On 22 April 2026, Federal Health and NDIS Minister Mark Butler addressed the National Press Club and announced the most significant changes to the NDIS since the scheme began. For participants with psychosocial disabilities (those whose disability arises from a mental health condition) the reforms carry both reassurance and serious risk, depending on your individual circumstances.
The Australian Psychosocial Alliance’s Access Denied report, released in 2026, documents a 62 per cent drop in NDIS approval rates for psychosocial disabilities over the past five years, with just one in four applications currently approved. Against that backdrop, the announcement that psychosocial disability will remain within the NDIS was welcomed, but the detail of how access will be determined is generating genuine concern among families, advocates, and providers alike.
At Chapman Support Services, we’re a registered NDIS provider based in Coffs Harbour on the NSW North Coast. Our team has supported participants with psychosocial disabilities, complex physical conditions, and communication differences, and we’ve been following these reforms closely. This article explains the 2026 NDIS reforms as they affect participants with psychosocial disability: what’s changing, what’s still uncertain, and what you can do to protect your current supports.
What Is Actually Changing in 2026
The reforms announced in April 2026 introduce several interconnected changes that will roll out progressively through mid-2026 and into 2028. The most significant shifts for participants with psychosocial disability are:
- Functional eligibility, not diagnosis: Access to the NDIS will increasingly be assessed based on how a mental health condition affects daily life, not on the diagnosis itself. This change is designed to be fairer, but it means that the quality and detail of your supporting evidence matters more than ever.
- New Framework Planning from mid-2026: A new planning process is being introduced that aims to make NDIS plans clearer and more flexible. Budget categories will become more flexible, with participants able to allocate across support types without the current rigid silos between core and capacity building.
- Mandatory provider registration from 1 July 2026: Currently, only around 16,000 of 260,000 NDIS providers are registered. All providers delivering supports to NDIS participants will be required to register. This is particularly important for participants with psychosocial disability, who can be especially vulnerable to unregistered providers operating without oversight.
- Longer plan durations: Plans may extend to up to five years, reducing the administrative burden of annual reviews, though reviews will still be triggered by significant life changes.
- Disability-Related Health Supports reclassified: From mid-2026, some therapy-related supports will migrate from core funding to capacity building, which will affect how some participants access and claim psychosocial support services.
What Is Not Changing, and Why That Matters
Minister Butler confirmed explicitly that psychosocial disability will remain within the scope of the NDIS. Participants with severe and persistent mental illness will not face a higher eligibility bar under the new framework compared with other disability groups.
The Minister also confirmed that foundational supports for adults with severe mental health conditions (those who need support but may not require full NDIS plans) will be addressed through a forthcoming National Mental Health and Suicide Prevention Agreement currently being negotiated with state and territory governments.
For NSW participants and families, this means some people who are transitioned away from individualised NDIS funding should eventually access alternative supports. The critical question, and the one advocacy groups are pressing hardest on, is the timing and funding of those alternatives.
Mental Health Australia has flagged that around 160,000 people may exit the NDIS through the access changes, against a backdrop of approximately 500,000 Australians who already cannot access the psychosocial supports they need outside the scheme. That gap is the single most urgent issue in this reform package.
What Participants and Families Should Do Right Now
Review your current plan before your next renewal. If your plan is coming up for renewal, do not treat it as routine. Under the new functional eligibility framework, the evidence you submit needs to clearly document how your condition affects your daily life, not just what your diagnosis is.
Gather recent reports from your treating team, GP, and any allied health professionals. Document functional impacts in detail. The shift to functional assessment means that reports describing your lived experience of psychosocial disability, what you can and cannot do on a day-to-day basis, how symptoms affect work, relationships, community participation, and self-care, carry more weight than a diagnostic label alone. Ask your treating team to use functional language in any supporting documents.
Confirm your provider’s registration status. From 1 July 2026, all NDIS providers must be registered. If you’re currently working with an unregistered provider for any support, now is the time to ask about their registration pathway or begin identifying a registered alternative. Chapman Support Services is a registered NDIS provider.
Speak to your support coordinator before your plan review. If you have a support coordinator in your plan, use them. They can help you navigate the new framework planning process, identify any gaps in your supporting evidence, and advocate on your behalf if your funding is reduced or your eligibility is questioned.
Don’t wait for your NDIA contact to explain the changes to you. The volume of participants being reassessed under the new framework is significant, and NDIA capacity is stretched. Proactive advocacy, from you, your family, your support coordinator, or your provider, is consistently associated with better outcomes in plan reviews.
Eligibility and Impact Matrix: Where Do You Sit Under the New Framework?
Use this table to understand how the 2026 changes are likely to affect your situation. This is general guidance only. Individual circumstances vary and professional support is recommended for any plan review.
| Participant Situation | NDIS Access Likely? | Key Risk Under 2026 Changes | Recommended Action |
|---|---|---|---|
| Severe, persistent psychosocial disability with significant daily life impact | Yes, confirmed in scope | Assessment quality: functional evidence must be strong | Update all reports before plan renewal; document daily functional impact |
| Moderate psychosocial disability, episodic symptoms, variable function | Uncertain, assessment-dependent | Variable function hard to capture in a single assessment snapshot | Request functional assessment at worst-period; use diary records as evidence |
| Currently NDIS-funded with plan coming up for renewal in 2026-27 | Yes, if functional evidence is maintained | New Framework Planning may change how funding is allocated | Engage support coordinator now; do not wait for renewal notice |
| New applicant with psychosocial disability, applying in 2026 | Possible, functional criteria apply | 62% approval rate drop for psychosocial cohort historically | Invest in strong allied health reports; consider professional support coordinator from the start |
| Currently relying on an unregistered NDIS provider for psychosocial support | N/A: provider issue, not access issue | Unregistered providers must register by 1 July 2026 or cease delivering NDIS services | Confirm provider registration status immediately; identify alternatives if needed |
| Participant likely to transition out of NDIS under new eligibility | Reduced, may move to foundational supports | Foundational supports for adults with mental health conditions not yet funded or operational | Seek advocacy support; contact your LAC and support coordinator urgently |
What We’re Seeing on the NSW North Coast
For participants in regional areas like Coffs Harbour, the reform risks are compounded by geography. When the NDIS reduces or removes funding for an individual, the alternatives (community mental health services, GP-based care, state-funded programs) are less readily available in regional centres than in metropolitan areas. The foundational supports promised in the National Mental Health and Suicide Prevention Agreement cannot arrive soon enough for our community.
What we tell every participant and family we work with: these reforms are real, they are moving quickly, and the window for proactive action is now. The families who get the best outcomes in this environment are those who engage early, document thoroughly, and have the right support around the plan review table.
If you’re navigating the 2026 reforms and unsure where to start, we’re here to help, not just with direct support services, but with practical guidance on what the changes mean for your specific plan.
Contact Chapman Support to Navigate Your NDIS Mental Health Plan
Contact Chapman Support to navigate your NDIS mental health plan. We’re a registered NDIS provider based in Coffs Harbour supporting participants with psychosocial disabilities across the NSW North Coast. Call 0431 617 197 or visit chapmansupport.com.au to speak with our team.
Frequently Asked Questions
Will participants with psychosocial disability be removed from the NDIS under the 2026 reforms? Minister Butler confirmed that psychosocial disability will remain within the scope of the NDIS and that this cohort will not face a higher eligibility bar than other disability groups. However, the shift to functional eligibility assessment means that the supporting evidence a participant provides must clearly document how their condition affects their daily life. Some participants with borderline eligibility may be affected by the new assessment process.
What is ‘functional eligibility’ and how is it different from the current approach? Under the current system, having a diagnosis of a serious mental health condition can be a significant factor in NDIS eligibility. Under the new functional eligibility framework rolling out from 2026, the focus shifts to how much your condition actually affects your ability to carry out daily activities: things like self-care, communication, community participation, and managing a household. A diagnosis alone will carry less weight; evidence of functional impact will carry more.
What are foundational supports and when will they be available? Foundational supports are a new tier of assistance being developed for people who may not need a full NDIS plan but still require some support. For adults with severe mental illness, the Government has committed to addressing this cohort through the forthcoming National Mental Health and Suicide Prevention Agreement with states and territories. As of April 2026, this agreement is still being negotiated. No firm timeline or funding commitment for this group has been announced.
What does mandatory provider registration mean for me as a participant? From 1 July 2026, all providers delivering NDIS-funded supports must be registered with the NDIS Quality and Safeguards Commission. If your current provider is unregistered, they will need to complete the registration process or cease delivering NDIS services after that date. As a participant, you should confirm the registration status of any provider you work with. Registered providers have met mandatory quality and safety standards.
I live in a regional area. What if alternatives to the NDIS aren’t available locally? This is one of the most significant concerns raised by advocates and providers in regional NSW, including the Coffs Harbour area. If foundational supports are not operational or accessible in your region when NDIS access is reduced or removed, there is a real risk of a support gap. Advocacy groups are pushing governments to ensure no participant is transitioned out of the NDIS without a funded, locally available alternative in place. Contact your LAC or support coordinator urgently if you’re in this position.
Do the 2026 reforms affect how my plan budget is structured? Yes. Under New Framework Planning starting mid-2026, budgets will become more flexible. You’ll be able to allocate funding across support types without the current rigid separation between core and capacity building budgets. Additionally, some Disability-Related Health Supports, including certain therapy services, will move from core funding to capacity building. This may affect how and where you claim psychosocial support services, so it’s worth reviewing your plan structure with your support coordinator before your next renewal.
About Chapman Support Services Chapman Support Services is a locally owned, registered NDIS provider based in Coffs Harbour, NSW, on the ancestral lands of the Gumbaynggirr people. The team supports participants with psychosocial disabilities, complex physical conditions, epilepsy, Auslan-accessible communication needs, and shared living arrangements across the NSW North Coast. Our director has lived experience of disability and is a fluent Auslan user. Visit chapmansupport.com.au or call 0431 617 197.