{"id":11243,"date":"2026-05-14T09:08:19","date_gmt":"2026-05-14T09:08:19","guid":{"rendered":"https:\/\/www.europesays.com\/australia\/11243\/"},"modified":"2026-05-14T09:08:19","modified_gmt":"2026-05-14T09:08:19","slug":"ndis-overhaul-new-labor-laws-aim-to-slash-38-billion-in-spending-through-tighter-eligibility-and-ministerial-budget-powers","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/australia\/11243\/","title":{"rendered":"NDIS overhaul: New Labor laws aim to slash $38 billion in spending through tighter eligibility and ministerial budget powers"},"content":{"rendered":"

\"Natassia<\/p>\n

Updated May 14, 2026 \u2014 6:04pm,first published 4:00pm<\/p>\n

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Labor\u2019s new laws to limit who can access the National Disability Insurance Scheme will give the responsible minister sweeping powers to make mass cuts to budgets or therapies and enable automated decision-making, in efforts to cut spending by $38 billion in four years.<\/p>\n

Health Minister Mark Butler\u2019s bill to restrict who can join the $56 billion NDIS, introduced to parliament on Thursday, will require people to have exhausted all other treatment options before they are considered permanently impaired to enter the scheme.<\/p>\n

\"MarkMark Butler during a press conference at Parliament House in Canberra on Thursday.Alex Ellinghausen\/image digitally tinted<\/p>\n

Broad ministerial powers will allow Butler to put an instant brake on certain parts of the scheme if costs start spiralling, but the minister assured participants that any automation would be carefully considered and focus on administrative tasks, as he sought to allay fears of a \u201crobo-debt\u201d scenario.<\/p>\n

These laws are crucial for the government to action its NDIS overhaul and recoup about $170 billion in a decade. More than half the $64 billion savings banked in Tuesday\u2019s budget assume NDIS eligibility and spending will be drastically curtailed within four years.<\/p>\n

But Labor\u2019s plans immediately hit a hurdle on Thursday when the Senate sent the bill to an inquiry, due to report by June, and the Greens declared it \u201cone of the most dangerous pieces of legislation that has ever been put forward by our government in relation to disabled people\u201d.<\/p>\n

\u201cThis new bill makes massive, significant changes to the NDIS that will make life harder for disabled people across the country,\u201d said Greens disability spokesman Jordon Steele-John.<\/p>\n

\u201cIt also grants the minister vast new powers, which they do not have today, to make massive changes to the supports that disabled people and our families have in place right now. And they can make those decisions while sitting behind a desk in Canberra without ever having to talk to you.\u201d<\/p>\n

The government will need the Coalition\u2019s support to pass the bill.<\/p>\n

\u201cThe Coalition will review the bill carefully and consult with the disability community through the Senate inquiry, which I think is an important part of the process,\u201d said spokeswoman Melissa McIntosh.<\/p>\n

NDIS blowouts have eroded Labor\u2019s bottom line as wide eligibility criteria, loose regulation and vague legal definitions have allowed the scheme\u2019s costs to grow by more than 10 per cent a year. The overhaul aims to restore it to its original purpose so it grows at 5 per cent in future.<\/p>\n

\u201cThe NDIS was intended to operate as a targeted, insurance-based scheme for people with permanent and significant disability,\u201d said the bill\u2019s explanatory document, published on Thursday.<\/p>\n

\u201cIt is not intended to operate as an unconstrained funding source for all disability-related needs, nor should it be used to address supports that would be more appropriately provided by other service systems.\u201d<\/p>\n

Up to 300,000 people will be removed from the scheme when eligibility changes come in from January 2028. Tuesday\u2019s budget papers show annual NDIS funding will go backwards to $55 billion as changes roll out, before returning to $56.2 billion in 2029-30.<\/p>\n

New laws reveal first steps to eligibility changes<\/p>\n

The bill clarifies that someone\u2019s \u201cfunctional capacity\u201d is assessed on whether they can perform an activity without help from other people, technology or modifications \u2013 it does not consider personal circumstances, such as their financial means or living arrangements.<\/p>\n

It also clarifies how \u201cpermanent impairments\u201d are defined, saying someone must have explored all other appropriate treatments before accessing the scheme.<\/p>\n

\u201cAn impairment cannot be found to be permanent if there is any other treatment which is likely to materially improve, reverse, or alleviate the impact,\u201d the explanation says. \u201cTo be found permanent, the person\u2019s impairment or impairments are likely to persist for the person\u2019s lifetime.\u201d<\/p>\n

The laws will tighten eligibility for the NDIS if there are other supports or services that could meet someone\u2019s needs. These include if someone can access workers compensation or motor vehicle accident compensation schemes, affecting an estimated 8000 participants.<\/p>\n

\u201cThis scheme was never set up to become a substitute for health and rehabilitation and other treatment that could potentially prevent lifelong disability, so we will put in place rules that that make that much clearer,\u201d Butler said on Thursday.<\/p>\n

\u201cWe won\u2019t, for example, require people with profound hearing loss to receive a cochlear implant. There will be exceptions to that question of treatment, and the detail of that will be developed.\u201d<\/p>\n

The laws will also confirm people can access NDIS support only for needs that arise directly from their qualifying impairment. This means that someone with cerebral palsy using the scheme, for example, cannot get support for ADHD or dyslexia.<\/p>\n

Related Article\"The<\/a><\/p>\n

These changes will override court and tribunal decisions that have expanded the NDIS\u2019 scope, as well as the automatic \u201caccess lists\u201d that currently guarantee people can enter the scheme with diagnoses such as level two or three autism.<\/p>\n

A technical advisory group will give the government advice on the appropriate thresholds and assessments for eligibility, and it will be informed by community consultation.<\/p>\n

Sweeping powers give minister control over spending<\/p>\n

Thursday\u2019s laws also give the minister new powers to make blunt cuts that limit either how much money is allocated, or how many supports can be accessed, in certain sections of the NDIS.<\/p>\n

\u201cThese determinations are not applied on a \u2018plan-by-plan\u2019 basis, but rather have the effect of reducing the funding for certain groups of supports across the scheme,\u201d the explanation said.<\/p>\n

This measure is designed to allow the minister to \u201cdirectly manage the financial sustainability of the scheme\u201d, and any changes to people\u2019s funding as a result will not be subject to merits reviews.<\/p>\n

Butler last month said he would use this power to cull people\u2019s social and community participation budgets, which tripled to $12 billion in five years. He will reset this funding at 2023 levels to quickly cut spending.<\/p>\n

\u201cI also intend to reset the therapy budgets, which on average, will mean … a shift from around 71 or 72 hours of therapy a year, down to about 68 hours of therapy per year,\u201d he said on Thursday.<\/p>\n

Related Article\"Health<\/a><\/p>\n

The minister will gain powers to set prices, instead of the National Disability Insurance Agency, and Butler plans to pay registered providers more for the same service than unregistered providers.<\/p>\n

Laws tackling fraud will enable new civil penalties and give the National Disability Insurance Agency powers to investigate criminal activity. Providers and participants will have to keep records for specified periods of time, and make claims within 90 days of a support being provided.<\/p>\n

They also enable other changes Butler announced last month<\/a>, such as clamping down on unscheduled plan reassessments that have been a key driver of NDIS inflation, and moving to a system where the government decides what plan managers people can use.<\/p>\n

Cut through the noise of federal politics with news, views and expert analysis. Subscribers can sign up to our weekly Inside Politics newsletter<\/a>.<\/p>\n

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\"NatassiaNatassia Chrysanthos<\/a> is Federal Political Correspondent. She has previously reported on immigration, health, social issues and the NDIS from Parliament House in Canberra.Connect via X<\/a> or email<\/a>.From our partners<\/p>\n","protected":false},"excerpt":{"rendered":"Updated May 14, 2026 \u2014 6:04pm,first published 4:00pm Save You have reached your maximum number of saved items.…\n","protected":false},"author":2,"featured_media":11244,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[22,21],"class_list":{"0":"post-11243","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-australia","8":"tag-au","9":"tag-austrlia"},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/posts\/11243","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/comments?post=11243"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/posts\/11243\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/media\/11244"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/media?parent=11243"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/categories?post=11243"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/tags?post=11243"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}