Federal Budget 2026 and the NDIS
The 2026-27 Federal Budget was delivered on Tuesday 12 May 2026. The NDIS is the single biggest source of savings in this budget. Here is what was confirmed, what it means for participants, and what is still to come.
Budget delivered 12 May 2026, 7:30pm AEST · Last updated 12 May 2026
What the Budget Confirmed
The budget papers put hard numbers behind the reforms Minister Butler announced on 22 April. Here are the confirmed figures straight from Budget Paper No. 2 and Budget Paper No. 1.
$37.8 billion in savings over four years
The budget confirms that reforms will reduce NDIS spending growth by $37.8 billion between 2026-27 and 2029-30, compared to the NDIS Actuary's projections. This is not a cut to what is being spent today. The NDIS will still grow every year, just at a much slower rate.
From $53.8 billion to $56.2 billion by 2029-30
Total NDIS spending is $53.8 billion this year. By 2029-30 it will be $56.2 billion. The scheme is not being wound down, but spending growth is being slowed significantly. It dips slightly in the middle years as reforms take effect before resuming growth toward $56.2 billion in 2029-30.
$49.4 million to set up the commissioned panel
The government has allocated $49.4 million over four years to commission plan management and support coordination. The panel of approved plan managers takes effect from 1 October 2027, with a six-month transition starting in April 2027. Selection criteria have not been published yet.
$4 billion for Thriving Kids
The government is putting $2 billion towards a new program called Thriving Kids, with states and territories matching that to bring the total to $4 billion. It will support children aged eight and under who have developmental delay or autism with low to moderate support needs. These children will receive support through state services rather than the NDIS.
$821 million to fight fraud and expand registration
The budget includes $358.5 million for a new digital payments and enrolment system, $280.1 million to continue the Fraud Fusion Taskforce, and $182.6 million to expand mandatory provider registration. Multiple enforcement agencies including the AFP, ACIC and ASIC are receiving additional funding.
$6 billion for supports outside the NDIS
On top of Thriving Kids, the government has provisioned $3 billion over five years for Foundational Supports outside the NDIS, to be matched by the states. This will build up community-based disability supports for people who do not qualify for the NDIS or who lose access under the new eligibility rules.
Functional capacity assessments from January 2028
The budget confirms that changes to how people access the NDIS will not start until 1 January 2028. From that date, access will be based on standardised assessments of how your disability affects your daily life, rather than your diagnosis alone. A Technical Advisory Group is being set up to design the assessment tools.
$200 million for community organisations
The Inclusive Communities Fund will provide $200 million over three years to help community organisations run social, community and capacity building activities for NDIS participants. The funding is being held in reserve while the government works out the details with the disability community.
All figures sourced from Budget Paper No. 1 (Budget Strategy and Outlook) and Budget Paper No. 2 (Budget Measures), published 12 May 2026 on budget.gov.au.
NDIS Spending Year by Year
These are the official forward estimates from Budget Paper No. 1. The NDIS continues to be funded at over $55 billion per year, but spending growth has been slowed significantly compared to what was projected.
| Year | NDIS Spending |
|---|---|
| 2025-26 | $53.8 billion |
| 2026-27 | $56.1 billion |
| 2027-28 | $55.1 billion |
| 2028-29 | $55.6 billion |
| 2029-30 | $56.2 billion |
Source: Budget Paper No. 1, Table 6.9.2. Includes both Commonwealth and state contributions.
What We Were Watching For: The Scorecard
Before budget night, we listed eight things we would be checking in the budget papers. Here is what we found.
Forward estimates by year
Budget Paper No. 1 includes a full year-by-year table. NDIS spending goes from $53.8 billion in 2025-26 to $56.2 billion in 2029-30. See the table above for the full breakdown.
Plan management commissioning details
The budget confirms $49.4 million over four years for the NDIA to commission plan management, support coordination, and home and living supports for Supported Independent Living (SIL) participants. The October 2027 start date and April 2027 transition are from the April announcement but not restated in the budget papers. Selection criteria for the panel have not been published. The government says it will consult on the commissioning approach.
NDIA and Quality and Safeguards Commission funding
The NDIA receives $436 million in 2026-27 to continue supporting participants. The NDIS Quality and Safeguards Commission receives $182.6 million over four years for mandatory provider registration, plus $21.7 million for regulatory and compliance activities.
Cost of the new functional assessment system
The budget allocates $3.3 million to set up a Technical Advisory Group to design the assessment tools. The full cost of building and rolling out the functional assessment system is not yet in the budget. Assessments will not start until 1 January 2028.
Inclusive Communities Fund timing
The $200 million is confirmed, but the funding is being held in the Contingency Reserve while the government consults with the disability community on how it should work. No application process or timeline has been announced.
Digital payments system costs
$358.5 million over five years to develop and roll out a new enrolment and digital payment system. Part of the funding is held in the Contingency Reserve. This is the system all providers will need to use.
Social and community participation changes
Budget Paper No. 2 confirms that budgets for social, civic and community participation and capacity building daily activities will be reset. The budget also says unscheduled reassessments have been driving 20 per cent average increases in plan values and the criteria for reassessments will be tightened.
New measures not previously announced
The biggest new item is Thriving Kids at $4 billion (Commonwealth plus states). Foundational Supports is provisioned at $6 billion total. The Reinvesting in Health, Disability and Ageing Programs measure redirects $2.7 billion from existing programs into new or expanded services. These amounts are significantly larger than what was flagged before budget night.
Thriving Kids: What Parents Need to Know
Thriving Kids is a new $4 billion program that was not widely expected before budget night. If you have a child under eight with developmental delay or autism, this section is for you.
What is it?
Thriving Kids is a new national program for children aged eight and under who have developmental delay or autism with low to moderate support needs. The Commonwealth is putting in $2 billion over five years and states and territories will match that, bringing the total to $4 billion. Services will be delivered through state systems, not through the NDIS.
What does it include?
The budget sets aside $1.4 billion for states to deliver services directly. On top of that, it includes $126.1 million for early identification through a new Medicare-funded health check at age three, $120.9 million for a national phone line and autism helpline, $99.5 million for parent and carer skills programs, $85.5 million to expand the 1800MEDICARE phone service for families, and $60.8 million for workforce training including dedicated First Nations workforce funding.
Does this mean my child will leave the NDIS?
Not right away. Thriving Kids is for children with low to moderate support needs. Children with high support needs will stay in the NDIS. The program starts in 2026-27 and builds up over several years. If your child is currently on the NDIS with a plan in place, nothing changes immediately. The detail on how children might transition from one system to the other has not been published yet.
What should parents do now?
There is no action needed right now. Keep using your current NDIS plan as normal. Watch for updates from your state government about when Thriving Kids services will be available in your area. If your child has an upcoming plan review, attend it as usual. Your plan manager can help you understand what any changes might mean for your child's supports.
When Does Everything Happen?
These are the key dates confirmed in the budget papers and in Minister Butler's April announcement. Most changes are still months or years away.
| Date | What happens |
|---|---|
| 12 May 2026 | Budget delivered. Legislation to amend the NDIS Act expected to follow. |
| Mid 2026 | Legislation expected to be introduced and work through Parliament. Consultation on plan management commissioning begins. |
| 1 July 2026 | Mandatory provider registration expands to cover personal care, daily living and closed settings. Thriving Kids funding begins flowing to states. |
| 1 October 2026 | Social and community participation and capacity building budgets begin being adjusted. |
| 1 April 2027 | New Framework Plans begin replacing the current Core, Capacity Building and Capital structure. Six-month plan management transition period starts. |
| 1 October 2027 | Commissioned plan management panel goes live. You will choose your plan manager from a government-approved list. |
| 1 January 2028 | Functional capacity assessments begin for people seeking NDIS access. Existing participants start being reassessed. |
| 1 July 2028 | Commissioned support coordination begins. State contributions to NDIS capped at 8 per cent growth. |
Dates sourced from Budget Paper No. 2 and Minister Butler's 22 April 2026 Press Club address. Some dates are subject to the Bill passing Parliament.
What This Means for Plan Management
The budget has now put a dollar figure on the plan management changes. The government is spending $49.4 million over four years to set up and run a commissioned panel of approved plan management providers. From 1 October 2027, participants will choose their plan manager from this panel rather than from the open market.
The transition begins in April 2027 with a six-month preparation period. During this time, existing plan management arrangements continue as normal. After the panel goes live, participants whose current plan manager is not on the panel will be moved to one that is.
The government has not published the criteria for getting onto the panel. It has said it will consult on the commissioning approach. What we do know from the budget papers is that the reforms are focused on reducing fraud, improving service quality for participants, and raising the bar on the standards providers need to meet.
Key Dates for Plan Management
Four dates matter most if you are a plan-managed participant or if you run a plan management business.
Thriving Kids timing: The new program for children eight and under with autism or developmental delay starts flowing funding to states from 1 July 2026. The transition for existing NDIS participants in this age group is expected to be phased through 2027 to 2029, with each child typically moving to state services at their next plan review.
Where Dedicated Plan Management sits
Dedicated Plan Management has been built from the ground up to meet the standards the reforms are targeting:
- Registered NDIS provider #4050163721, with full Quality and Safeguards Commission oversight
- 5.0-star Google rating with verified participant reviews
- Provider invoices paid as fast as possible, every time
- Australian-owned, family-run, based in Brisbane
- Real account managers, not call centres. You speak to the same person every time.
- Transparent monthly budget statements, no hidden fees
The panel selection criteria have not been published yet. We are watching the consultation process closely and will keep our participants informed as details are released.
What Participants Should Do Right Now
Most of the changes do not start until late 2026 or 2027. Your current NDIS plan and plan management arrangements stay in place. There is no need to rush into any decisions. Here are four practical steps:
1. Check whether your plan manager is registered
From 1 October 2027, only plan managers on the government's commissioned panel will be available. Not every registered plan manager will necessarily make the panel. If your current plan manager is slow to pay invoices, hard to reach, or not transparent with your budget, the reforms are a good reason to consider switching. Our guide on changing your NDIS plan manager explains the process.
2. If you have a young child on the NDIS, watch for Thriving Kids updates
Children aged eight and under with low to moderate developmental delay or autism may eventually move from the NDIS to the new Thriving Kids program. This will not happen overnight. Watch for announcements from your state government about when services will be available in your area.
3. Attend your plan review as normal
If your plan review is coming up, attend it. The new framework plans do not start until April 2027 and eligibility reassessments do not start until January 2028. Your current plan will be reviewed under the existing rules.
4. Keep good records
With a new digital payments system being built and tighter audit rules coming, it pays to make sure your invoices, service agreements, and quote documentation are all filed and traceable. A good plan manager already handles this for you.
Frequently Asked Questions
How much is the government saving from the NDIS?
Will my NDIS plan be cut?
Most likely not straight away, your current plan keeps running as normal until your next reassessment.
The new planning rules start from 1 April 2027. If your plan renews before then, your reassessment happens under the current rules you're used to. If it renews after then, you'll move to the new planning model, where the way some supports are worked out is changing, mainly around community participation and skill-building activities.
Day-to-day supports like personal care, daily living help, accommodation and transport aren't being singled out for changes at this stage.
Either way, nothing changes overnight.
Will I lose access to the NDIS?
Your eligibility for the NDIS won't be reviewed under the new rules until 1 January 2028 at the earliest. That's separate from your regular plan review, which looks at your supports and budget.
From January 2028, access will be checked using standardised functional assessments rather than diagnosis alone. Anyone with a significant and ongoing reduction in their day-to-day function should continue to qualify.
A Technical Advisory Group is being set up first to design the assessment tools, so nothing happens until that's in place.
What is happening to plan management?
Is the plan management panel now law?
Should I switch plan managers now?
What is Thriving Kids?
Will the NDIS still grow?
What if my plan manager does not make the panel?
Where can I read the budget papers?
About this page
This information is based on Budget Paper No. 1 and Budget Paper No. 2 released by the Australian Government on 12 May 2026. Some measures still need to pass parliament and final details may change. This page is general information, not personal advice.
Last updated: 12 May 2026.
For the full breakdown of the April 2026 announcement that led to this budget, see our guide on the April 2026 NDIS reforms. For operational changes already starting in July, see NDIS changes from July 2026.
Want a Plan Manager Built for the New Standards?
Dedicated Plan Management is a registered NDIS provider committed to meeting the highest standards of service. If you are looking for a plan manager who is preparing for the new commissioned panel model, we would love to chat.