Could $2 billion redirected from the NDIS reach 230,000 extra people?

The federal government is reportedly exploring redirecting up to $2 billion from the NDIS to bolster support for a broader group of Australians with disability, potentially assisting as many as 230,000 additional people. If implemented, such a move would reshape the contours of disability support in this country. But who stands to gain, who might lose out – and what does it mean for the future of disability inclusion in Australia?

Why now? Pressure on NDIS finances

The NDIS has ballooned into a major component of Australia’s social welfare spending. For the 2025 financial year, the scheme is expected to cost around AU$48.5 billion, with projections shooting up to over $63 billion by 2028-29.

This rapid escalation has spurred concerns around sustainability. The scheme’s growth, particularly among new participants, is placing strain on the federal budget, prompting a push for reforms to reduce cost growth while widening the net of support beyond traditional NDIS participants.

Analysts argue that a reallocation of some NDIS funding, especially for categories currently consuming disproportionate resources, could go a long way. A comprehensive report by the Grattan Institute earlier in 2025 advocated exactly that: rebalancing NDIS spending to preserve the scheme’s long-term viability while expanding supports to those who aren’t covered now.

Who are the “extra” 230,000 people?

The proposed redirection would potentially allow the government to open up support to individuals who have previously fallen outside NDIS eligibility – such as people with less-severe disabilities, or those whose needs were deemed insufficient for NDIS entry.

Under existing proposals for a new tier of “foundational supports,” more people could access mainstream, community-based services, rather than intensive individualised NDIS packages.

This has drawn cautious optimism. For many people with moderate or episodic disabilities – or those whose needs are social, educational, or environmental rather than medical – access to mainstream services has long been limited. Redirected funds could help cover those gaps.

Trade-offs and risks: what might be lost

But funneling money away from the NDIS is not risk-free. The scheme was designed to support people with permanent and significant disabilities; moving money out risks diluting the quality or availability of support for existing participants.

Recent reforms have seen the introduction of stricter criteria, capped supports, and greater reliance on mainstream services as a gating strategy for NDIS inclusion.

There are critical worries that shifting funds could lead to a “postcode lottery” – where access to foundational supports heavily depends on where someone lives, which services are available locally, and how stretched community services already are. Previous analysis has shown that many people with disability already struggle to find consistent supports outside NDIS.

The vagueness around eligibility criteria, especially for those with less visible or fluctuating disabilities, could leave many in limbo, uncertain whether they qualify for “foundational supports.”

A re-think: from crisis financing to rights-based reform

If the $2 billion proposal is treated simply as a cost-saving device, it may entrench systemic inequities – prioritising those easiest to service rather than those most in need.

But if reform is approached with integrity, with proper funding, clear eligibility, accessibility guarantees, and robust oversight, it could mark a shift toward a more inclusive, multi-layered disability supports system. One that distinguishes between support for intense, lifelong disability and early intervention, social inclusion, and community-level assistance.

As the Grattan Institute argued, the key lies not in cutting but in rebalancing, clarifying who the NDIS is for, and building out mainstream systems for others.

What needs to happen

• The government must clearly define eligibility criteria for foundational supports, ensuring people with moderate, complex or episodic disabilities aren’t excluded by arbitrary thresholds.

• States and territories need to commit to adequately funded community supports, to avoid postcode-based disparities.

• People with disability, their families, and advocacy groups must be central in designing the new support tier. Real-world needs and lived experience must guide reform, not just budget metrics.

• Transparency and accountability must be core: funding levels, services offered, access standards, and evaluation mechanisms should all be publicly available.

Redirecting $2 billion from the NDIS to reach 230,000 more people could – if handled properly – expand access to support for many who now fall through the cracks. But without safeguards, inclusivity, and genuine commitment to equity, it risks hollowing out crucial supports for the very people the NDIS was built to help.

The stakes are too high for half-measures or budget-first reform. If Australia truly values disability inclusion, not just in rhetoric but in reality, this moment must be treated as an opportunity to build a smarter, fairer, rights-based support ecosystem.