The federal government has defended sweeping reforms to the National Disability Insurance Scheme (NDIS), warning the long-term future of the program is at risk without significant changes, as it moves to rein in costs projected to exceed $50 billion this year.

On Thursday, the government announced a major overhaul aimed at reducing participant numbers from 760,000 to 600,000 by 2030 and capping annual growth at 2 per cent, with expected savings of $15 billion. The reforms introduce stricter eligibility criteria based on functional capacity assessments, mandatory provider registration and new measures to curb plan inflation.

NDIS Minister Mark Butler said the changes were unavoidable, stressing that the future of the NDIS is really at stake acknowledging the scale of the overhaul.

He added that some participants currently on the scheme were not part of its original intent, often due to gaps in alternative support systems, with all participants set to undergo renewed eligibility assessments and an estimated 160,000 people expected to exit over time.

But while the government frames the overhaul as necessary to preserve the system, those working within it say the impact is already being felt.

Sophie Mallas. Photo: Supplied

Sophie Mallas, an occupational therapist based in Melbourne who specialises in NDIS support, aged care and functional engagement, told Neos Kosmos the changes are already being felt on the ground, and are likely to intensify.

Mallas works directly with NDIS participants of all ages, and helps them establish self-care routines, whilst also assessing their functional needs. Among other things, she recommends home modifications and supports to improve safety and independence. These interventions range from structural changes, such as installing ramps or modifying bathrooms, to smaller but critical adjustments like medication timers or automated appliances. She then prepares costed proposals to support funding applications.

However, she says securing approval has become increasingly difficult. She has she seen a vast amount of proposals fall through due to funding barriers.

“I’ll conduct a full assessment, engage a builder for a quote, submit everything but the majority are rejected. Many clients simply don’t have the means to fund these changes privately.”

She points to a recent case that highlights both the system’s rigidity and the persistence required to navigate it. The client, a child receiving palliative care for a degenerative condition, was initially denied funding for a necessary bathroom modification on the basis that she might not live long enough to benefit from it.

“I still get shivers thinking about it,” Mallas said. “I fought for two years to get that bathroom approved. The client kept beating the odds, and is stable, and now the bathroom is complete for her. But it took two years to secure the NDIS approval. I guess they’re not emotionally involved in the cases.”

In the wake of the latest reform announcement, Mallas says uncertainty is widespread.

“Everything is up in the air. We’re waiting to see how it plays out,” she said. “But from what’s been outlined, access is going to become more restrictive, it is going to be harder for people to get help. It won’t be enough to have a formal diagnosis. You’ll also need formal strong evidence of current functional capacities to qualify.”

The projected reduction of 160,000 participants has raised concerns about who will be most affected. While formal guidance is still evolving, Mallas notes that no one feels safe, when thousands of people will be losing their NDIS funding.

“From what I understand autism level one and two may be particularly at risk, along with those with psychosocial or mental health-related conditions. But that’s my opinion. At this stage, there’s a lot we don’t know.”

Effie Stagnitti.

Effie Stagnitti, a Melbourne-based NDIS Support Coordinator and director of Together Pathways, said the changes are creating growing uncertainty across the sector.

“My work in the NDIS is deeply personal,” Stangitti tells Neos Kosmos. “I grew up with two siblings with disabilities, and later my brother sustained a traumatic brain injury, so I’ve seen firsthand how complex and overwhelming the system can be for families. That’s what led me into this field.”

Now, I work closely with participants and their families helping them navigate the NDIS, understand their plans and access the right supports, particularly in more complex cases involving mental health, neurological conditions and high-risk situations. My focus is on providing hands-on, personalised support and strong advocacy to ensure people are actually getting what they need.

“From what I’m seeing, the changes are creating a lot of uncertainty for both participants and providers,” she highlighted adding that “While the goal is to improve the system, in reality many people are finding it harder to access supports and understand their plans.”

Stagnitti said participants, particularly those with complex needs, are increasingly worried.

“There’s a real concern around reduced choice and flexibility, especially for those with more complex needs,” she said.

“At the same time, providers are under more pressure with administration, which can take away from actual support time.”

She pointed to mental health cases as an area where gaps in the system are becoming more visible.

“I see this quite a lot, especially with mental health cases,” she said. “There are often delays with assessments and reports, and even once they’re submitted, people can be waiting a long time for decisions. During that time, they’re sometimes left without the support they need.”

Stagnitti warned that system fragmentation is compounding the issue.

“A big issue is that the systems don’t always talk to each other, which is really critical in mental health,” she said.

“I’ve seen situations where participants are in serious distress and expressing risk, but it’s not always picked up or escalated quickly within the NDIS system.”

She added that for vulnerable participants, even short gaps in support can have serious consequences.

“For people with mental health needs, gaps in support can make things worse very quickly.”

Despite concerns, Stagnitti acknowledged that reform is needed, but cautioned against unintended consequences.

“Overall, change is needed, but it’s important that it doesn’t make things harder for the people who rely on the NDIS every day,” she said.

At the same time, structural changes are being introduced for younger participants. Many children currently supported under the NDIS will transition to a new program, Thriving Kids, which is scheduled to begin rollout in October 2026 and be fully implemented by 1 January 2028. The program will focus on early intervention for children aged eight and under with developmental delays or autism, delivering support through mainstream settings such as schools and early learning environments rather than individualised NDIS plans.

Neos Kosmos has contacted a range of aged care, disability and childcare organisations, mental health professionals, individual providers and NDIS participants, with a more extensive report on the impact of the reforms to follow next week.