The road to reforming the National Disability Insurance Scheme (NDIS) is full of obstacles.
One of the biggest challenges is getting the federal and state governments to agree on responsibility and funding for “basic support.” This is a disability-specific service for people who are not eligible for individual NDIS funding.
Some progress has been made on basic supports for children with developmental delays and autism. that Federal Government’s Thriving Kids Initiative It is scheduled to begin in mid-2026.
However, there has been no progress on non-NDIS basic support for people with “psychosocial disabilities”. This is a disorder that can be caused by a mental health condition, such as schizophrenia, major depression, or post-traumatic stress disorder, that affects a person’s ability to function.
our new Grattan Institute Report Shows how Australia can build a national psychosocial support system in five years without spending more. This requires a clear vision, wise design choices and strong commitment from all governments.
What does psychosocial support look like?
Psychosocial support is non-clinical support that helps people with mental health problems live meaningful, independent lives in the community.
This includes programs that help people build social relationships, learn skills, and maintain stable housing.
The personal, social, and economic costs of not receiving this support are significant, including reduced quality of life, reduced opportunities for community participation, and loss of productivity.
What’s the problem?
By 2023, approximately 223,000 Australians aged 25 to 64 will experience a serious psychosocial disability.
Of those, almost 58,000 received psychosocial support from the NDIS. Last year, it provided more than $5.8 billion to support this group..
However, the majority of people with serious psychosocial disabilities are below the NDIS eligibility threshold. And about 130,000 adults do not receive assistance.
Grattan Institute
Access to non-NDIS support is uneven.
Federal, state and territory governments all fund small-scale psychosocial support programs through the mental health system. This is outside the NDIS.
There is insufficient coverage in all states and territories. The range of support available will depend much more on where you live than on your level of need.
Our analysis shows that these changes are dramatic. There is a seven-fold difference in the proportion of people receiving psychosocial support outside the NDIS between Queensland (highest) and Tasmania (lowest).
There are also significant differences in the intensity of services provided. Queensland, for example, provides small amounts of support to relatively large numbers of people. In New South Wales, very few people are served, but there are more than 10 times as many hours served per person.
Broader support plan
Our new report proposes a new national psychosocial support program that reflects the evidence we know works. Examples of evidence-based services include:
How does the program work?
Our proposal is simple. Funding psychosocial support for people outside the NDIS.
Primary Health Networks (PHNs) are 31 health organizations that plan services to meet the needs of communities across Australia. They should be tasked with making referrals for psychosocial support in collaboration with local service providers, non-governmental organizations, state and local hospital networks, and consumer and caregiver organizations.
Rather than perpetuating a postcode lottery where access to psychosocial support varies depending on where you live, a PHN-led approach could provide a clearer path towards national consistency and equity.
continuous support
This program does not replace the NDIS, which plays a vital role in supporting those who need the most intensive support.
A key feature of a more flexible and integrated system should be the ability for people to “step down” from the NDIS to low-intensity psychosocial support outside the system, and the ability to move back up if need increases again.
We propose the use of a “zero dollar scheme” where individuals are still in the NDIS system but do not receive any funding. This allows you to pause your NDIS application without affecting a person’s ongoing NDIS eligibility status. You can resume your application at a later stage without having to reapply.
Why It Doesn’t Cost More
Previously we had argued that the problem was not a lack of enough money in the system; How is it distributed?.
The government can use existing NDIS funding pools, to which both the federal government and state/territory governments contribute, to fund new psychosocial support programs without having to spend more money.
Providing this support through the NDIS budget will ensure stable funding, provide a more equitable distribution of resources and give all governments a stake in creating a more balanced system.
Read more: How to reform the NDIS and better support disabled people who don’t qualify
To achieve this, the government must carefully redirect some of its NDIS funding to new programs, which have a poor evidence base.
If successful, this will reduce the burden on the NDIS. If psychosocial support outside the NDIS helps people improve their quality of life, it may prevent, reduce or delay the need for individualized packages in the future.
The government must change direction from its current plan. It aims to see federal and state/territory governments commit new funding to: basic supportIncludes psychosocial support. The need for new funding caused an unnecessary two-year delay.
A more practical approach would be to better use existing NDIS funding to meet the needs of more Australians with serious psychosocial disabilities.
