Calls for significant reform to the National Disability Insurance Scheme (NDIS) are intensifying, with Senator Pauline Hanson advocating for a means test to be implemented by the Albanese government.

High-ranking officials from Labor, the crossbench, and the Coalition are expressing concern over the scheme’s future viability, as expenditures continue to escalate more rapidly than nearly any other area of Commonwealth funding.

Currently, the NDIS does not factor in an individual’s income or assets, such as property or investments, when assessing eligibility.

Senator Hanson is adamant that this policy needs to be revised.

“The NDIS is spiraling out of control, and the system is unsustainable unless we take measures to curb it,” she stated to Newscorp on Monday.

“There are individuals benefiting from the scheme who are financially comfortable… it’s crucial for someone to address this issue,” she added.

Her comments come as NDIS reform is expected to feature prominently in Treasurer Jim Chalmers’ fifth budget next month, with Treasury examining ways to slow growth and lock in savings. 

Faced with ballooning costs, the government is considering slashing NDIS growth from around 8 per cent to 5 per cent, as cost-of-living pain, global uncertainty and rising debt repayments bite. 

Senator Pauline Hanson has pushed for the NDIS to be means tested

Anthony Albanese (pictured) is considering NDIS savings in the upcoming federal budget 

Health Minister Mark Butler and NDIS Minister Jenny McAllister declined to comment when asked about means testing.

NDIS spending is now the Commonwealth’s second-fastest growing expense at about $50 billion every year, behind only interest on government debt.

Without further reform, annual costs are forecast to approach $100 billion within a decade, fuelling concerns within Labor that the scheme risks losing public support unless integrity issues are addressed.

In 2024, NDIS head of fraud and integrity John Dardo revealed about $2 billion is being wrongfully spent on everything from luxury holidays to mortgages and cars.

‘Examples just in the last week include a $20,000 holiday, a $10,000 holiday,’ he said. ‘Fortunately, when we approached them, they agreed to repay the money. But we have other participants who cease contact and refuse to engage.’

In one case, a man on a $480,000 annual plan was receiving $40,000 a month, double what he needed for medical care, and using the rest to pay off his mortgage.

Mr Dardo said he had even spoken to a participant who met their provider at an ATM to withdraw cash for drugs.

‘The provider would withdraw cash and hand it over so she could source illicit substances,’ he said.

The Albanese government is under pressure to clamp down on rorting across the NDIS (file) 

‘We’re not talking dozens or hundreds of participants — we’re talking significantly higher. These are providers putting people in harm’s way just to commoditise them and their plans.’

He also revealed organised crime groups had infiltrated the scheme by setting up dodgy provider businesses or posing as support coordinators.

‘These are not genuine providers, these are people who should not be in business, these are not people that should be allowed near government schemes of any kind and they’re in partnership in some cases with health professionals, who we’ve already taken down or are in the process of taking down.’

He said there is little the NDIS can do to keep rogue operators out.

‘We have moved participants in some cases from those providers only to have the providers knocking back on their door to actually solicit them.

‘They’re coming through as a different provider, as a different entity or they’re buying different providers or they’re establishing other providers or they’re coming back as an unregistered provider, so there’s a whole series of patterns.’

According to Mr Dardo, the sheer scale of taxpayer funding has turned the scheme into a magnet for corruption.

‘The scheme was designed with the best intent … What nobody planned on was that such a big pot of money would attract behaviours and risks that weren’t there before,’ he said.

A video by Drew Pavlou (left) and  Pete Zogoulas (right) has caught Canberra’s attention

‘It should be easier for the money to flow, but for good things. That requires reform. There are weaknesses in the system that need to be fixed. We cannot prosecute or audit our way out of this.’

Public scrutiny of the NDIS has intensified this year after activist Drew Pavlou went undercover and exposed alleged rorting by some providers in a viral video viewed by millions. 

‘The government wants to reduce NDIS budget growth from 8 per cent per year to around 5 per cent per year,’ Pavlou said.

‘Instead, they should simply nationalise the NDIS market.

‘The NDIS should be restricted to instances of severe disability, where people cannot otherwise function in society,’ he said.

He proposed capping NDIS funding by aligning it with Medicare spending, currently about $29 billion a year.

‘If you do that, you automatically save roughly $25 billion a year, every year, for the next 30 years,’ Pavlou said. 

Earlier this month, the government moved to strengthen enforcement, introducing tougher laws aimed at cracking down on fraud and restoring confidence in the scheme.

The reforms create new criminal offences, including breaching banning orders or providing unregistered services, each carrying penalties of up to five years in jail. Fines for serious misconduct have also been significantly increased.

The changes expand the powers of the NDIS Quality and Safeguards Commission, boost protections for whistleblowers, and modernise the claims process through mandatory electronic forms and stricter evidence checks.

‘These new laws mean that fraudsters are on notice,’ McAllister said.

‘Those who think they can take advantage of the disability community, and the NDIS, will be held to account.’