The federal government will pass reforms that it says will save the National Disability Insurance Scheme (NDIS) "from itself" by making it more sustainable and cracking down further on fraud.
The Coalition voted with Labor to pass the sweeping changes in the Senate this evening, which are intended to curb the structural bloat of a scheme that costs more than $50 billion annually.
The overhaul is expected to save an estimated $37.8 billion over the next four years alone.
Health Minister Mark Butler argued the scheme had become a "soft target for shonks, for fraudsters and for sharp practice".
Mr Butler said the 63 amendments, following engagement with the disability community, reflect a "government that is willing to listen".
"We said when we announced this plan in April that we would engage deeply with the disability community but also with other parliamentarians," he told reporters this afternoon.
NDIS Minister Jenny McAllister said the changes would "deliver a NDIS that is strong, safe and sustainable and has a strong social licence".
The changes include establishing an escalation pathway for high-risk participants.
Ms McAllister said it would ensure an individual requiring 24-hour continuous care could apply for a plan variation to have their needs met, protecting them from support cuts.
The legislation will strengthen anti-fraud measures, introducing new criminal and civil penalties for providers who offer or provide kickbacks.
It will also grant additional whistleblower protections and greater enforcement powers for the National Disability Insurance Agency (NDIA) to ensure swifter regulatory action against unsafe or unethical providers.
The health minister said the new eligibility system, which aims to reduce participants from roughly 760,000 to 600,000 by 2030, is not explicitly spelled out in the bill.
Under the proposal, standardised assessments of functional capacity would determine eligibility for the scheme rather than diagnosis alone.
Mr Butler reassured Australians that the new eligibility standards will be made clear well ahead of their introduction on first January 2028.
The Greens have expressed concern the changes will leave hundreds of thousands without support, arguing they represent the "end of the NDIS as it was promised".
"Labor and the Liberals have got together in a room and have decided to strip us of our rights regardless of our safety or dignity," Greens senator Jordan Steele-John said this afternoon.
Crossbenchers and disability advocates also insisted the changes have come "too far, too fast".
Mr Butler acknowledged there was still "substantial" work to do on foundational support systems for children over the age of eight and other adults who will be taken off the scheme as a result of changes.
He remained adamant that the Thriving Kids program was on track to meet its scheduled start of October 1, despite the Queensland state government's refusal to sign up to the scheme.
Asked whether he had used the $25 billion in public hospital funding to state and territories in exchange for supporting the NDIS reform as leverage, Mr Butler reminded them of their commitments.
"It's a question of honour, really, for states — they signed an agreement earlier this year that set up five years of very significant increases for our public hospital system, but a reaffirmation of the commitment they made in 2023 to work with the Commonwealth to get the NDIS back on track."
"The Queensland government needs to answer for its inability so far to live up to the agreement that the premier signed earlier this year," he added.
The government vowed to fast-track a fix to the unintended "widow tax" created by its changes to negative gearing in exchange for the Coalition's support.
It is part of a broader deal with the Coalition that will also create a pathway to pass Labor's gambling reforms and news media bargaining incentive.
