BREAKING: Major NDIS Reforms Announced — Mark Butler’s NDIS Reform Update

22 April 2026

Minister for Health and Disability Mark Butler has outlined the next phase of NDIS reform — and it signals significant change across the sector.

Below is a clear breakdown of what’s changing, and what it means for providers.

The Headline: The NDIS Is Being Reset

The message from the Minister was clear:

The NDIS must become more sustainable, better regulated, and more targeted.

This is not a minor adjustment — it’s a shift in how the Scheme will operate moving forward.

1. Participant Budgets Will Be Tightly Managed

One of the strongest messages from the speech was around cost control, particularly in social and community participation.

Minister Butler stated:

• Average budgets (currently ~$31,000) are expected to reduce to around $26,000 over the next two years
• Total spend has reached $12 billion annually, up from $4 billion five years ago
• Without intervention, this could reach $20 billion by the end of the decade

He described this as “runaway growth”, and stated:

“We will reset the total cost of social and community participation back to where it was last year and prevent any further runaway growth.”

He also noted:

“Without our changes, that figure will have been more like $33,000.”

What this signals: Budgets will be more controlled, and providers will face increased scrutiny on how funding is used.

2. Changes to NDIS Eligibility

The way people access the NDIS is changing.

The government will introduce standardised functional assessments, with eligibility based on functional capacity, not diagnosis.

This means:

• The current Access Lists will be removed
• Diagnosis alone will no longer determine eligibility

The Minister indicated participant numbers are expected to reduce from 760,000 to 600,000 by the end of the decade.

3. Provider Regulation Is Expanding Rapidly

The speech reinforced a strong focus on provider oversight and accountability — and a significant expansion of mandatory registration for high risk services, such as personal care, daily living supports and those provided in closed settings.

Minister Butler stated he expects around 90% of providers to be registered under the new regime, compared to the current estimated rate of just 6%.

This is a substantial shift in how the market operates.

The Minister also referred to the introduction of differentiated pricing between registered and unregistered providers.

While detail is still limited, the intent is clear:

• Registered providers will be prioritised
• Unregistered providers may face financial or market disadvantages

What this signals: Registration is not just becoming mandatory — it will directly impact how providers operate, compete, and are funded.

4. Digital Payments Will Be Introduced

All providers will be expected to enrol in a digital payment system.

This is designed to give the NDIA greater visibility over how funds are being used. Currently, the NDIA has visibility over evidence for only around 10% of claims, with the remaining 90% lacking direct oversight.

What this signals: Payment processes will become more transparent, with increased scrutiny on claims and service delivery.

5. Changes to Planning

The government will:

• End plan rollovers
• Stop unspent plan funds from being carried forward

What this signals: Participants will need to use funding within defined periods, and providers may see changes in how services are planned and delivered across plan cycles.

6. Commissioning Intermediaries and SIL

Intermediary services – including Support Coordination and Plan Management – will be commissioned from a list of “accountable, quality providers.”

The government also aims to reduce spending on these services by around 30%.

In addition, Supported Independent Living (SIL) is expected to be increasingly tied to more structured and accountable provider models, and there was reference to providers choosing from a ‘panel’ of SIL providers.

What this signals: There will be tighter control over who can deliver intermediary services, and increased expectations around quality, value, and accountability.

What This Means for Providers

Across all of these changes, a clear pattern is emerging:

• The bar is rising
• Oversight is increasing
• Expectations are becoming more consistent

What You Should Be Doing Now

• Review your systems — are they working in practice?
• Strengthen governance and oversight
• Prepare for registration and audit
• Ensure staff understand their roles and responsibilities

Because under these reforms:

It won’t be enough to say you’re compliant, you’ll need to prove it.

Final Word

This wasn’t just an update, it’s another signal that the NDIS is entering a phase of:

• Stronger regulation
• Clearer expectations
• Greater accountability

For providers, the takeaway is simple:

The environment is changing — and the expectations are rising with it.

Minister Butler’s speech

You can read Mark Butler’s full speech here – https://www.health.gov.au/ministers/the-hon-mark-butler-mp/media/minister-butler-speech-at-the-national-press-club-22-april-2026?language=en

You can watch the full speech here – https://www.youtube.com/watch?v=LvMfe5bdX_0