Mark Butler, the minister for Disability and the National Disability Insurance Scheme (NDIS), today announced a new plan^[1] to “secure the future” of the NDIS.

Central to this plan is that children under nine with mild to moderate developmental delays or autism will transition from the NDIS to a new foundational support program called Thriving Kids.

Speaking at the National Press Club, Butler argued the NDIS was never intended to serve this age group and it’s currently falling short of meeting their needs.

Thriving Kids will be jointly funded by the federal government and states and territories, with an initial A$2 billion committed from the Commonwealth.

The program is set to launch in July 2026 and roll out over the following 12 months. From mid-2027, children in this group will no longer enter the NDIS, but instead receive support through Thriving Kids.

So what’s behind this change, and is it a good idea?

Sustainability struggles

Since returning to office in 2022, the Labor government has introduced several reforms^[2] to the NDIS which, over time, has ballooned in cost.

According to Butler, much more work is needed to get it back on track. But he highlighted two challenges in particular:

1. returning the scheme to its original purpose of supporting those with significant and permanent care and support needs

2. ensuring the scheme is sustainable from a budget perspective.

The original 2011 estimates for the scheme were that the NDIS would cover 411,000 participants^[3] and cost $13.6 billion per year. Today there are more than 740,000 participants, and it’s forecast^[4] to cost $64 billion by 2029.

The government has set a target^[5] to reduce annual growth of the scheme from 22%^[6] a year to 8%^[7] by next year. However Butler described this as only an interim measure, noting growth needed to be further restricted.

Children aged under 15 years are over-represented in the scheme, making up just under half^[8] of NDIS participants. Half of new entrants are under nine. Across the country, one in ten six-year-olds is on the NDIS.

Butler emphasised families were not to blame. Rather, the issue is the lack of alternative support systems. The NDIS Review^[9] highlighted this gap and recommended the development of foundational supports: services for people with disability that sit outside the NDIS.

However negotiations between federal, state, and territory governments to establish foundational supports recently stalled^[10].

In establishing Thriving Kids, the minister argued children will be better served and there will be less budgetary pressure on the NDIS.

Is it a good idea?

There have been concerns for some time that the NDIS is not working well^[11] for some young children. Best practice^[12] in early childhood intervention and care generally suggests children should be integrated into mainstream settings where they live, play and learn.

Parents and caregivers of young children on the NDIS receive individual funding that they use to pay for therapies and other supports which are largely delivered on a one-to-one basis outside these settings.

For families, it can be confusing and difficult^[13] to choose between different NDIS supports and providers to work out what will be best for their child.

Rather than providing individualised funding to families, Thriving Kids will leverage existing systems including:

• infant or child and maternal systems (community-based nurses who see children at health and developmental check-ups from birth to 3.5 years)
• GPs
• early learning centres
• community centres
• schools.

These are services most families are already engaged with. The minister says this should result in a more integrated and universal offering to all children – not just children with disability.

New Medicare items will be introduced so families are able to continue to access allied health services such as occupational therapy, speech pathology and psychosocial therapy. We don’t know whether families will have to contribute towards the cost of these services.

Whether Thriving Kids delivers all that is promised will depend on the design of the program and whether it can be effectively implemented, particularly within a short time frame.

Although the government has said access processes to the NDIS will not change until 2027, a number of families over the past six months have found their child has been reassessed and determined ineligible^[14] for the scheme.

Yet there are few other support options for these families. An important step will be making sure that while Thriving Kids is being established, children and families don’t miss out on support.

There could be some challenges

Over the past year, relations between state/territory and federal governments have become more fractious^[15].

Thriving Kids will be a national program led by the federal government, but will require close work with other levels of government if it’s to be successful.

States and territories are responsible for many of the services that Thriving Kids will leverage. This program will also need good understanding of local areas to make sure it’s appropriate and doesn’t lead to any gaps in services.

Some experts have argued that we have seen diagnostic drift^[16] in relation to autism in recent years, with some children being diagnosed as having moderate autism when previously it would have been diagnosed as mild.

Creating a system where some children are eligible for the NDIS (such as those with severe autism) and others for Thriving Kids (those with mild to moderate developmental delays or autism) could accentuate this. Some health professionals or families may seek a diagnosis that gives them access to better support.

Costs and pricing also need to be harmonised across systems, so families are not incentivised to access services through one system over the other. Services and support funded through Thriving Kids should not incur out-of-pocket costs and payments to providers should not differ between the systems.

Another challenge will be to ensure those groups who are most marginalised and disadvantaged under the current NDIS – for example culturally and linguistically diverse families or Aboriginal and Torres Strait Islander people – receive equitable benefits^[17] from the Thriving Kids program.

References

1. ^{^} a new plan (www.health.gov.au)
2. ^{^} several reforms (theconversation.com)
3. ^{^} cover 411,000 participants (theconversation.com)
4. ^{^} forecast (www.abc.net.au)
5. ^{^} has set a target (www.ndis.gov.au)
6. ^{^} 22% (www.health.gov.au)
7. ^{^} 8% (www.ndis.gov.au)
8. ^{^} just under half (www.health.gov.au)
9. ^{^} NDIS Review (www.ndisreview.gov.au)
10. ^{^} recently stalled (www.abc.net.au)
11. ^{^} not working well (grattan.edu.au)
12. ^{^} Best practice (healthy-trajectories.com.au)
13. ^{^} confusing and difficult (journals.lww.com)
14. ^{^} determined ineligible (theconversation.com)
15. ^{^} more fractious (theconversation.com)
16. ^{^} diagnostic drift (crawford.anu.edu.au)
17. ^{^} equitable benefits (theconversation.com)