Protecting provider viability and market stability (Provider advocacy) | External submission

Submission 790

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Level 1, 5 Edney Lane Spring Hill, NSW, 2500 Phone: 1300 347 224

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Submission to the Senate Community Affairs Committee

NDIS Amendment (Securing the NDIS for Future Generations) Bill 2026

Submitted by Karenza Louis-Smith, Group Chief Executive Officer

The Disability Trust Group

1 June 2026

The Disability Trust Group represents a national network of not-for-profit organisations supporting people with disability, psychosocial disability and complex needs across Australia.

Employing 4,500-plus people, the Group operates across 115 sites across New South Wales, ACT, Victoria, Queensland, South Australia and the NT and is the second largest provider of supported employment in Australia.

We deliver the full extent of high intensity daily supports for cognitive, physical and complex psychosocial disability that require a high level of training, planning and risk management. All organisations within our group are registered NDIS providers.

The Disability Trust Group welcomes the opportunity to provide input on the NDIS Amendment (Securing the NDIS for Future Generations) Bill 2026. We support the intent of the 2026 NDIS reforms, to strengthen sustainability, integrity, and trust in the Scheme. However, we are disappointed by the limited time provided to prepare a submission on changes of this magnitude, which has constrained meaningful consultation and considered input from many of the people we support across the country. We strongly urge Government to extend this time to allow for meaningful consultation.

From our perspective as a major national provider, while we welcome stronger fraud controls, regulation and clearer planning, we are deeply concerned that more rigid assessments, reduced flexibility, and changes to participation supports will limit choice, increase isolation, and force participants to trade off essential aspects of their lives like work and community connection.

In making these changes, Government must not ignore the interdependence between participant outcomes and a stable, well-functioning provider market.

Providers cannot adjust costs at the same pace as funding changes. Workforce obligations, quality and safeguarding requirements, and the fixed costs of delivering supports mean that reduced participant budgets translate quickly into operational pressure.

Submission 790

We are already seeing the practical consequences of system gaps, slow fraud enforcement, and decisions made without sufficient consultation or understanding of complex needs. At the same time, significant, rapid reductions to participant plans are placing strain on provider operating models and the stability of service delivery.
For years, providers have been drawing on their cash reserves to maintain continuity of supports and meet regulatory expectations. Without a managed transition and funding settings that align with the real cost of delivering services, these pressures will escalate quickly, and the market will become unstable.

We are particularly concerned about the speed of implementation. Rushed transitions, unclear alternative supports, and workforce constraints are highly likely to leave participants, especially those with psychosocial disability, without the support they need. This is foreseeable now, and there is still time to address this.

Our position is clear: Reform is necessary, and we support it, but it must be done in a way that protects what matters most. The NDIS will only succeed if it keeps people with disability at the centre and sustains a strong, capable provider sector around them.

What we support We support reforms that strengthen the integrity, sustainability and consistency of the NDIS, including:

Clearer and more consistent access and planning processes including clearer assessment frameworks, reduced ambiguity, and more transparent decision-making
Stronger safeguards and provider regulations to improve quality, safety and accountability across the Scheme and across every provider.
Enhanced fraud and compliance measures particularly to address exploitation and poor practice, especially in unregistered markets
Improved governance and transparency especially in pricing frameworks, policy decisions, and overall Scheme oversight
Greater consistency and equity across the Scheme so participants have more predictable and fair experiences regardless of location or circumstance
Long-term sustainability of the NDIS ensuring the Scheme remains viable for future generations, while maintaining community confidence

What we are concerned about We are concerned that aspects of the proposed reforms may result in unintended consequences for participants and providers, particularly:

Insufficient consultation and short timeframes, limiting meaningful engagement on major reforms
Rigid assessment and planning approaches that may not reflect the complexity or fluctuating nature of participant needs, especially for people with psychosocial disability.
Reduced flexibility and choice, including limits on plan reassessments as participant circumstances change and less responsive support over time

Submission 790

Potential significant reductions to social and community participation supports, which are critical to inclusion, employment and quality of life with little evidence of what if anything they will be replaced with.
The risk of participants losing supports without viable replacements,
Unclear pathways for participants with a psychosocial disability
Increased administrative burden on quality providers, diverting resources from frontline support
Pricing and policy settings that do not yet reflect complex needs, creating risks for specialist providers, and for participants
Over-reliance on automated decision-making without appropriate human oversight, and
Implementation and transition risks, including rushed timeframes, unclear alternative supports, and workforce constraints.

Response to the terms of reference: Our submission addresses The Disability Trust Group’s position on each schedule of the Bill, as follows:

Schedule 1: Access, Planning and Functional Capacity

We support efforts to improve clarity and consistency in access decisions and planning processes, particularly the move toward clearer assessment frameworks, more transparent decision-making, and reduced ambiguity in how eligibility and funding decisions are made. These are positive steps that can drive greater fairness, equity, and predictability for participants, while enabling providers to plan and deliver support with greater confidence and continuity.

Assessments, reviews and planning While we support clearer assessment frameworks, more transparent decision-making, and reduced ambiguity in access and planning, we have significant concerns regarding functional capacity assessments.

While standardisation may improve consistency, there is a risk that overly rigid assessments will fail to capture the lived reality and fluctuating needs of individuals, particularly those with psychosocial disability.

Limits on participant-requested plan reassessments may reduce responsiveness to changing needs and undermine participant’s choice and control.

Social and community participation changes We are deeply concerned about a blunt 30-50 per cent reduction in social and community participation support across the scheme without considering the individual circumstances of each participant.

From our perspective, the proposed reductions strike directly at the core of day services. These programs are funded almost entirely through this category and provide far more than “activities”; they deliver daily structure, skill development, social connection and a pathway to independence. When funding is reduced, the impact is immediate: fewer hours of support, reduced attendance, and growing pressure on the viability of group-based programs themselves.

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The government has been clear that cuts will mean participants have fewer hours available for these supports, and as a result, many of the people we support will simply have less access to the very services that enable them to leave home and engage in community life.

Many participants rely on this funding to access group-based day activities, which in turn enable carers to participate in paid employment, manage other caring responsibilities, and obtain informal respite. Broad reductions to funding in this NDIS category are likely to also have significant adverse effects on participants and their informal carers. This includes impacting people who work whilst the person they care for is supported in the community. Parents and carers are telling us they are deeply concerned as to how this will impact their families and their ability to work and provide care at the same time.

In addition, we are deeply concerned that reductions in social and community participation funding will have significant impacts on Supported Independent Living (SIL), particularly where support for this participation enables individuals to safely leave their home environment. This will impact SIL rosters of care, opening the risk of participants left in SIL homes with no support as they have no day program or work to attend. This needs to be very carefully explored.

With supported employment classified under the social and community participation category, and as the second largest provider of supported employment in Australia, we fear that participants funding may also be impacted.

The Disability Trust Group has seen first-hand the devastation and sense of loss supported employees at Bedford felt when the South Australia-based organisation was placed into voluntary administration, placing their jobs, routines and community participation at risk. Supported employment is not just about participation. It is about the dignity of work. The opportunity to contribute, to earn, and to be recognised for one’s skills is fundamental to identity, independence and self-worth.

For many people with disability, supported employment provides not only income, but purpose, routine and a sense of belonging within their community. These outcomes depend on consistent, structured supports that build capability over time, many of which are funded through the same participation and capacity-building pathways now under pressure.

If these supports are reduced, the impact goes beyond program access and directly affects a person’s ability to engage in meaningful work.

For context, in January this year, The Disability Trust formally acquired South Australia-based Bedford Services and Advisory Ltd. This secured the jobs around 800 supported workers and more than 300 other employees, all of whom had experienced months of distress while waiting to know whether Bedford’s services could be saved.

When The Disability Trust was announced publicly as the preferred buyer for Bedford, I stated: “We will protect what matters the most. Familiar routines, trusted relationships and meaningful work”.

These changes may further compound the impacts that they are already experiencing in connection with the implementation of funding periods under the NDIS.

Some supported employees are not funded within a funding period at a level sufficient to maintain full participation in supported employment. As a result, the participant may be required to take paid

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or unpaid leave until funding becomes available in the next funding period. This is disruptive for the employer, the participant’s routine, community inclusion, and the daily life of their informal carer.

For example, an adult participant of The Disability Trust’s Social Enterprises (supported employment) who lived at home with their parents, was underfunded and could not sustain employment across the full funding period. Consequently, the participant’s mother was required to take five weeks of leave from her own employment to provide support to her adult child. The participant’s behaviours escalated because of the disruption to their routine and their mother experienced significant burnout due to the sustained impact of these circumstances.

Without the stability of day services and community-based supports, the pathways into employment become weaker, and the capacity to sustain work is diminished. For The Disability Trust Group, this is a critical concern.

Any reform that undermines access to participation supports risks eroding the very foundations of economic inclusion.

Work is not an optional outcome: it is central to dignity, independence and full participation in society, and must remain a core focus of a strong and sustainable NDIS.

Uncertainty and fear are real for people who depend on the NDIS for their daily lives. Their futures are dependent on the Scheme its providers. When providers fail, or are under threat of failing, it is participants, their families and communities who are most impacted.

From a provider perspective, the issue comes down to staffing ratios and basic service economics.

Labour makes up most of our delivery costs, so when funding for social and community participation is reduced, providers will have little choice but to adjust staffing levels. In practice, that means higher ratios, with fewer staff supporting more participants. For many of the people we support, particularly those with higher needs, this is not a minor adjustment. It directly impacts the safety, quality and effectiveness of services, and risks excluding those who require lower ratios to participate meaningfully.

At the same time, group-based day services rely on critical mass to remain viable. If participant funding is reduced, attendance drops, group sizes shrink, and the cost per participant increases this will quickly push programs that are already marginal beyond levels that can be sustained.

This comes on top of a sector already under significant financial strain, with many providers operating at a loss and warning they cannot continue delivering services at current prices. The result is a very real risk of reduced program availability, consolidation of services, or providers exiting altogether. In simple terms, you cannot reduce funding in this area without impacting ratios, and once ratios shift too far, the viability of day services themselves comes into question.

The NDIS must be sustainable, without cutting what matters most to people, so that for quality, registered providers can thrive.

In this context, The Disability Trust shares the concerns raised across the sector. Sustainable reform is essential, but it must be carefully balanced to ensure that efforts to manage costs do not unintentionally undermine the outcomes the NDIS was designed to achieve. For the people

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we support, social and community participation is not an optional extra; it is central to wellbeing, independence, and quality of life.

Schedule 2: Fraud, Compliance and Provider Regulation

We strongly support strengthened fraud, compliance, and regulatory measures.

Provider registration reforms and stronger safeguards are critical to ensuring quality and safety, and to address fraud and exploitative practices.

We believe that qualified, registered providers are foundational to a safe and sustainable Scheme; however, compliance changes must not create an undue administrative burden that diverts resources away from frontline support.

Where fraud and sharp practices do occur, they flourish in the gaps created by these structural weaknesses, particularly in the unregistered market. We have seen participants enticed with inducements that were never delivered; plans stripped through misrepresented billing; and, in extreme cases, providers collapse overnight, abandoning dozens of people who must then rely on extraordinary, unfunded triage, coordination and risk management to stay safe.

For example, we see little action after fraud reporting to the NDIS, and this is a persistent, endemic issue in the Scheme. Any action we do see takes too long and is not nimble enough to have a safeguarding effect on the participant before their funding has been stripped, and they are entangled in complex unsafe arrangements.

We have more detail in our group’s submission to The Joint Standing Committee on the National Disability Insurance Scheme, and these were further highlighted by Deputy Group Chief Executive Officer Tarryn Bracken at a public hearing on 15 May. (This submission has been provided to the

Community Affairs Legislation Committee Secretary.)

As registration requirements change and market movements accelerate, there is a growing expectation that quality providers will assume market stewardship by default: an approach that is neither prudent nor acceptable.

Plan management changes must also be carefully implemented to avoid unintended consequences for participant choice and flexibility.

Claiming timeframe reduced from two years to 90 days Currently, NDIS providers have up to two years from the date a support is delivered to submit a claim to the NDIA. Schedule 2 of the Bill proposes to reduce this timeframe to 90 days from the date the support was provided.

This change would have a significant operational and financial impact on NDIS service providers. Reducing the claiming timeframe from two years to 90 days would require substantially faster administrative processing, stronger internal controls, and more timely documentation.

It would also increase the risk of unclaimed revenue, place additional pressure on provider cash flow, and impose a greater compliance burden, particularly on smaller providers and those with less mature administrative systems.

Submission 790

In addition, many providers may need to invest in new systems, process improvements, or additional administrative capacity to meet the proposed timeframe. For providers already managing frequent policy and operational changes, this may create a further financial and resourcing burden.

While a shorter claiming timeframe may support greater scheme discipline and timeliness, consideration should be given to a longer transition period or an alternative timeframe, such as six months, to better balance administrative feasibility with policy intent.

Schedule 3: Governance, Pricing and Automated Decisions

We support improved governance arrangements with greater transparency in pricing frameworks and long-term sustainability measures, including SIL commissioning, where appropriately designed.

However, automated administrative actions must include strong human oversight mechanisms to prevent inappropriate or harmful decisions.

Experienced providers must be meaningfully engaged in pricing and policy decisions. All too often decisions are made that have sudden and unintended consequences that impact the delivery of quality, safe support delivery.

Over the life of the NDIS, quality registered providers have borne the brunt of pricing and other changes to the Scheme that have had woefully inadequate consultation periods.

An example to note was the consultation period of just two weeks for the National Disability Insurance Scheme (NDIS) Amendment Bill 2024 and the draft lists of NDIS Supports. This was wholly insufficient for thorough review and meaningful feedback from stakeholders, participants, and carers.

When the 2023–24 NDIS Annual Pricing Review was announced, one of the changes was that high intensity supports for people with complex and challenging behaviours was downgraded to the standard supports category. This threatened the ability of specialist registered providers, like ermha365, to maintain operational viability and continue delivering support to its NDIS participants, most of whom are at the pointiest end of complex needs. The experience and pay rate of ermha365’s NDIS staff acknowledged this complexity, but the proposed change meant a reduction in funding available and a downgrading in recognition of the skill of workers in this area.

(After a concerted joint advocacy campaign called #4abetterNDIS, led by various peak bodies across Australia, High Intensity Supports pricing was reinstated.)

Provider viability and market stability We are deeply concerned about the impact that significant and rapid reductions to participant plans will have on provider viability and overall market stability. Over time, providers have built service models, workforce structures, and infrastructure around the current funding settings of the Scheme. Sudden or substantial funding contractions, particularly in categories such as social and community participation —will not simply result in “leaner” services, but in fundamental disruption to how support is delivered.

For many providers, especially those delivering group-based programs, supported employment, and high-intensity supports, financial viability depends on a critical mass of participants and relatively stable funding levels. When participant budgets are reduced, attendance drops, revenue becomes

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unpredictable, and fixed costs cannot be easily scaled down in the short term. This creates immediate pressure on cash flow, workforce retention, and service continuity.

In this context, the sector is likely to experience consolidation, service withdrawal, or provider exit, —particularly among smaller and specialist organisations. This is not a theoretical risk; it reflects the underlying economics of service delivery in a market where labour is the primary cost, and margins are already tight. As providers exit or reduce services, participant choice diminishes; access gaps widen, and the remaining providers face increased pressure to absorb demand.

A sustainable NDIS requires not only fiscally responsible participant plans, but also a stable and capable provider market. Reforms that materially reduce funding without a managed transition, clear alternative supports, and pricing that reflects the true cost of delivery risk destabilising the very sector the Scheme depends on. Protecting provider viability is therefore not a peripheral concern—it is fundamental to ensuring continuity, quality, and safety of supports for participants.

Reform is necessary, but it must be done with care.

You cannot reduce participant supports at scale without destabilising the provider market that delivers them. And when providers fail, it is participants who carry the consequences.

A sustainable NDIS must protect both—because one cannot exist without the other.

Effective consultation requires ample time and widespread dissemination to ensure all voices, especially those directly impacted, are heard and considered. Anything less raises concerns about the transparency and inclusiveness of the process.

Schedule 4: Technical Amendments

We acknowledge these amendments support implementation of prior reforms and improved planning frameworks.

Their success will depend on clear operational guidance, workforce readiness, and participant understanding.

Schedule 5: Transitional Provisions

Transitional arrangements will be critical to the success of this reform.

We are concerned that if changes are implemented too quickly, participants may be left unsupported before alternatives are in place, and providers may not have sufficient time to adjust.

While we fully support the concept of foundational supports, we are concerned about the adequacy of funding, consistency of delivery, and whether supports will be co-designed with people with lived experience.

Foundational supports are described as a new layer of community-based services designed to sit outside the NDIS, helping people with disability, including those with psychosocial disability who either won’t qualify for the scheme or don’t need intensive, lifelong funding. Critically, they respond to a large and growing cohort.

Submission 790

The Australian Bureau of Statistics’ 2022 report Disability, Ageing and Carers, Australia: Summary of Findings reveals that 1.7 million Australians (6.5% of the population) live with psychosocial disability, many of whom need some level of ongoing support.

For people with psychosocial disability, this reform is particularly significant because many experience fluctuating or episodic conditions that don’t neatly meet the NDIS requirement of being “permanent and significant.”

While about 65,000 people with psychosocial disability are currently supported in the NDIS, this represents only a fraction of those with serious need.

The Grattan Institute’s 2025 report Bridging the gap: Meeting the needs of Australians with psychosocial disability details that an estimated 130,000 Australians with significant psychosocial disability receive no support from either the NDIS or the broader mental health system, leaving many reliant on crisis services or unsupported altogether.

This comes at a time when access to the NDIS is already tightening, with approval rates for psychosocial disability reportedly dropping to around 25% and plans indicating that tens of thousands of people may be diverted away from the scheme. The worry is that people with significant and complex needs could be shifted into a system that is not designed, or funded, to support them adequately.

We are concerned about the strength and quality of these foundational supports.

Unlike the NDIS, which provides individualised funding, it appears that foundational support is expected to be more standardised, lower-cost, and commissioned at scale.

While this approach may work for early intervention and lower-level needs, the psychosocial cohort often requires flexible, long-term, recovery-oriented support that adapts over time. If these services are too generic or under-resourced, they risk failing to meet the real-world needs of people whose conditions are complex and fluctuating. We are deeply concerned that foundational supports could repeat the failures of the existing system outside the NDIS, which has long been fragmented and underfunded. Current evidence shows that around 130,000 Australians with significant psychosocial disability receive no support at all, highlighting the scale of unmet need. Without substantial and sustained investment, there is a real risk that foundational supports will not close this gap but instead formalises a two-tier system, where people with psychosocial disability continue to fall between mainstream services and the NDIS.

We strongly oppose any exit of participants, particularly those with psychosocial disability, without clearly designed, funded and operational alternative supports.

We also share our concerns from community and care-aligned sectors about workforce capacity to deliver these systems of support outside the NDIS.

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Recommendations

Sustainable savings will only be realised if implementation actively protects participants with complex needs, prioritises high-value supports, and avoids cost-shifting into more expensive systems

Embed genuine co-design with people with disability Government should mandate structured, ongoing consultation with people with disability, their families, and representative organisations throughout implementation. This should include formal co-design mechanisms at both policy and operational levels, ensuring that reforms are informed by lived experience and grounded in real-world impact. Effective consultation will reduce unintended consequences, improve decision quality, and lead to more sustainable and cost-effective outcomes.

Drive savings through efficiency, and fraud prevention

With major funding decisions already set, reform efforts should prioritise real-time fraud detection, administrative simplification, and system efficiency improvements to deliver sustainable savings without further reducing frontline supports.

Safeguard supports for participants with the most complex needs

Government should establish explicit safeguards for participants with high and complex support needs, including those with psychosocial disability, behavioural complexity, and high risk living arrangements. This should include protected access to essential supports, minimum support thresholds, and mandatory escalation pathways where funding constraints risk participant or community safety. Without these protections, there is a significant risk of harm, service failure, and increased reliance on far more costly crisis, health, and justice systems.

Strengthen foundational supports for psychosocial disability

Government should set clear service standards, funding benchmarks, and co-design requirements for foundational supports to ensure they meet the needs of people with psychosocial disability. These supports must be flexible, recovery-oriented, and adequately resourced to prevent increased reliance on crisis, health, and emergency systems. They must be clearly established before exiting participants from the scheme.

Implement structured transition safeguards Government should introduce staged transition arrangements, continuity protections for critical supports, and targeted risk monitoring for vulnerable participants. This will reduce service disruption and avoid costly reliance on emergency and acute systems.

Strengthen implementation controls and decision-making

The NDIA should enhance operational guidance, planner training, and exception pathways to ensure funding decisions are applied consistently and safely. Clear escalation mechanisms must be embedded to respond quickly where standard settings risk unintended harm or higher downstream costs.

Embed real-time monitoring and rapid adjustment Government should establish real-time monitoring of participant outcomes, provider viability, and market stability, with clear authority to rapidly adjust policy and operational settings where unintended consequences emerge.

Submission 790

Protect provider viability and market stability

Government should ensure that reforms to participant plans, pricing, and support categories are designed and implemented in a way that maintains provider viability and overall market stability. This should include formal market impact assessments prior to significant funding changes, particularly in social and community participation supports, and staged implementation to allow providers to adjust sustainably. Pricing must reflect the true cost of delivering quality supports, especially for group-based, specialist, and high-intensity services.

In addition, Government should establish real-time monitoring of provider financial health, service availability, and market exits, with clear intervention mechanisms where gaps emerge. Without deliberate safeguards, there is a significant risk of provider contraction, service disruption, and reduced participant choice. A sustainable NDIS depends not only on managing participant costs, but on maintaining a strong, capable provider sector to deliver supports safely, consistently, and at scale.

The success of these reforms will depend not only on what has been decided, but on how carefully implementation is managed to protect outcomes while delivering sustainable savings.

Conclusion

The Disability Trust supports the intent of strengthening the NDIS to ensure its long-term sustainability and integrity.

Registered, quality providers welcome this. We’ve been saying this for years.

We particularly welcome stronger regulation of providers, efforts to reduce fraud, and increased clarity in access and planning.

However, we urge caution to ensure reforms are not overly blunt and do not disproportionately impact those with the highest needs.

Reform must not come at the cost of inclusion, autonomy, and quality of life.

So, while reform is necessary, so too is protecting what makes the NDIS work: people with disability at the centre, and a strong, sustainable provider sector around them.