Updated ,first published
Children with mild to moderate development delays or autism account for almost 30 per cent of the National Disability Insurance Scheme’s participants but less than 7 per cent of its budget in a sign the government must make further significant changes to the scheme if it wants to curb its yearly growth.
Figures supplied to this masthead by the National Disability Insurance Agency reveal that about $3.1 billion in payments were made to 214,865 children with developmental delay and autism who have mild or moderate support needs in the 2024-25 financial year.
They included $1.8 billion in annual payments to 120,444 of those children aged eight or younger, and $1.3 billion for 94,421 children between nine and 14. This was from a total $46.3 billion payments made to 739,414 participants over the past 12 months.
With children under nine who need early intervention set to be diverted away from the NDIS and onto a new program called Thriving Kids – a system that has so far been allocated $4 billion over the next five years – the federal government will eventually save billions.
Rather than offering individual NDIS support packages that average $14,500 each year, Thriving Kids will be delivered in mainstream environments such as childcare centres, community centres and schools, and medical services under Medicare.
But with the annual cost of the NDIS set to surpass $100 billion in a decade and become one of the nation’s three biggest expenses on the scheme’s current growth trajectory, that reform alone will not have a significant budget impact.
The Albanese government must make additional changes if it wants to limit the scheme’s growth from its current 10.8 per cent rate to 8 per cent by July 2026, and 5 or 6 per cent by the end of the four-year forward estimates. The government has argued that the growing cost risks costing the scheme public support.
“Reining in the cost blowout in the NDIS … is a broader issue, much bigger than what’s happening with kids right now,” Health Minister Mark Butler said last week, in one of several interviews explaining his new growth target for the scheme.
Diverting more people from the NDIS, getting tougher on providers and making NDIS pricing more competitive will be part of those plans.
People with psychosocial disability – generally middle-aged adults who are severely disabled by chronic mental illness, such as psychotic disorders – are the next group the government will focus on in overdue reforms to Australia’s disability system.
State premiers and Prime Minister Anthony Albanese agreed to this at a national cabinet meeting in 2023, when they committed to split $10 billion that would service children with lower support needs and participants with severe mental illness outside the NDIS.
With $4 billion of that funding now directed towards the new Thriving Kids scheme, $6 billion remains for psychosocial supports. At the end of June, there were 65,272 people on the scheme with psychosocial disability, with average annual payments of $88,700 – about $6 billion of the program’s $46.3 billion expense.
Butler has flagged that the new psychosocial supports will be delivered after Thriving Kids gets under way in 2027.
But he said urgent improvements to discipline and integrity in the NDIS were the most essential actions to deliver cost savings.
“We need more of a crackdown on fraud and non-compliance. We started that over the last little while … Since we’ve started that work, we’ve had hundreds of investigations, many dozens of search warrants and prosecutions started as well. But we’ve got to do more on that,” he said.
“We have to register the providers … I think 15 out of every 16 NDIS service providers are unregistered. We don’t know who they are, what their qualifications are, what their background is.
“I want more pricing discipline in the NDIS, not ridiculous prices being charged that you don’t see in aged care, you don’t see in veterans care, you don’t see in health.”
Changes introduced last year under former NDIS minister Bill Shorten are also expected to have an impact; according to the latest NDIS financial sustainability report, they should reduce the scheme’s growth by $19.3 billion over the next four years.
Central to those changes is a new planning method for participants, which is due to start in stages from next month, and take about three years to complete. This will set guard rails around how plan budgets are spent, to stop people exceeding their budgets.
Opposition Leader Sussan Ley has flagged she will support Labor’s changes after the Coalition gave its backing to Shorten last year.
“But that isn’t a blank cheque for the government. And what I want to make clear is that we do want those families to be looked after. We don’t want them to fall through the cracks,” Ley said last week.
Cut through the noise of federal politics with news, views and expert analysis. Subscribers can sign up to our weekly Inside Politics newsletter.
Natassia Chrysanthos is Federal Political Correspondent. She has previously reported on immigration, health, social issues and the NDIS from Parliament House in Canberra.Connect via X or email.
