Concerns Over NDIS Changes for Psychosocial Disabilities
On 22 April 2026, the Mental Health Coordinating Council (MHCC) expressed concerns about the Federal Government’s proposed changes to the National Disability Insurance Scheme (NDIS) affecting those with psychosocial disabilities. The council insists on a fully funded and co-designed alternative service system before proceeding with these changes.
Minister Mark Butler addressed the National Press Club, prompting MHCC CEO Dr Evelyne Tadros to stress that the shift from diagnosis-based to functional capacity-based access could reduce support for current NDIS participants. This may lead to diminished access and potential removal of participants from the scheme.
The ‘Access Denied: Psychosocial Disability and the NDIS’ report by the Australian Psychosocial Alliance reveals a 62% decline in NDIS approval rates for psychosocial disabilities over five years, with only 25% of applications approved. This highlights persistent challenges faced by those requiring psychosocial support.
Call for Government Action
Dr Tadros emphasised the critical need for a well-funded, universally available community-managed mental health system to prevent further service gaps and fragmentation. She warned that moving psychosocial supports outside the NDIS poses significant risks without clear safeguards.
“People with psychosocial disability cannot be left in policy limbo while governments resolve budget pressures,” Dr Tadros declared. “Sustainability is important, but it cannot come at the expense of access, continuity of care, or human rights.”
The MHCC urges the Federal Government to ensure continuity of support for current participants and collaborate with state and territory governments to develop psychosocial supports through Foundational Supports. The council also argues for co-designing any new system with individuals with lived experience, carers, and the mental health sector.
Dr Tadros concluded, “Psychosocial disability supports are not optional add-ons; they are essential to enabling people to live well in the community.”
The MHCC supports the Government’s focus on slowing NDIS growth, improving scheme integrity, and addressing fraudulent activities. However, Dr Tadros warned that psychosocial challenges cannot be resolved solely through programmes like the announced Inclusive Community Fund.
Lessons from past systems show that unless community-managed mental health supports are universally available, well-funded, and coordinated across jurisdictions, individuals may fall through the cracks. This reflects the necessity for a clear and articulated service system.
