TL;DR: Starting January 1, 2028, NDIS eligibility will be determined by functional capacity assessments rather than medical diagnoses. This article outlines the progressive reassessment process for existing participants, the newly established escalation pathway for individuals requiring continuous 24-hour care, and the transition challenges highlighted by disability advocates.
The Shift to Functional Capacity Assessments
The federal government's overhaul of the National Disability Insurance Scheme (NDIS) introduces a major change in how eligibility is determined. Beginning January 1, 2028, access to the $50 billion scheme will be based on standardized functional capacity assessments. This marks a shift away from diagnostic-based entry, focusing instead on how an individual's impairment impacts their daily life.
Under the new framework, eligibility will be restricted to individuals with permanent and profound impairments. This change is expected to affect approximately 240,000 current and future participants, who will either be removed from the scheme or prevented from accessing it. The government has confirmed that existing participants will not be transitioned out immediately; instead, they will undergo progressive reassessments under the new functional capacity criteria starting in 2028. This progressive approach is intended to allow time for state-based foundational supports, such as 'Thriving Kids' and 'Thriving Teens', to be established.
The Escalation Pathway for 24-Hour Continuous Care
To protect the most vulnerable participants during this transition, the government incorporated several late amendments into the bill with the support of the Coalition. A key addition is the 'escalation pathway' for high-risk participants who require continuous, 24-hour care.
This pathway allows high-risk participants to apply for a formal plan variation, ensuring their complex needs continue to be met without interruption. NDIS Minister Jenny McAllister explained that this mechanism is designed to prevent vulnerable individuals from losing access to critical, round-the-clock supports. The escalation pathway acts as a legislative safety net, allowing participants with intensive support needs to seek immediate modifications to their plans if their circumstances change or if they face reassessment challenges.
Implementation Challenges and Sector Concerns
Despite the inclusion of the escalation pathway, disability advocacy groups remain concerned about the operational details of the transition. The peak body, People with Disability Australia (PWDA), has warned that the changes could lead to significant gaps in support.
Jarrod Sandell-Hay, PWDA's interim president and an NDIS participant, expressed concern that many individuals will be forced to exit the NDIS before alternative systems are fully established. Sandell-Hay pointed out that the first alternative program, 'Thriving Kids', which starts in October 2026, still lacks full state participation due to Queensland's delay in finalizing its implementation plan. With other critical alternative systems, such as the 'Thriving Teens' program for youth over nine, still in the design phase, advocates fear that participants will face a gap in support.
Megan Spindler-Smith, PWDA's acting chief executive, also highlighted the scale of the transition, noting that the reforms are expected to remove 94 million hours of paid care from participants' plans. Spindler-Smith emphasized that state and territory governments have explicitly stated that their alternative foundational supports will not be like-for-like replacements for the NDIS, raising concerns about how the care needs of transitioned individuals will be met.
Key Takeaways
- Functional Assessments: From January 1, 2028, NDIS eligibility will be based on functional capacity assessments rather than medical diagnoses.
- Progressive Reassessments: Existing participants will face progressive reassessments to determine their eligibility under the new, stricter criteria.
- Target Group: Access will be restricted to individuals with permanent and profound impairments, affecting an estimated 240,000 participants.
- Escalation Pathway: High-risk participants requiring continuous 24-hour care can use a new escalation pathway to apply for plan variations.
- Transition Gaps: Advocates warn that alternative state-based programs do not currently exist and will not offer like-for-like replacements for the 94 million hours of paid care being removed.
- Timeline Pressures: Governments have 16 months to design and launch the 'Thriving Teens' program and equivalent adult supports before the 2028 eligibility changes take effect.
