‘Not the right fit’: NDIS won’t take children with autism, developmental delay in $2b shift
By Natassia Chrysanthos, Nick Newling and Cassandra Morgan
Disability Minister Mark Butler has declared the National Disability Insurance Scheme is “not the right fit” for thousands of children with autism or developmental delay, and revealed they will be diverted from the $46 billion scheme from mid-2027.
In a major address on the scheme’s future, Butler said a new system called Thriving Kids would be established to support families in schools, childcare centres and playgroups from July 2026, and fully rolled out a year later.
Minister for the NDIS Mark Butler at the National Press Club on Wednesday.Credit: Dominic Lorrimer
The Albanese government will also seek to reduce annual NDIS growth from its trajectory of 10.8 per cent to a maximum of 5 to 6 per cent, as the scheme’s current growth rate sets it up to become the third-largest budget item and risks losing public support, even as Wednesday’s announcement divided opinion.
“We are at a fork in the road right now,” Butler told the National Press Club on Wednesday.
“Children with mild to moderate levels of developmental delay and autism should not, in my view, be on a scheme set up for permanent disability. It is not the right fit.
“But I recognise it is the only port available to so many parents, tens and tens of thousands of parents, and I think we should treat as a matter of urgency the need to provide them with a more suitable system of broad-based, mainstream support.”
The NDIS was intended to support about 410,000 people, but now serves almost 740,000 – a figure that grows each quarter, particularly as children join the scheme because there is scarce support outside it. More than half of new participants are under nine, and seven in 10 people joining the scheme have autism as a primary diagnosis.
“I think most Australians would be alarmed to know that now, one out of every 10 six-year-olds are on the NDIS, including 16 per cent of six-year-old boys,” Butler said.
“Only around one in 50 people have significant and permanent disability, hence the need for a bespoke scheme like the NDIS. But 10 in 50 young children experience developmental delay or autism – mostly at mild to moderate levels.
“That’s a broad-based, mainstream issue that should be supported by broad-based, mainstream services ... I know this will be hard for some parents to hear, and I don’t say it lightly.”
Many families with children on the scheme responded with concern on Wednesday. Melbourne woman Katie Koullas, who runs autism charity Yellow Ladybugs, took issue with the government’s framing. Both Koullas and her child are autistic.
Katie Koullas, who heads up autism charity Yellow Ladybugs and parents an autistic child supported by the NDIS, says she was outraged by Mark Butler’s call to divert children away from the scheme.Credit: Joe Armao
“There is no such thing as ‘mild autism’ when you are the autistic child living with the daily toll of masking, anxiety, exhaustion and exclusion,” she said.
“Suggesting these children are ‘not the right fit’ for the NDIS sends the message that their struggles are less real, less worthy, and less urgent. That is simply unacceptable... If this transition is rushed or poorly designed, it will strip children of essential supports and leave them at risk.”
Butler made the case that the NDIS model, which issues individualised plans and budgets, did not suit the needs of children with developmental challenges. “Families with a young child who is missing some milestones are not best helped by receiving a budget of $10,000 or $20,000 or $30,000 and then being expected to work out themselves how to spend it. And, frankly, many of those children are being overserviced.”
Another mother — who requested to remain anonymous to protect the identity of her 13-year-old son — said she was satisfied with NDIS services. “I never felt that we were using [them] more than necessary. The moment his speech became fluent, we stopped [speech therapy],” she said.
But she said she mainly “just wanted some clarity” about how the changes would affect her family, and was not confident that public schools were sufficiently funded to support students with developmental delay or autism without the support of the NDIS.
Butler said the Thriving Kids system would leverage existing schools, childcare, community centres and playgroups – where families already interacted with support services – and boost the services they offered.
“I know schools can play a more co-ordinated role, very different to the individualised approach right now that sees school principals reporting literally dozens and dozens of different therapists turning up to their school to provide therapy to individual students one at a time.”
“Early childhood education and care is also a crucial touchpoint for families and that will become even more important as we move towards more universal provision.”
Butler said the government was also looking to introduce universal health checks for three-year-olds, and new Medicare items for occupational therapy, speech pathology and psychosocial therapy.
He said he also wanted to develop an online gateway service that would give parents free support or guidance about where to seek help if they were worried about their child’s development.
The Commonwealth would start by making a $2 billion contribution, which would be matched by state governments.
Former NDIA board member Martin Laverty, now chief executive of NDIS provider Aruma, said Butler’s remarks were “brave and necessary”. Laverty said families’ uncertainty was very reasonable, but he was confident the system would work.
“We’ve been given a two-year time frame to first clarify the way in which Thriving Kids program will work, and a further 12 months to put in a pathway for those who will be serve,” he said.
“We can’t lose sight that today, there are children are receiving therapies for which there are questionable impact. If you are a parent or carer, you want confidence that your children are receiving the best care.”
Butler said access and eligibility changes would be made to the NDIS once the Thriving Kids system was rolled out in 2027.
”Children who are enrolled in the NDIS now or become enrolled before that time will remain on the scheme subject to its usual arrangements, including, from time to time, reassessments,” he said.
“But from 1 July 2027, there will be access and eligibility changes put in place that do steer those parents and their children towards the system of Thriving Kids, and I think that will be entirely appropriate.”
Federal and state governments have been locked in negotiations to establish a new disability system for children called “foundational supports” since a national cabinet deal agreed to take pressure off the NDIS in 2023.
Butler conceded work on those reforms had drifted. He said the Commonwealth would take on a greater role in designing the new system.
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