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Dramatic move to slash cost of NDIS
NDIA announces sudden move to raically reduce therapy payments; says it won't pay 'NDIS tax'
Nic Stuart
June 12, 2025
The abilityNEWS Daily
The Big Story
Waiting . . . (Image courtesy The Australian)
Tightening the Belt: NDIA tries to find value as it dramatically cuts therapy payments
The NDIS remains a lifeline for people with disability. Increasingly, it’s also a lightning rod for budget restraint. From July 1, the NDIA will impose new pricing reforms. The aim is to bring the cost of NDIS-funded therapy into line with what Medicare and private health insurers pay.
The justification? According to the NDIA, people with disability have been charged a “premium”—sometimes up to 68% more—for the same services.
On the face of it, the changes make sense. They promise fiscal discipline and fairness. Backed by the Independent Pricing Committee—established last year to bring rigour to the system—the review draws on more than ten million therapy transactions. It’s data-driven. Thorough. Reassuring.
But scratch beneath the spreadsheet and it gets messy.
The government says the move is about curbing rorts. Critics agree—at least, up to a point. A 3.95% pay rise for support workers also kicks in, reflecting award changes. So far, so good.
The trouble comes next. In regional areas, or where markets are thin, prices were deliberately inflated to attract providers. Cut them back, and services may vanish.
The IPC talks about “value-based pricing” and “blended payments”—concepts borrowed from health systems overseas. But disability supports are different. Therapy isn’t a commodity. It depends on individual needs, local conditions, and practitioner skill.
Efficiency matters. But service quality matters more—especially for those with complex needs.
The point is, this isn’t a real market. It never was. That’s why the government is stepping in.
The Briefing
The Wrap
NDIS to slash fees for key health workers to curb costs
By SMH
Key National Disability Insurance Scheme health workers such as physiotherapists, dietitians and podiatrists will have their payments slashed in the new financial year as the agency that runs the $48.8 billion scheme seeks to bring down its costs. The NDIA says a review of more than 10 million transactions found that many pricing limits for NDIS therapies were out of step with broader market rates. In some cases, NDIS providers were charging fees that were 68 per cent higher.
NDIS delays threaten $9b budget blowout
By AFR
The March budget factored in $19 billion of savings related to the NDIS over the next four financial years, $8.8 billion of which now look uncertain. The savings hinge on the government overhauling how participant budgets are set and the states striking a funding deal with their federal counterparts within months.
Quiz: So what were the initial projections for the cost of the NDIS?
Answer: The National Disability Insurance Scheme (NDIS) was initially projected to cost less than $20 billion and cover around 411,000 people. However, the actual cost has significantly exceeded these projections, as has the number of people covered. This year it is expected the cost will be $44.3 billion in the 2023–24 financial year (Budget paper no. 1, p. 211). This is higher than the $41.9 billion estimate for the same period in the 2023–24 Budget.
The Diary
