Concerns regarding adequacy of consultation on NDIS Bill (Individual advocacy)

National Disability Insurance Scheme Amendment (Securing the NDIS for Future Generations) Bill 2026 Submission 800

Submission to the Senate Community Affairs Legislation Committee

National Disability Insurance Scheme Amendment

(Securing the NDIS for Future Generations) Bill 2026

Submitted by: Illawarra Disability Alliance, 1 June 2026 (extended deadline)

Executive Summary

The Illawarra Disability Alliance (IDA) is a group of NDIS registered, not for profit disability service providers operating in the Illawarra and South Coast region of New South Wales. IDA supports the broad objectives of the Bill:

Protecting the NDIS for people with permanent and significant disability,
Reducing fraud, and
Returning the scheme to long-term financial sustainability. We acknowledge the genuine structural problems the reforms seek to address. However, we submit that several provisions in the Bill, as currently drafted, will cause serious and foreseeable harm to participants and the broader service system if passed without amendment. IDA makes nine (9) recommendations for amendment or further action, set out in this submission.

About the IDA

The Illawarra Disability Alliance (IDA) is an alliance of NDIS registered, not for profit disability service providers providing services in the Illawarra Shoalhaven region of New South Wales. IDA is supported by the Community Industry Group (CIG) — the peak body for community services in Southern NSW. IDA’s membership comprises disability service providers delivering the full spectrum of NDIS-funded supports, including Supported Independent Living (SIL), Specialist Disability Accommodation (SDA), community participation, day programs, supported employment, support coordination, plan management, early childhood intervention, and allied health. Our member organisations collectively support several thousand NDIS participants across the region.

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Submission 800

IDA regularly convenes provider roundtables, participates in NDIA local area engagement, and meets with state and federal elected representatives on matters affecting the disability sector. On 5 May 2026, IDA convened a one-hour provider consultation session specifically to canvass provider responses to Minister Butler’s reform announcements, with nine provider organisations in attendance. This submission draws directly on that consultation.

Preliminary Concern: Adequacy of Consultation Before addressing the substance of the Bill, IDA submits that the consultation timeline attached to this inquiry is inadequate for legislation of this magnitude.

The Bill was introduced on 14 May 2026 and referred to this Committee on the same day. The original submission deadline was 29 May 2026, a period of only 15 days for the community to review a 109-page Bill with five schedules containing amendments affecting eligibility, planning, fraud measures, governance and the new framework.
The Senate extended the deadline to 1 June 2026 following widespread sector concern, but this remains an extraordinarily compressed timeline for the most significant legislative change to the NDIS since its establishment. The Illawarra Disability Alliance strongly urges the Committee to recommend that the Senate allow adequate time for proper parliamentary scrutiny of this Bill, including at minimum a public hearing process, before the Bill proceeds to a vote. The principle of “nothing about us, without us” cannot be honoured by a 15-day consultation window on 109 pages of legislation. Recommendation 1: The Committee should recommend that the Senate extend the reporting date to allow for public hearings and meaningful community consultation on the Bill, consistent with the significance and complexity of the proposed legislative changes.

Functional Capacity Assessments IDA acknowledges that a shift to a functional capacity-based eligibility assessment may better capture the lived impact of impairment than a purely diagnosis-based model. We do not oppose this in principle. Our concerns go to design, implementation and risk.

The assessment tool has not been designed, consulted on or piloted. Schedule 1 legislates a framework for functional capacity-based access determinations, but the tool, the I-CAN instrument, has not been properly tested or piloted and will be

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developed by the Technical Advisory Group (TAG) commencing mid-2026. The Bill therefore authorises highly consequential eligibility decisions before the tool those decisions will depend on has been properly validated.

People with psychosocial disability are at disproportionate risk of being disadvantaged by point-in-time functional capacity assessments. Psychosocial disability is episodic and variable; a person may present as functional during assessment but require substantial support at other times. This variability is inherently difficult to capture in a one-time assessment and is not reliably detected by tools designed for physical or intellectual impairments.
The Bill clarifies that the NDIA may consider whether a person ‘could be’ eligible for supports from other service systems (Part 9). In the absence of funded, operational alternative service systems, particularly for psychosocial disability, this provision creates a legal basis for denying NDIS access based on a theoretical alternative that does not exist in practice.
An estimated 160,000 people may be removed from the NDIS through the eligibility changes. The community mental health sector has no capacity to absorb this number. Recommendation 2: The Bill should be amended to require that:

a) the functional capacity assessment tool be developed through co-design with people with lived experience of all impairment types, including psychosocial disability, and independently validated before it is used in access decisions,

b) eligibility based on access to ‘other service systems’ cannot be applied unless and until those alternative services are funded, operational and accessible in the participant’s region, and

c) people with psychosocial disability receive a tailored assessment approach developed by practitioners with psychosocial expertise.

Restriction of Unscheduled Plan Reassessments Part 2 of Schedule 1 specifies the circumstances in which a participant can request a plan reassessment. IDA’s members identified this as one of the highest-risk provisions in the Bill for participant safety and for flow-on costs to the health and hospital systems.

Unscheduled plan reassessments currently function as an early intervention mechanism. They allow providers and participants to request additional funding when needs escalate for example following a health event, a breakdown in informal supports, or deterioration in behaviour. This prevents crisis presentations to hospitals.
When this mechanism is restricted, providers face an impossible position: continuing to deliver support with inadequate funding (unsustainable), reducing the level of care (unsafe), or taking a participant to hospital. As stated directly in

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the IDA consultation by one of the CEO’s who participated: “What you’ll find is that services… can’t provide a service that’s safe anymore… The only option you have is to take that person to a hospital setting.”

This is not a hypothetical risk. In the Illawarra Shoalhaven Local Health District, 125 hospital beds were occupied by patients awaiting NDIS or aged care discharge as of October 2025, already described as the worst bed block situation in the country. Restricting plan reassessments will add to this number at a cost of $2,000–$3,000 per hospital bed per day with concomitant impacts on the participants’ health and wellbeing, elective surgery waitlists and other flow on effects.
The Bill also expands the NDIA’s ability to suspend plans in certain circumstances (Part 7). Combined with restriction of reassessments, participants with escalating needs may find themselves with inadequate plans they cannot change. This creates huge safety and legal risks for providers who are legally required to deliver safe, appropriate support.

Recommendation 3: The Bill should be amended to preserve the ability of registered (i.e. quality, trusted) providers, on behalf of participants, to request an unscheduled plan reassessment when there is a documented, material change in the participant’s support needs that creates a risk to the safety of the participant or others. Restriction of unscheduled reassessments should not apply to participants in SIL or other 24-hour care settings without an alternative funded escalation pathway being specified in the legislation.

Support Determinations and Ministerial Budget

Reduction Powers

Part 4 of Schedule 1 introduces “support determinations” and enables Ministerial determinations to reduce funding for groups of supports, specifically to reset social, civic and community participation (CP) and capacity building budgets. Part 6 clarifies factors for determining what is “reasonable and necessary”.

These provisions are the legislative vehicle for the community participation budget reset announced at the National Press Club, reducing average plan values from approximately $31,000 to $26,000. IDA does not oppose the general principle of reviewing funding levels where evidence supports it, but we have significant concerns about the mechanism and the specific impact on both formal and informal day supports (e.g. SIL services and families) and supported employment.
Any reductions in CP funding will have direct impacts on SIL service provision, where participants reside in SIL, or on family based carers who will be required to

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provide care and support services at times where the participant currently accesses their community supports.

Given that Supported Employment is currently classified and funded under the social and community participation support category the Ministerial determination power to reduce CP budgets would directly reduce, or potentially eliminate, funding for supported employment for thousands of participants. This forces an impossible choice: work or community engagement, not both. No other government program (including Disability Employment /Inclusive Employment Australia) can replicate the intensity of supported employment needed by the NDIS cohort most reliant on it.
The comparison of $4 billion (original CP spending) to $12 billion (current) has been contested by providers, who noted that the original figure may have included flexible supports and supported employment under different classification arrangements. Before a Ministerial determination reducing CP budgets is made, the Bill should require publication of like-for-like data and a specific impact assessment on supported employment.
Part 4 grants the Minister a concerning broad determination-making power with very limited parliamentary scrutiny. IDA submits that reductions of this magnitude to participant budgets, which directly affect the daily lives, independence and employment of people with disability, require disallowable instruments or formal legislative review, not unfettered Ministerial discretion.

Recommendation 4: The Bill should be amended to: (a) require that any Ministerial determination reducing community participation funding be accompanied by a published, independent impact assessment including analysis of the effect on supported employment participants and the additional caring burden and cost on SIL and informal carers; (b) explicitly exclude or separately quarantine (e.g. through the creation of a separate support category) supported employment from any reduction in community participation budgets until supported employment is re classified under a standalone funding category; and (c) ensure that Ministerial determinations reducing participant budgets are subject to parliamentary disallowance.

Fraud Measures and Provider Registration (Schedule 2) IDA and its member organisations strongly support Schedule 2’s intent to reduce fraud and lift the standard of provider accountability. The expansion of mandatory registration, new civil penalty provisions, enhanced information gathering powers and the digital payment system are all welcome and long overdue. However, we raise two implementation concerns.

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5.1 Mandatory Registration – Unregistered SIL Provider Exit Risk

Mandatory SIL provider registration commences 1 July 2026 — less than 5 weeks away. There is currently no published guidance, transition protocol or partnership pathway for unregistered SIL providers. The most acute health system risk identified by providers in the IDA consultation was the prospect of unregistered SIL providers exiting the market in an unplanned manner, leaving participants without accommodation and support.

5.2 Mandatory Registration - Audit Workforce Capacity

All nine providers at the IDA consultation expressed unequivocal support for expanding mandatory registration — including its application to SIL providers (effective 1 July 2026). Ending unregistered provider participation in high-risk settings is critical for participant safety.
However, there is currently insufficient audit workforce capacity to process the volume of registrations the expansion will generate. Providers seeking their next scheduled audit are already unable to book appointments within 2026, with waiting lists extending beyond the commencement date of mandatory SIL registration.
Without a commensurate expansion in Quality and Safeguards Commission audit capacity, compliant providers may find themselves technically non-compliant through no fault of their own, while the fraud-reduction benefits of the expansion are delayed. This competitive inequity, between providers who can book an audit and those who cannot, needs to be addressed in the Bill or accompanying policy.

Recommendation 5: The Bill should require a published SIL Provider Transition Protocol, including guidance, partnership arrangements and managed exit provisions, prior to the 1 July 2026 mandatory registration date.

Recommendation 6: The Bill should require a published Quality and Safeguards Commission audit workforce capacity plan demonstrating how auditor supply will meet the demand generated by expanded mandatory registration. Pending publication of such a plan, the commencement of mandatory registration for SIL providers should incorporate a compliance grace period for providers who are on the Commission’s audit waiting list and actively pursuing registration.

Transitional Rules – Schedule 5 Schedule 5 provides the Minister with power to make transitional rules for up to 12 months following the commencement of each part. IDA supports appropriate flexibility

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for transitional arrangements, but we are concerned that the power is insufficient to manage the transition risks that providers and participants have identified.

Participants currently who may not meet the new eligibility criteria face profound disruption without adequate transition arrangements. The IDA consultation included testimony from multiple providers that participants in this situation are not aware of upcoming changes and have not received proactive communication from the NDIA.
Participants who do not have support coordination are particularly vulnerable. They have no system navigator to help them through the transition and may not receive timely information about changes to their plans. The transitional rules power does not substitute for a legislated obligation on the NDIA to develop and publish a participant transition plan, support providers in developing transition arrangements, and fund transition support activities. IDA recommends that such an obligation be included in the Bill.

Recommendation 7: The Bill should be amended to insert a legislated obligation on the NDIA to:

a) develop and publish a participant-facing transition plan for each cohort affected by the reforms, in accessible formats, no later than 60 days before the relevant change takes effect, and

b) fund registered providers to deliver transition support to participants moving between service systems, including participants exiting the NDIS.

Support Coordination and System Navigation While support coordination is addressed primarily through the proposed 30% reduction in intermediary spending (not directly in the Bill as introduced), the Bill creates the legal and planning framework within which support coordination will be dramatically reduced in scope and funding. IDA submits that this context must be addressed by the Committee.

Support coordination was described by every provider at the IDA consultation as the essential function that prevents participant crises from becoming hospital system crises. Providers already absorb an estimated $500,000+ annually in unfunded support coordination tasks in order to support participants navigate system complexity (Ability Roundtable data cited in consultation). The 30% intermediary spending reduction will push this well beyond viability.
The navigator role which is proposed as a partial successor to support coordination remains entirely undefined. There is no confirmed scope of practice,

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workforce plan, budget, deployment timeline or relationship to existing LAC and support coordination infrastructure. The Bill does not place any obligation on the NDIA or the Minister to maintain a minimum level of support coordination for participants with high and complex needs. IDA recommends that such a protection be inserted.

Recommendation 8: The Bill should be amended to insert a provision requiring the NDIA to maintain access to funded support coordination for participants who:

a) are in SIL or 24-hour care settings, b) have active mental health or psychosocial disability, c) have no or limited informal support networks, or d) are undergoing a transition under the new framework. Any reduction in support coordination funding for these cohorts should not take effect until the navigator model is operational, defined and independently evaluated.

Uncosted Cost Shifting to NSW Health and State and

Territory Systems

IDA draws the Committee’s attention to a systemic risk that is not addressed in the Bill or accompanying explanatory memorandum: the cost-shifting from the NDIS to state and territory health systems that will follow from these reforms if implemented without adequate transition arrangements and in absence of mature and capable foundational support systems and programs.

In the Illawarra Shoalhaven Local Health District, 125 hospital beds were occupied by patients awaiting NDIS or aged care discharge as of October 2025, up 24% in 12 months. This is already the worst NDIS-related bed block situation in Australia per Community Industry Group CEO Nicky Sloan.
Nationally, NDIS participants wait an average of 16 days for discharge once medically ready, at a cost of $2,000–$3,000 per bed day. Reforms that increase this number, through eligibility exits, plan reductions, provider collapse or loss of support coordination, will directly inflate the cost burden on State and Territory Health systems.
The Bill’s Regulatory Impact Statement does not model the cost to State Health systems of these spillover effects. IDA submits that this is a fundamental gap in the Commonwealth’s financial analysis. The projected $37.8 billion in NDIS savings must be assessed against the costs imposed on other public systems including expanded foundational supports and impacts on state hospital budgets, before the Bill is passed.

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Recommendation 9: The government publish, before the Bill is passed, a whole-of government financial analysis modelling the projected increase in costs to State and Territory Health systems (mental health services, housing systems and homelessness services etc) arising from the reforms. This analysis should be conducted jointly with State and Territory governments and inform any modifications to the transition sequencing of the Bill’s provisions.

Summary of Recommendations Recommendation 1: The Committee should recommend that the Senate extend the reporting date to allow for public hearings and meaningful community consultation on the Bill, consistent with the significance and complexity of the proposed legislative changes. Recommendation 2: The Bill should be amended to require that: (a) the functional capacity assessment tool be developed through co-design with people with lived experience of all impairment types, including psychosocial disability, and independently validated before it is used in access decisions, (b) eligibility based on access to ‘other service systems’ cannot be applied unless and until those alternative services are funded, operational and accessible in the participant’s region, and (c) people with psychosocial disability receive a tailored assessment approach developed by practitioners with psychosocial expertise. Recommendation 3: The Bill should be amended to preserve the ability of registered (i.e. quality, trusted) providers, on behalf of participants, to request an unscheduled plan reassessment when there is a documented, material change in the participant’s support needs that creates a risk to the safety of the participant or others. Restriction of unscheduled reassessments should not apply to participants in SIL or other 24-hour care settings without an alternative funded escalation pathway being specified in the legislation. Recommendation 4: The Bill should be amended to: (a) require that any Ministerial determination reducing community participation funding be accompanied by a published, independent impact assessment including analysis of the effect on supported employment participants and the additional caring burden and cost on SIL and informal carers; (b) explicitly exclude or separately quarantine (e.g. through the creation of a separate support category) supported employment from any reduction in community participation budgets until supported employment is re-classified under a

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standalone funding category; and (c) ensure that Ministerial determinations reducing participant budgets are subject to parliamentary disallowance. Recommendation 5: The Bill should require a published SIL Provider Transition Protocol, including guidance, partnership arrangements and managed exit provisions, prior to the 1 July 2026 mandatory registration date. Recommendation 6: The Bill should require a published Quality and Safeguards Commission audit workforce capacity plan demonstrating how auditor supply will meet the demand generated by expanded mandatory registration. Pending publication of such a plan, the commencement of mandatory registration for SIL providers should incorporate a compliance grace period for providers who are on the Commission’s audit waiting list and actively pursuing registration. Recommendation 7: The Bill should be amended to insert a legislated obligation on the NDIA to: (a) develop and publish a participant-facing transition plan for each cohort affected by the reforms, in accessible formats, no later than 60 days before the relevant change takes effect, and (b) fund registered providers to deliver transition support to participants moving between service systems, including participants exiting the NDIS.

Recommendation 8: The Bill should be amended to insert a provision requiring the NDIA to maintain access to funded support coordination for participants who: (a) are in SIL or 24-hour care settings, (b) have active mental health or psychosocial disability, (c) have no or limited informal support networks, or (d) are undergoing a transition under the new framework. Any reduction in support coordination funding for these cohorts should not take effect until the navigator model is operational, defined and independently evaluated.

Conclusion The members of the Illawarra Disability Alliance support the long-term sustainability of the NDIS and acknowledges the genuine reform imperatives that this Bill addresses. Fraud reduction, provider accountability, and a return to the scheme’s original purpose are objectives we strongly share.

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However, we submit that the Bill as currently drafted contains provisions that will cause serious and preventable harm to participants, including people in SIL who face provider collapse, participants with psychosocial disability who face loss of access without alternative services, and participants with escalating needs who will have fewer avenues to have their plans adjusted. These harms are foreseeable and grounded in evidence from our regional provider consultation and from the national picture. We call on the Committee to recommend the amendments outlined in this submission before the Bill is passed. IDA is willing to provide further evidence, including by members with relevant subject matter expertise and sector knowledge appearing at a public hearing if the Committee’s timeline is extended. We thank the Committee for the opportunity to make this submission.

Submission to the Senate Community Affairs Legislation Committee

National Disability Insurance Scheme Amendment

Executive Summary

About the IDA

Reduction Powers

5.1 Mandatory Registration – Unregistered SIL Provider Exit Risk

5.2 Mandatory Registration - Audit Workforce Capacity

Territory Systems

Contact

Nicky Sloan, Chief Executive Officer

Community Industry Group

PO Box 156, Port Kembla NSW 2505