Is the Federal Government’s NDIS “Reset” Just a Return to the Pre‑NDIS Era?

The Federal Government’s new approach to controlling NDIS spending is raising a familiar concern: are we quietly drifting back to the days before the NDIS existed?

Block funding to states. Centralised control. Regulated providers. If you lived through state‑based disability systems before 2013, the language coming from Canberra feels uncomfortably familiar.

The Government says the goal is to slow cost growth, tighten access, and refocus the scheme on people with “permanent and significant” disability. But the scale and speed of the changes announced on 22 April 2026 suggest something much bigger than routine reform.

Key Policy Shifts Announced on 22 April 2026

Stricter eligibility and clearer boundaries Tighter definitions of what the NDIS funds versus what should sit with mainstream systems like health and education.
New assessment-based access system Functional capacity assessments will replace diagnosis‑driven entry.
New planning framework More standardised budgets and planning processes from April 2027.
More scrutiny of supports Tighter “reasonable and necessary” rules and more frequent reassessments from 2027.
Spending limits in specific categories Particularly social and community participation from October 2026.
Fraud and integrity focus Stronger action on misuse and provider behaviour.

The Five Biggest Practical Changes

This is a structural reset — not incremental reform.

Large-scale participant reduction Government projections indicate around 160,000 people removed from the scheme by 2030, reducing total participants to roughly 600,000.
End of “diagnosis = access” Conditions such as autism will no longer guarantee entry. Eligibility will depend on the severity of functional impairment.
Children and lower‑needs participants diverted Many — especially children with milder autism — will be redirected to new state‑run “foundational supports”.
Major cost containment Annual growth is targeted to fall from ~10% to ~2%, equating to around $35 billion in savings this decade.
System redesign to close the “diagnosis gateway” New assessment tools (expected by 2028), tighter budgets, and stronger provider regulation.

Federal–State Tensions Are Already Escalating

The reforms rely heavily on states delivering alternative supports. Yet state leaders say they were not consulted — and that they lack the funding and infrastructure to absorb tens of thousands of people exiting the NDIS.

Reactions reported by the ABC include:

New South Wales – Chris Minns“The state cannot absorb the costs or responsibilities.”“The health system will not be able to provide equivalent care.”
Queensland – Amanda Camm“The biggest cost shift in history.”“Little detail and … little consultation.”“Decoupled the carriages and sent them the states’ way.”
Western Australia – Roger Cook“It’s a Commonwealth program, so we don’t want to pay for it.”“I wish I’d had a briefing.”

The core issue: people removed from the NDIS will be expected to rely on state‑run services that, according to experts, may not have the capacity or funding to meet demand — especially after handing over responsibility to the Commonwealth during the creation of the NDIS.

What’s Really Changing?

Current NDIS	Proposed Changes
Diagnosis-driven access	Needs-based (functional impairment)
Expanding coverage	Constrained growth
Federal responsibility dominant	Shared with states (“foundational supports”)
Flexible spending	Tighter definitions & controls

The Missing Piece: Fraud and Waste

While the scheme needs to be sustainable, many disability advocates argue that these reforms focus heavily on reducing participant numbers rather than addressing the fraud, waste, and provider exploitation that have contributed significantly to cost blowouts.

The risk is that people with genuine, high needs bear the brunt of the changes, while systemic inefficiencies remain largely untouched. Critics say this is less about fixing the scheme and more about shifting costs back to the states — without ensuring the states are equipped to take them on.