What the 2026 Budget Means for Australian Care Providers

The Federal Budget handed down in mid-May confirmed what many in the disability sector have known was coming for months.

The Treasurer Jim Chalmers' announcement that the Government will recoup more than $35 billion by curbing the National Disability Insurance Scheme’s growth and making changes to who can access support services is the biggest news for the industry in some time, and it has consequences for disability support providers in Australia.

For NDIS providers, the concern is that these changes will result in less money, shared between fewer organisations. However, there are ways to reduce the impact on profit margins and continue to thrive in 2026 and beyond. 

This article explains the NDIS reforms announced in 2026 and details how providers can reduce the financial impact. 

In short:

• The Federal Government announced NDIS reforms that will generate $37.8 billion in savings as part of the 2026 Federal Budget
• The number of people on the scheme is expected to fall from 760,000 to 600,000 by the end of the decade
• Reduced participant funding means reduced revenue for providers
• The price book remains largely fixed by the Government, so providers cannot simply charge more to compensate
• Efficiency and quality of care are now the most powerful levers available to providers that want to maintain client numbers and profit margins
• Visualcare helps NDIS providers to set up smarter rostering, workforce matching and cost control

2026 NDIS funding changes: What has actually been announced?

Prior to the budget, Health Minister Mark Butler outlined the government's intention to overhaul the NDIS, describing the scheme's growth as unsustainable and its future as being "at risk" if a course correction was not implemented.

The key figures and measures confirmed in May are:

• $37.8 billion will be cut from NDIS spending over four years
• Participant numbers will be reduced from 760,000 to 600,000 by 2030
• Annual NDIS cost target is set at $55 billion in 2030, down from the current forecast of $70 billion
• Eligibility rules to be overhauled, with access based on standardised, evidence-based assessments of "functional capacity" rather than diagnosis alone
• Plan reassessment criteria will be tightened, and guidance on what constitutes "reasonable and necessary" supports will be strengthened
• Budgets for social, civic and community participation and capacity building daily activities will be reset
• New Framework Planning will deliver more consistent and sustainable participant plans from April 2027
• Plan management and support coordination will be commissioned by the government, with a commissioning approach for home and living supports also to be consulted on
• $2 billion will establish the new Thriving Kids program, part of a broader $5 billion Foundational Supports commitment (to be matched by the states)

The scale of this shift is significant. As recently as the first Albanese budget, projections had the NDIS costing $100 billion by the end of the decade. The government is now aiming to bring that trajectory under control.

Read more: Budget 2026-2027

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‍Why the NDIS funding update matters for providers

The impact of the changes will affect more than participants. 

Plain and simple, for providers, the funding attached to each participant plan represents revenue. When that funding shrinks, whether through tighter eligibility, reduced plan values or fewer people on the scheme, the money available to purchase NDIS provider services shrinks with it.

The NDIS price book sets the rates providers can charge, and that will largely remain fixed outside of annual changes. If providers do charge above the price book, participants must cover the difference out of pocket, and this is the exception rather than the norm.

What this means in practice: 

If a participant's plan drops from $30,000 to $25,000 per year, that $5,000 is $5,000 less in services they can purchase from your organisation. 

Multiply that across your participant base, and the financial exposure becomes clear.

At the same time, your costs, particularly labour, which typically accounts for around 80% of total expenses, are not going down. 

This creates a real and urgent pressure on margins.

Three levers every NDIS provider needs to pull to reduce the impact of funding cuts

In a tighter funding environment, there are fundamentally two ways to protect the viability of your organisation.

The first is quality of care. Providers who consistently deliver high-quality, well-matched support will be the ones participants choose and stay with. As competition for a smaller pool of funded participants increases, your reputation becomes a genuine business asset.

Employee experience is also important. When team members have clear, reliable schedules, consistency across their routine and less confusion about where they need to be each day, retention improves and there is less need to manage turnover or rely on costly agency staff. 

The final lever is operational efficiency. If you cannot increase the amount your organisation earns per participant, you need to reduce what it costs to deliver each hour of care. This means eliminating the waste that exists in poorly structured rosters, mismatched worker-participant pairings, excessive last-minute changes and unnecessary reliance on agency staff.

These levers are available to every NDIS provider, and are areas where the right technology can make a measurable difference.

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Why is the government making these updates to the NDIS?

When the NDIS was first proposed by the Productivity Commission in 2011, it was estimated to support just under 500,000 people at a cost of $13.6 billion per year.

Today, more than 760,000 Australians use the scheme, and costs have blown past $50 billion annually. 

Unfortunately, a significant driver of that growth has been the exploitation of the system. Fraudulent providers, inflated claims and participants receiving support they are not genuinely entitled to have all contributed to a financially unsustainable program.

The Budget reforms are structured around four pillars:

1. Quality services and supports: The government will commission plan management and support coordination, and consult on a commissioning approach for Supported Independent Living to address both participant outcomes and provider viability.
2. Clearer eligibility requirements: Standardised, evidence-based assessments of functional capacity will sit at the core of NDIS access decisions, replacing the previous diagnosis-based model.
3. Slowing cost increases: Tighter criteria around plan reassessments, stronger guidance on reasonable and necessary supports, and New Framework Planning (from April 2027) are all designed to deliver more equitable and sustainable outcomes.
4. Fighting fraud and stopping rorts: Increased oversight of providers and payments, stronger investigative and enforcement powers for the NDIA, and new regulatory controls to protect participants from exploitation.

As the Government explained when announcing the changes, the NDIS was established to support people with permanent and significant disability. Part of the problem is that the scope has expanded to support Australians with less significant needs, and there is a lack of clarity around what supports are considered reasonable.

Visualcare: Improving operational efficiency for NDIS providers

Visualcare is built around helping NDIS providers do more with the resources they have.

On the quality side, our purpose-designed software helps rosterers to put the right person with the right participant more consistently, which improves both client and employee experience. 

On the efficiency side, Visualcare gives real-time visibility across rosters, helping admin teams identify over- and under-allocation before it becomes a payroll problem. 

Through our partnership with Pay Cat payroll software, Visualcare now also embeds award-aware payroll interpretation directly into your scheduling. Because labour is 80% of your cost base, even modest improvements in how shifts are structured and how time is tracked can have a significant financial impact.

Read more: Technology that empowers operations management for care providers

Adapt to thrive

The too-high costs of operating the NDIS meant reforms were inevitable, but the scheme remains central to public health and wellbeing in Australia. 

The providers that thrive over the years to come will deliver care that clients genuinely value while carefully keeping an eye on compliance and cost management. Rostering and payroll have a huge role to play in this, and Visualcare is specifically placed to support greater visibility and control in these areas. 

Contact Visualcare to request a demo of our industry-specific rostering software today. 

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