The Big Change in NDIS Funding
Starting from May 19, 2025, some NDIS participants, who have had a recent plan review and new plan, may no longer be allocated their full NDIS funding for spending across the entire NDIS plan period. Instead, the funding allocation may be distributed in instalments throughout their NDIS plan either monthly, quarterly, or semi-annually which may vary based on the type of support a participant is receiving for each individual plan. So, what does this mean for us? How will these changes impact participants in managing their NDIS plan ? Let’s dive in.
What’s Changing with the Structure of NDIS Funds?
Under the new system, instead of the full plan funding being allocated for flexible use across the plan duration, participant’s funds may be allocated in periodic instalments known as funding periods. These funds may be released at different timings depending on the support category, for example Core Supports or Capacity Building For Improved Daily Living. Funding periods might occur monthly, quarterly, or every six months, making it easier for participants to manage their funds throughout the plan period without worrying about running out of funds too quickly.
Why Is This Change Necessary?
Better Budget Management
In the past, funds were available for flexible spending across the full plan duration, which led many participants to overspend early in their plan, leaving them short of funds later on. By switching the funds being available in instalments, participants can better manage their budgets, ensuring they have enough to cover their needs throughout their NDIS plan .
Reduced Risk of Overspending
With funds released throughout the NDIS plan, participants can avoid the risk of overspending early, allowing for more consistent access to necessary services and support. If there are funds remaining from a funding period, the funds will roll over to the next funding period as long as it is within the same NDIS plan. A provider can claim for services delivered in a previous funding period, as long as the dates of the invoice fall within the plan.
What Are the Impacts of This Change?
With funds released throughout the NDIS plan, participants can avoid the risk of overspending early, allowing for more consistent access to necessary services and support. If there are funds remaining from a funding period, the funds will roll over to the next funding period as long as it is within the same NDIS plan. A provider can claim for services delivered in a previous funding period, as long as the dates of the invoice fall within the plan.
Pros:
Easier Budget Management with Adjustment of Supports: The release of funds in smaller chunks makes it easier to budget, adjust the supports as needed and track spending across each funding period. This may help to avoid the funds in the NDIS plan from running out early.
Cons:
For some participants, transitioning to a new system where the funds are released in funding periods may take some time to get used to. However, once they adapt, they’ll likely find it easier to manage their NDIS plan in a more structured way.
Adapting to the New Payment Structure
Adjusting to this new system may feel challenging for some, especially for those who are accustomed to flexible spending across the full plan period. However, once participants understand the new way of managing funds, they’ll likely realise the advantages. The key to a smooth transition is planning and tracking spending regularly.
To help with this transition, it’s important to start budgeting early and keep track of how funds are being spent each period. This way, participants can avoid any surprises and ensure their funding lasts throughout the year.
How to Handle the Change Effectively?
Start with Budgeting
The first step is to plan how you’ll allocate the funds for each support category. Know exactly how much you can spend each month, quarter, or semi-annually depending on the breakdown of your funding periods of your NDIS plan. Planning ahead will give you control over your NDIS budget.
Track Your Spending
Regularly checking the utilisation of your NDIS plan is key. Keep track of what you’ve spent and how much is left for the next period to avoid running out of funds prematurely.
Adjust as Needed
If you notice you’re spending too much early in the period, you can adjust your support to stay within budget helping to ensure continuity of support and avoid potential disruptions due to running out of funds.
Conclusion: Why This Change Matters
Switching from lump-sum funds released at once to periodic instalments released by funding periods is a big shift, but it brings significant benefits, especially when it comes to managing your funds. With the right planning and tracking, participants will find it easier to budget and have access to consistent support throughout the NDIS plan period. While it may take a bit of time to adjust, the improved ability to manage and budget your NDIS funding may over significant long term benefits.
You can reach out to us either via a phone call at 1300 770 986 or email us at contact@aspect.ndis.com.au to get a better understanding on the NDIS funding periods.
