NDIS for Future Generations) Bill 2026, Schedule 1, Part 6 7 Parliament of the Commonwealth of Australia, House of Representatives, Explanatory Memorandum, National Disability Insurance Scheme Amendment (Securing the NDIS for Future Generations) Bill 2026, p. 46. 8 The Hon Mark Butler MP, ‘Securing the future of the NDIS for future generations’ 22 April 2026

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Recommendation 6: A lived experience advisory group should be established to advise the Minister on equity of access to the NDIS.

New tools and community anxiety

BSL understands the importance of clarifying the meaning of functional capacity (Schedule 1, Part 1) but expresses concern about designing a standardised tool that will work for all. It is a difficult, if not impossible, task to design a tool that is necessarily robust and broad enough to cover all disability types as well as ensuring there is a workforce in place to administer it. It is critical this process is not rushed, and that consideration be given to the development of differentiated tools as appropriate. Alongside the work of the Technical Advisory Group, and as part of the design process, further consultation with people with lived experience should be undertaken to understand the implications for scheme participants of measuring functional capacity in the NDIS access process.

The bill also allows for automation tools. This is particularly concerning for the disability community in light of the robodebt scandal and the use of automation tools for aged care assessments. The government should proceed cautiously and ensure appropriate human review of automated decisions is built into the process.

Recommendation 7: The bill should make clear the extent to which automation can be used, and ensure that there is a mechanism for review of automated decisions by a person.

Other issues

The bill allows the NDIA to suspend plans where it is trying to get information from a participant, and the participant is not contactable.

Recommendation 8: In relation to plan suspensions, the NDIA must consider each participant’s individualised needs and what risk suspension of the plan would pose to the participant. This is particularly important for participants who have few or no informal supports and who may be dependent on paid supports.