Questions are intensifying regarding the upcoming changes to the National Disability Insurance Scheme (NDIS) and how these modifications might affect funding for current participants.

In a bid to curb annual expenditures exceeding $50 billion, the federal government plans to revamp the NDIS by tightening eligibility criteria, addressing provider fraud, and scaling back financial support for certain programs.

About 160,000 Australians are expected to lose their NDIS access by the end of the decade, as the government aims to limit the number of participants to 600,000.

Prime Minister Anthony Albanese stated on Thursday that the adjustments are intended to restore the NDIS to its “original purpose,” preventing the system from becoming “unsustainable” and maintaining public confidence.

The Coalition has expressed openness to supporting significant reforms to enhance the scheme’s sustainability. However, Greens Senator Jordon Steele-John has criticized the move as a “betrayal,” highlighting the prioritization of defense spending over disability support.

The announcement has raised concerns among Australians and advocates, particularly regarding which participants might lose access as their plans are reassessed using a new method.

How will ‘functional capacity’ assessments work?

The new reforms will see all participants reassessed, with a new standardised, evidence-based tool — expected to be up and running by January 2028 — to determine eligibility.

NDIS Minister Mark Butler said a “diagnosis gateway” had funnelled people onto the scheme that “was never designed for them”.

He wants the scheme reset and returned to its roots, shifting eligibility from diagnosis to a basis on “a significant reduction in a person’s functional capacity that impacts their day-to-day living”.

Dr Georgia Van Toorn, a senior lecturer in the School of Social Sciences at the University of New South Wales, noted functional capacity was part of existing processes to access the NDIS.

She explained “functional capacity” as “what you’re able to do physically in the context of your life”. It examines whether a person’s disability prevents them from doing things like showering or looking after their home independently.

“So people will provide doctors, reports, letters and assessments by their health practitioners and therapists, as evidence that their disability impacts their functional capacity,” Van Toorn told SBS News.

During this process, evidence of a participant’s disability will be gathered, with a diagnosis of their primary disability used to then apply for a scheme.

Van Toorn understands early indications of the new process as a shift from relying on a diagnostic category to a standardised assessment, perhaps using a rule-based algorithm.

As a specialist in automated decision-making in disability and welfare systems, she said a common issue with algorithmic tools is a failure to recognise very rare conditions or how multiple disabilities interact to affect the experience of individuals living with several disabilities.

“I’m really worried about the impact of this change on people’s access to support,” she said.

While acknowledging the substantial growth of the scheme, with costs surpassing $50 billion in 2024-25, she said it remains “quite hard to access NDIS funds as an adult”.

Van Toorn said diagnoses will remain part of the process, as they are often used as evidence to prove both reduced functional capacity and the permanence of impairment.

“I don’t think we’re going to move away from diagnosis completely, because the actual language of impairment is baked into the legislation itself,” she said.

What we know about the new tool as concerns emerge

A 2023 review of the scheme — which made 26 recommendations — proposed a plan to make it “easier and fairer” to apply for the NDIS.

It outlined that access would be based on “the impact” of your disability, rather than “medical diagnosis alone”, echoing Butler’s words, and foreshadowing an approach where the NDIS would fund the bill for any in-person assessments required.

Van Toorn said assessments could be completed by practitioners from the National Disability Insurance Agency (NDIA), which could address concerns around out-of-pocket costs.

“I think we’re moving towards a sort of more tightly regulated government system where the government is more of a gatekeeper, as opposed to people’s own treating doctors,” Van Toorn said.

Many questions remain about the newly announced method; what is the research around the tool’s effectiveness, who will conduct assessments, and how qualified are they, as well as the time and financial pressure of reassessing all 760,000 people on the scheme?

Van Toorn said the NDIS needs to stay true to its founding principle in 2013, which grants participants authority over their own support needs and disability.

The major reset prompted a dozen disability advocate groups — including Physical Disability Australia, First Peoples Disability Network Australia and Community Mental Health Australia — to issue a joint statement on Thursday, calling for clarity around the changes and lived experience participation in formulating the tool.

“Any decisions that determine who gets support and who doesn’t must be built with the people most affected,” the statement said.

“Co-design and genuine engagement with the disability community — people with disability, their families, carers and advocates — is not a formality, it is the only way this can work.”