NDIS changes and Psychosocial disability

Review risk Updated 2026-05-07

Psychosocial disability — disability arising from mental health conditions — is one of the highest-risk cohorts in the April 2026 reforms. The government has explicitly flagged mental health supports as a candidate for the new foundational support tier, and some psychosocial participants are among the 160,000 projected to move off the NDIS.

What this means for your situation

Minister Butler specifically identified the interface between NDIS and the mental health system as a priority for reform. Psychosocial participants with moderate support needs are at significant risk of being redirected to state mental health services or the new foundational tier. Participants with severe and enduring mental illness, complex needs, and high support intensity are less likely to be affected.

What determines your risk

— Explicitly named as a reform target — mental health/NDIS interface is being redesigned
— Functional capacity assessments will be harder to demonstrate for episodic conditions
— Foundational support tier may become the primary pathway for moderate psychosocial needs
— Severe and enduring psychiatric disability with significant functional impairment is lower risk

Support lines under scrutiny

→ Community participation and social recovery supports
→ Lower-intensity daily living supports
→ Capacity building supports focused on social participation

What to do now

1. Build a functional impact record now — document how your condition affects daily tasks on both good and bad days

2. Engage your psychiatrist or psychologist to write a detailed functional report, not just a diagnosis letter

3. Contact your state mental health advocacy service to understand what foundational supports may look like

4. Use the check tool on this site to understand your specific exposure level

Get a personalised read in 5 minutes.

The check tool asks 8 questions about your specific plan, support types, and situation — not just your diagnosis. You'll get a clear risk assessment plus a printable roadmap.

Start the check →

Frequently asked

Is psychosocial disability being removed from the NDIS?

Not removed — but the threshold for NDIS-funded support is expected to rise. Moderate psychosocial needs may be redirected to state mental health services or the new foundational tier. Participants with severe and enduring mental illness and significant functional impairment are less at risk.

Why is psychosocial disability more at risk than other conditions?

The government has explicitly identified the overlap between NDIS and the mental health system as a cost driver. The new framework is designed to shift some mental health support responsibility to state governments. The episodic and fluctuating nature of many mental health conditions also makes functional capacity harder to demonstrate consistently.

What counts as evidence of functional impairment for psychosocial disability?

Evidence that describes how your condition affects your ability to carry out daily tasks — not just a diagnosis or hospitalisation history. Useful evidence includes OT functional assessments, psychiatrist reports describing functional limitations, and support worker notes about day-to-day assistance required.

What's happening in your state

New South Wales → Victoria → Queensland → Western Australia → South Australia → Tasmania → Australian Capital Territory → Northern Territory →

Other conditions

Autism (ASD) Intellectual disability Cerebral palsy Acquired brain injury (ABI) Multiple sclerosis (MS) Down syndrome ADHD Spinal cord injury (SCI) Physical disability Vision impairment Hearing impairment / Deafness

Information current as of 2026-05-07. Rules are subject to change as legislation is finalised. This page is general information, not legal or clinical advice. For advice on your specific situation, talk to your plan manager, support coordinator, or a free disability advocate. Full disclaimer