Australians with a disability would first need to exhaust “all appropriate” treatment options for their impairment to be eligible for the national disability insurance scheme under strict entry criteria to help curb the program’s soaring costs.
The proposed test is expected to start in 2028 and existing participants could be forced off the scheme if they do not meet the requirement.
The change is part of sweeping laws to overhaul the $50bn-a-year NDIS which are set to be introduced to parliament on Thursday.
The health minister, Mark Butler, last month outlined major changes to contain the scheme’s costs, including new eligibility rules, standardised assessments of participants and mandatory registration for more categories of providers.
The measures – to be rolled out progressively over the next two years – are forecast to save the federal budget about $36.2bn through to 2030 and reduce participant numbers to 600,000, down from a projected 900,000 at the end of the decade.
There are about 760,000 participants on the scheme.
Opposition and crossbench MPs have been briefed on the legislation by the government, which wants it passed as soon as possible to start implementing the changes.
Sign up for the Breaking News Australia emailBriefing documents seen by Guardian Australia reveal the bill will clarify the definition of “permanence” for disability, which will act as a gateway test for access to the scheme.
Under the definition, entry to the NDIS would only be granted if “all appropriate treatment that can remedy or alleviate an impairment has been undertaken; no other treatment is likely to materially improve the impact of the impairment, and the impairment is likely to be lifelong.”
Changes to toughen up the criteria were recommended in the 2023 review of the NDIS.
A government spokesperson confirmed the definition in a statement to Guardian Australia.
“The NDIS was designed for people with permanent and significant disability. If a person can access treatment that will treat or alleviate the impact of an impairment, the NDIS is not the appropriate service system,” the spokesperson said.
“The NDIS was never intended to replace health, rehabilitation and treatment services which play a critical role in preventing lifelong disability.”
The Greens’ disability spokesperson, Jordon Steele-John, said the proposal was “extraordinarily alarming”.
“If that is what they [the government] do, people would have to spend even more time than they currently do, running around, getting treatments that may be ineffective or inappropriate,” he said.
“It will be very costly even to be able to even stand a chance of accessing the NDIS.”
The new test would start from 1 January 2028, according to the briefing documents.
After that, as existing participants are progressively reassessed, those who do not meet the requirement would be pushed off the scheme.
Steele-John said the changes to slow the scheme’s growth were “cruel”, confirming the Greens would oppose them in parliament.
That means Labor will need to rely on support from the opposition, whose leader, Angus Taylor, has signalled he is prepared to work with the government.
However the Coalition is unlikely to wave the changes through quickly, with the shadow NDIS minister, Melissa McIntosh, confirming the opposition would support an inquiry into the legislation.
“It’s important that due diligence is done, particularly as we have been receiving an overwhelming amount of feedback that the government has once again neglected to consult with the Australians directly affected by this legislation,” she said.
“People with a disability are feeling ambushed by the Government.”
Speaking in parliament, Butler said the NDIS was a “truly cherished institution” but was costing too much.
“We simply can’t go on like this. We can’t afford for the NDIS to continue to fail,” he said.
Although the eligibility changes will likely be the single most impactful lever for the government to reduce the NDIS’s costs, there are other changes also planned.
Participants and providers will need to retain records relating to claims by the end of May, and supported independent living providers will, from June, be required to register with the NDIS watchdog, the NDIS Quality and Safety Commission.
The first of the foundational support programs, Thriving Kids, is scheduled to begin rolling out from October. It will offer support services for children aged nine and under with autism and developmental delays.
A reduction of the social and community participation budgets for participants will also begin from October.
The major changes to how the NDIS works are scheduled to start in 2027.
From February, a new criteria to determine what supports the NDIS can offer will be introduced and unused money from budgets will no longer be rolled over, according to the health department’s timeline released after the budget.
In the same year, a new framework for how NDIS plans are reassessed and renewed will be introduced and the basic registration information will begin with a view to include most providers.
The budget papers indicate the government expects the changes will recoup $36.2bn over the next four years, with payments to participants plateauing at between $53bn and $54bn a year until 2030.
The average growth rate would be reduced to an average of 3.6% over the four years after peaking at 22.9% in 2022-23 during Labor’s first year in government.
The agency in charge of running the NDIS, the National Disability Insurance Agency, will also reduce its headcount by nearly 700 roles in the upcoming financial year, according to the budget.
