NDIS Overhaul Risks 'Material Harm' to Australians with Disabilities, Advisory Committee Warns

The national disability insurance scheme’s proposed overhaul will cause “material harm” to Australians with disabilities, undermine its original intentions and hand unprecedented power to the health minister, the federal government’s own reform advisory committee warns.

The Australian Human Rights Commission has also urged the government to slam the brakes on the potentially “regressive” changes to the NDIS, saying more consultation time was needed to avoid the “clear risk of adverse and unintended human rights impacts”.

The Albanese government is eager to move ahead with changes that are estimated to remove more than 200,000 people from the $50bn-a-year scheme by 2030 in a bid to secure its financial sustainability.

A Labor-led Senate inquiry is due to deliver its recommendations mid-June after three public hearings.

But alarm bells are ringing for a number of disability advocacy bodies, human rights groups and government watchdogs as the scale of the changes required to achieve that goal are realised.

In a submission to a parliamentary inquiry, the NDIS reform advisory committee, made up of disability representatives, admonished the changes, and encouraged the government to re-draft the bill in “genuine partnership with the disability community”.

The submission, authored by co-chairs, El Gibbs and Dougie Herd, added the savings could be achieved through focusing on provider integrity, fraud enforcement and pricing reform – rather than cutting support services for Australians with disabilities.

“The community has, repeatedly, asked for that change to be done with us, not to us. The community has not been listened to in the design of this bill,” it said.

“The bill in its current form does material harm to current and future participants. It misrepresents the founding intentions of the NDIS. It inverts the [2023 NDIS] review on which the government relies. It demolishes the federated joint venture and concentrates unprecedented power in the Commonwealth minister.

“It is, on the government’s own admission, retrogressive against the rights framework the NDIS Act exists to give effect to. And it has been progressed under a timetable that breaches Australia’s binding obligation to consult.”

The committee was established in 2025 to advise the federal NDIS minister and state and territory disability ministers about the real-world impacts of any changes to the scheme.

Some of the proposed changes will allow the NDIS minister, Mark Butler, to progressively reduce social participation budgets for participants by 50% and tweak the meaning of permanence to restrict NDIS access to participants who can first show they have exhausted “all appropriate” treatment options.

Key to reducing the scheme to about 600,000 participants by 2030 – the scheme supports about 770,000 people currently – will be the introduction of a standardised, evidence-based tool to determine a participant’s “substantially reduced functional capacity”.

Butler has described the plans as “hard decisions” but ultimately “unavoidable and urgent”.

The Australian Human Rights Commission said a two-week consultation period was “wholly inadequate” and that more time was needed to understand the “significant implications for people’s rights, lives and livelihoods”.

Its submission, written by the disability discrimination commissioner, Rosemary Kayess, concluded the NDIS was set up as a “human rights-based scheme, ensuring that people with disability have access to individualised supports that enable dignity, autonomy, independence and participation in the community”.

“The proposed reforms raise significant concerns about the extent to which this framework is being preserved,” Kayess said.

Advocacy groups in rural and remote areas, such as those supporting Northern Territory communities, are also worried about swiftly passing new laws without considering the impact on some of the country’s most vulnerable.

The submission from Disability Advocacy Service Inc, Integrated Disability Action Inc and Darwin Community Legal Service warned that Aboriginal and Torres Strait Islander participants in regions with limited or no access to mainstream support services would feel the brunt of the impacts.

“In the Northern Territory, the consequences of getting this balance wrong are not administrative or procedural,” they wrote.

“They are direct and foreseeable impacts on housing stability, health, safety, community participation, and, in some cases, life itself.

“Reform must not proceed on the assumption that unsupported participants will be absorbed by systems that do not yet exist at scale.”

The bill will also introduce the ability for the NDIS to automate certain administrative decisions.

The commonwealth ombudsman said improving the efficiency of the NDIS was a “worthwhile goal” but said it needed to be balanced with integrity.

“As the robodebt scheme illustrated, efficiency gains are fundamentally flawed if they come at the cost of integrity – resulting in negative impacts on the people the system is supposed to assist and a significant waste of taxpayer resources spent unravelling a system found to be unfair or unlawful,” the submission said.