NDIS tightens access for people with psychosocial disability

What just happened

Australia’s NDIS Amendment Securing the NDIS for Future Generations Bill 2026 is moving through Parliament with two new requirements that disproportionately affect people with psychosocial disabilities — mental health conditions including schizophrenia, bipolar disorder, and major depression.

The first is a permanence requirement: applicants must demonstrate that their disability is permanent. The second is treatment exhaustion: applicants must show they have undertaken all appropriate publicly funded treatment options before accessing the scheme. In June, the Greens negotiated an amendment narrowing the second requirement from “all appropriate treatments” to publicly funded options only — a modest concession given how limited publicly funded mental health care actually is.

For people whose disability arises from mental illness, both requirements are more difficult to satisfy than they might appear on paper.

Both-and

What the legislation asks of people with mental illness

“Permanence” is a category that sits awkwardly with psychosocial disability. Schizophrenia, bipolar disorder, and major depression have no cure. But their presentation fluctuates — a person may be relatively functional for months and then acutely unwell. Establishing permanence requires demonstrating not just that the condition exists but that it creates lasting and substantial functional limitation. For people whose symptoms oscillate, assembling this evidence is cognitively and administratively demanding — particularly because cognitive difficulties (memory, concentration, planning) are themselves common symptoms of the conditions being assessed.

The access statistics are already stark. According to researchers at Deakin University, only 1 in 4 people with psychosocial disability currently gains NDIS approval — versus 4 in 5 applicants overall. That approval rate has fallen nearly two-thirds over five years: from 66% to 25%. Of NDIA decisions reviewed by the Administrative Appeals Tribunal between 2019 and 2021, 76% were overturned or varied in the applicant’s favour — suggesting the agency’s initial decisions have been consistently wrong for this cohort.

The treatment exhaustion requirement adds a second layer. Medicare covers only 10 psychology sessions per year under Better Access, with common gap fees exceeding $100 per session. Public mental health waiting lists in most states extend months. Community mental health services have faced sustained funding pressure. Asking someone with serious mental illness to demonstrate they have exhausted the publicly funded system before accessing disability support assumes a publicly funded system adequate to be exhausted. In many communities, it isn’t.

What is contested

Proponents of the changes argue the NDIS has drifted from its original purpose — supporting people with significant permanent disability — and that some people accessing the scheme would be better served by the mainstream health system. That structural argument is not without merit.

The problem is the implementation. The expert group developing the new assessment framework isn’t expected to report until 2027 — after the legislation passes. People with psychosocial disability will face the new requirements without the supporting framework in place. The legislation also proposes removing the right to internal review for some decisions, potentially cutting off the appeals pathway that has historically allowed three-quarters of contested psychosocial decisions to be overturned.

Removing the appeals mechanism for a cohort that has historically been approved at one-quarter the rate of other applicants — and whose tribunal review outcomes suggest initial decisions are consistently wrong — is a structurally different proposition from streamlining an otherwise well-functioning scheme.

The Senate committee report is expected shortly. Whether the legislation passes in its current form or with additional safeguards will depend significantly on that report and on crossbench negotiations.

Why this matters in the consultation room

GPs are often the clinicians whose documentation anchors an NDIS application. Under the new requirements, that documentation carries more weight.

Establishing permanence for a mental health condition requires clear clinical records showing long duration and the functional impact of the condition across domains: employment capacity, self-care, social participation, and the person’s ability to manage daily demands. It is not sufficient to document that a diagnosis exists — the documentation needs to establish that the condition limits function substantially and on an ongoing basis.

The treatment exhaustion requirement means documenting what publicly funded pathways have been accessed, how the person responded, and why those pathways are insufficient for their support needs. This encompasses not just psychology but psychiatry, community mental health teams, and hospital services where relevant.

What this means for the 45-year-old woman in your waiting room

Serious mental illness is not age- or gender-neutral. Many women in the 35–55 age bracket are managing bipolar disorder, treatment-resistant depression, PTSD from prior trauma, or schizophrenia spectrum conditions — often while maintaining caregiving roles that mask the severity of their functional limitations. They are also the cohort most likely to be pushing through rather than documenting how much they can’t.

If a patient in this position is approaching the NDIS — or has already been rejected — the documentation of functional limitation needs to capture the full picture, not the best-day version the patient may be presenting in the consultation room.

My two cents

If you have a patient with serious mental illness who may benefit from NDIS support: the time to start building comprehensive clinical documentation is now, before the new requirements take effect. Record functional limitations, document the treatment pathway to date, and be specific about what publicly funded options have been accessed and why they have been insufficient.

If you are a patient who has been rejected from the NDIS for psychosocial disability: the tribunal review data suggests the initial decision is wrong more often than it is right. Pursuing review — ideally with advocacy support from a mental health legal centre or an organisation like the Summer Foundation — is worth doing before accepting the rejection as final.

This is a policy change that will affect some of the most vulnerable people in general practice. Knowing the new requirements is the first step to helping patients navigate them.

Verdict: yes — a real change to how people with serious mental illness access disability support, with direct implications for GP documentation and patient advocacy.

---

Sources cited

1. People with psychosocial disability from mental illness will lose out from tightened NDIS eligibility. The Conversation, August 2026. https://theconversation.com/people-with-psychosocial-disability-from-mental-illness-will-lose-out-from-tightened-ndis-eligibility-289378
2. National Disability Insurance Scheme — NDIS. https://www.ndis.gov.au/
3. Summer Foundation — disability housing and support advocacy. https://www.summerfoundation.org.au/