Controversial NDIS bill passes Senate with ‘substantial’ amendments as Labor and Coalition strike deal

Mark Butler has said some of the NDIS bill amendments are ‘relatively technical’ while others are ‘relatively substantial’ Photograph: Lukas Coch/AAP

The government’s controversial NDIS bill will pass after “substantial” amendments were agreed to in a deal between Labor and the Coalition, with some of the changes attracting heavy criticism from the Greens, the ACT senator David Pocock and the disability community.

The Albanese government’s national disability insurance scheme bill is designed to dramatically curb the growth of the $50bn-a-year scheme by first reducing budgets and then the number of people who can access it from 2028. More than 240,000 participants are expected to be shifted off the NDIS in the four years after new eligibility rules are introduced.

A total of 63 government amendments across both houses were introduced as part of backroom deals to pass the bill in the upper house on Tuesday night, the NDIS ministers, Mark Butler and Jenny McAllister, revealed.

“This is responsible reform that protects the integrity of the scheme while keeping people with disability at the centre of the NDIS,” Butler said.

The bill passed the Senate at 8pm on Tuesday with the Coalition’s support and will return to the lower house on Wednesday for a final vote before it becomes law.

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Among the amendments is a tweak to allow vulnerable participants whose budget is impacted by a new ministerial power – which allows the minister to bluntly slash funding from certain categories across all participants by up to 99% – to apply for more funding through a plan variation.

“We do recognise that there is a need to safeguard against risk to participate in health and safety, particularly for that group of people who require support 24 hours a day,” McAllister said.

“And so we are establishing a new plan variation pathway for people who have high support needs. This is intended to address participants who require continuous care over a 24-hour period. These participants will be able to apply for a plan variation within 90 days of a support determination applying to them.”

The ministerial power to swiftly reduce funding for support categories across all participants has been heavily criticised by both the Greens and ACT senator David Pocock, as well as the disability community.

In a Tuesday evening debate, Pocock welcomed the government amendments, which he said improved the bill, but said the broad ministerial powers to cut social and participation budgets in half from October remained the biggest “red line” for him.

“While the bill is improved, I still can’t support the bill,” he said after the bill passed the Senate.

“The indiscriminate cuts to social and community particiation funding will cause harm and the unprecedented automated decision making powers that are granted to the NDIA make this bill hard to vote for in its entirety.”

Greens senator Jordon Steele-John said the changes would impact people with disabilities who require support workers to go into the community.

“This government, in this bill, will be cutting the supports currently available, currently funded, to enable a disabled person to go outside, maybe once or twice a week,” he said.

“The ripple effects of this will be terrible. The stress that it will create is beyond imagining.”

The government estimates the $52bn-a-year scheme will have more than doubled in cost in a decade’s time without intervention. The changes within the bill are expected to instead improve the federal budget’s bottom line by $37.8bn over four years.

McAllister said the government was concerned the fast-rising costs would negatively impact broad support within Australia for the NDIS.

“I don’t think that the community broadly believes that a scheme that costs $100bn a year by the middle of next decade is a scheme that is operating sustainably,” she said.

“But that is the path that we are on, unless sensible amendments are made to the operation of the scheme to ensure that [the NDIS] works as intended.”

The government’s amendment does not exempt any participant from being impacted by the broad funding reductions but it gives those with high support needs a chance to remedy any sudden financial shortfalls from the change.

The Coalition also secured amendments to create new criminal and civil penalties against anyone offering or providing kickbacks using NDIS funding.

Aggravated integrity offences, including obtaining funds by deception, providing false or misleading information, intentionally destroying records and abuse of position as a participant’s nominee will also be introduced.

The government’s plan to pass the NDIS changes this week were almost postponed by the Coalition’s ultimatum to bring tax law changes to close the “widow tax” loophole early.

It is expected that the tax reforms, which include closing the loophole, will be voted on Wednesday morning.