'Thriving Kids' and a fresh growth target: The new NDIS announcements explained

Australia Broadcast Center

20 hours ago

The National Disability Insurance Scheme (NDIS) has transformed the lives of its participants, but hard questions about the scheme's future are again being asked.
On Wednesday, Disability and NDIS Minister Mark Butler made several announcements on the future of the $48 billion scheme, aimed at moderating its future growth.
It follows figures that again show children, particularly those with autism, continue to make up a large proportion of participants, and reminders the scheme is on track to outstrip the defence budget.
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Mr Butler told the National Press Club the federal government would tip $2 billion into "Thriving Kids", a new program outside the NDIS aimed at supporting children with mild to moderate developmental delays and autism.
He said he wanted the program to be up and running by July next year.
"Diverting this group of kids over time from the NDIS is an important element of making the scheme sustainable and returning it to its original intent. Access and eligibility changes will be made to do that once [it] is fully rolled out," the minister said.
"Children who are enrolled in the NDIS now or become enrolled before that time will remain on the scheme subject to its usual arrangements."
Mr Butler said Thriving Kids was a "refocusing", not a complete replacement, of what the 2023 NDIS Review called "foundational supports" — a tier of services outside the scheme for those with less profound disabilities, run by the states in settings such as schools, childcare and health services.
Instead, it appears the program would be one significant part of those foundational supports. It is also unclear at this stage how it will be delivered.
Mr Butler also flagged further reforms to the scheme that would be implemented once the government hits its 8 per cent per annum growth target.
He said a new growth target could be set at around 5 or 6 per cent — closer to the forecasts for aged care and Medicare. The states and territories would need to agree to any new target.
Mr Butler suggested the new reforms could include further fraud crackdowns, "pricing discipline" and a "more rigorous evidence base for supports".
Those reforms would involve "the deepest collaboration with the disability community", he added.
Mr Butler said the government would also look at creating a new Medicare item for bulk-billed three-year-old health checks to pick up any developmental concerns.
According to the latest NDIS quarterly report, approximately 11 per cent of all kids between five to seven years of age were on the scheme at the end of June this year — 13.7 per cent of boys and 6.4 per cent of girls.
Of the scheme's roughly 740,000 participants, about 23 per cent were younger than nine and 40 per cent had a primary diagnosis of autism, the report showed.
There has always been a larger number of kids on the scheme compared to other age brackets.
"Overall, the rate of participation in the NDIS rises steeply from birth, peaking at approximately 12 per cent at age six. The rate then declines steadily to around 1 per cent in the age band 35 to 40, before rising gradually to 2.5 per cent by age 65," the quarterly report said.
That's due to the early intervention pathway for kids under nine, which aims to lessen the impact of their disability by providing support at the earliest possible stage.
The big issue for the scheme's financial sustainability, though, is that many kids have stayed on the NDIS after their intervention period ends.
While the NDIS was originally designed for Australians with profound and lifelong disability, the lack of options elsewhere — especially for kids — has seen the scheme grow faster than expected.
When the NDIS was introduced, state and territory services shut down, leaving parents today with little other options if they want to get support for their child.
Mr Butler said some kids were not getting the best support and others were being "overserviced".
The vast majority of all people with disability are not on the NDIS — the scheme's 740,000 overall participants make up about 14 per cent of the 5.5 million estimated people with disability in Australia.
The NDIS is now more expensive than Medicare and is set to overtake spending on defence next year. March's budget showed it was projected to surpass $64 billion by 2029.
The Albanese government has made various changes to the scheme as it chased its 8 per cent annual growth target.
Mr Butler told the Press Club that even under that scenario, the NDIS would still hit $105 billion per year — and increase its share of GDP by 0.5 per cent — over the coming decade.
The scheme was growing at 10.8 per cent in June this year, according to the most recent quarterly report, compared to about 20 per cent when the first Albanese government was elected in 2022.
Mr Butler said reducing the scheme's growth was "not just a question of budget sustainability", but also one of social licence.
Until now, foundational supports — that tier of supports outside the scheme for those with less profound disabilities — were seen as the single biggest piece of work that would help to make the scheme sustainable in the future.
States and territories agreed to split the costs of foundational supports in 2023, but negotiations over a funding deal have stalled.
That uncertainty has caused concern in the disability community, with participants and their families worried about the future of their supports.
Participants have also been contacting the ABC in recent months, reporting sudden cuts or reviews of plans.