New NDIS eligibility rules will cut 240,000 participants from scheme in four years, documents reveal

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Modelling predicts 241,000 people on the scheme before January 2028 won’t be receiving supports by mid-2031

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More than 240,000 participants are expected to be shifted off the national disability insurance scheme in the four years after new eligibility rules are introduced, internal documents reveal.

Newly released departmental modelling also shows proposed cuts to funding for social, civic and community participation will help achieve the single biggest saving of the measures the Albanese government is pursuing to contain the scheme’s ballooning growth.

The federal government is planning drastic changes to the NDIS after warnings it was projected to cost $117bn a year in a decade’s time – up from $50bn annually – without urgent and far-reaching interventions.

Labor wants to tighten eligibility criteria, subject all participants to standardised assessments and register more types of providers.

Announcing the reform last month at the national press club, the health minister, Mark Butler, said preliminary modelling showed the changes would reduce the number of participants to 600,000 by the end of the decade – about 160,000 fewer than existing levels.

But a document tabled in the Senate on Wednesday revealed the number of participants to be “exited” – or shifted – from the scheme to achieve that target by mid-2031 was 241,000.

The modelling showed participant numbers were forecast to peak at 817,000 next year before the new eligibility rules start on 1 January 2028.

The new system – details of which are yet to be finalised – will determine entry based on a person’s functional capacity, rather than allowing access based on diagnosis alone, as was intended when the NDIS was designed.

The modelling revealed 33,000 existing participants were expected to be pushed off the scheme by 30 June 2028, with that number growing to 125,000 by mid-2029.

By mid-2031, a total of 241,000 people who were on the scheme prior to 1 January 2028 would no longer be receiving NDIS supports.

The modelling expects the NDIS to be supporting 598,000 people at that point, compared to the projected 944,000 had no changes been made.

Almost 350,000 fewer people would be on the NDIS as a result of either being forced off the scheme or denied entry in the first place.

The federal government insists those participants won’t be left without any support, with a new network of state-based disability supports planned for people outside the NDIS.

The documents also include a line-by-line breakdown of the expected $37.8bn in savings the overhaul is designed to achieve.

The proposed cuts to budgets for community participation are expected to help save $13.2bn over four years – the largest amount of any of the measures.

That stream of funding allows NDIS participants to hire support workers to accompany them into the community, helping to build independence and reduce social isolation.

Guardian Australia last week reported concerns the proposed budget cuts would lead to more segregation for NDIS participants, ignoring one of the major lessons from the disability royal commission.

The Greens disability spokesperson, Jordon Steele-John, who requested the modelling, said the documents showed cost-cutting was the government’s main motivation.

“You cannot make cuts on this scale without disabled people feeling the consequences in their everyday lives,” Steele-John told Guardian Australia.

“The government can call these cuts ‘efficiencies’ all it likes, but for many disabled people this will mean more reassessments, more bureaucracy, more barriers, and constant anxiety about whether they will be able to access the support they need to live with dignity.”

A government spokesperson referred to Butler’s press club speech in response to Guardian Australia’s questions about the modelling.

“The NDIS was originally intended to support around 410,000 people with a disability. Today there are 760,000 people on the scheme,” the minister said in the April speech.

“While new eligibility rules need to be worked through, our initial modelling will see the number of people on the scheme reduce to around 600,000 by the end of the decade instead of growing to well over 900,000.”

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