Australian Federal Budget 2026-27: NDIS & Aged Care Impact

Key message

The Budget does two main things:

• NDIS is tightening
• Aged care is growing

NDIS

The Government is making the NDIS more controlled.

Key changes:

• Fewer people may qualify for the NDIS.
• Participant plans will have less flexibility.
• More providers will need to be registered.
• Payments and claims will be checked more closely.
• Some services will move toward approved provider panels.

Providers most affected:

• Plan managers
• Support coordinators
• SIL providers
• ECI providers
• Social participation providers

This creates more need for:

• Registration support
• Compliance help
• Audit readiness
• Business restructure support

Aged care / MAC

Aged care is getting more support and funding.

Key changes:

• More Support at Home packages.
• More incentives to build residential aged care beds.
• Personal care co-payments are being removed.

This means:

• More demand for aged care providers.
• More pressure on:
  
  • staffing
  • billing
  • compliance
  • onboarding new clients

Simple takeaway:

The NDIS is becoming stricter. Aged care is expanding. Avaana can help providers prepare early and stay compliant.

Key dates

Regulation — what’s changing for providers

Only the regulator-side measures that change provider obligations or costs are included here.

NDIS Quality and Safeguards Commission

• Mandatory registration of high-risk NDIS providers — $182.6m over 4 years to roll out, with cost recovery receipts from providers ramping up from 2027–28.
• Commission staffing rises to 1,083 in 2026–27 (+191) to operationalise the new regime, then trims back from 2027–28 once embedded.

Provider impact:  Providers in ‘high-risk’ segments move from voluntary or limited registration into mandatory registration with audits, conditions and recurring fees. Operating costs increase. Non-compliant operators face faster enforcement under expanded statutory tools.

Aged Care Quality and Safety Commission (ACQSC)

• Cost recovery Stage 1 extended to 30 June 2029 under the new ACQSC charging model.
• Fee waivers for registration renewal and related audits expanded to Aboriginal Community Controlled Organisations.
• Aged care digital platform operators are formally regulated under the Aged Care Act 2024 for the first time.

Provider impact:  Registered aged care providers should expect ongoing cost recovery fees and indexed renewal charges under the new model. ACCOs get fee relief. Providers operating aged care digital platforms (matching services, marketplaces) are now in scope of the Commission’s obligations regime.

Fraud and integrity

• Fraud Fusion Taskforce continues
• New NDIS digital payment and provider enrolment system — $358.5m over 5 years.

Provider impact:  Cross-agency data sharing on NDIS provider activity becomes operational. Providers should expect more proactive integrity reviews, with particular focus on plan management, support coordination and high-volume claiming behaviours. The new digital payment system will change how invoices are submitted and reconciled.

Worker registration

• $1.0m over 2 years to progress a national worker registration scheme for personal care workers employed in aged care.

Provider impact:  Early-stage build of what is widely expected to become a mandatory regime, paired with the NDIS worker screening expansion. Aged care providers should anticipate eventual registration obligations for personal care workers.

General across NDIS & Aged Care

Payroll Tax (Clinical/Care Workers)

The Government will work with states on reforms to payroll tax administration, in addition to further improving labour mobility through national occupational licensing.

• This will allow health practitioners to work to their full scope of practice, and enable a national approach to screening care workers.

Provider impact:  Cross-state staffing and locum arrangements become administratively simpler. A national approach to care worker screening reduces duplication for providers operating across multiple jurisdictions.

Worker supply / wages (Clinical / Care)

• $85.2 million to accelerate skills assessments for migrant trades workers and to accelerate occupational licensing, making it faster for them to enter the workforce.
• The Government has recommended the Fair Work Commission award an economically sustainable real wage increase to Australia’s award workers.

Provider impact:  Faster migrant onboarding helps fill clinical and trades vacancies. The recommended award wage increase flows directly into provider cost bases — most NDIS and aged care workforces are predominantly award-covered.

NDIS

Measures are focused on tackling fraud and non-compliance, slowing rapid cost growth, clarifying eligibility requirements, and delivering quality services and supports.

The NDIS Quality and Safeguards Commission will expand mandatory registration to high-risk providers.

The Government will:

• increase oversight of providers and payments
• strengthen the NDIA’s investigative and enforcement capabilities
• introduce new regulatory controls to protect from exploitation.
  
  • NDIS Integrity Bill — to be tabled following the Budget.

Provider impact:  Providers in high-risk segments move from voluntary or limited registration into mandatory registration with audits, conditions and recurring fees. Operating costs rise. Non-compliant operators face faster enforcement.

Participants

Participant Access

Future eligibility for the NDIS will be based on a standardised, evidence-based assessment of a person’s functional capacity, rather than diagnosis. Access will be based on a substantial reduction in a person’s functional capacity that impacts their day-to-day living.

• Commencement: 1 January 2028.

Provider impact:  The participant pool shrinks (target ~600,000 by 2030, down from a projected ~760,000). Smaller eligible cohort and a shift toward higher-functional-impact participants. Existing participants reassessed under the new tool may exit the Scheme — putting pressure on provider revenue continuity.

NDIS Plans

To slow cost increases, the Government will tighten criteria around plan reassessments and strengthen guidance about what are reasonable and necessary supports.

• Budgets for social, civic and community participation and capacity building daily activities will be reset.
• End plan rollovers and stop unspent funds being rolled over to ensure plans align with reasonable and necessary decision-making.
• New Framework Planning for participant plans from April 2027.

Provider impact:  Lower plan budgets in social/community participation and capacity building translate directly into reduced revenue for providers in those segments. End of plan rollovers removes the buffer providers have relied on to absorb late-year service variations — invoicing discipline and utilisation forecasting become critical.

Core Module

Plan Management and Support Coordination

Support coordination and plan management are ‘intermediary’ supports in the NDIS that should support a participant to work towards their goals. The Government will move to a commissioned model, selecting support coordinators and plan managers from a government-vetted list.

• Spending target: A target to reduce spending in this area by 30 per cent.
• Plan management commissioning begins 1 October 2027 (with a six-month transition).
• Support coordination commissioning follows from 1 July 2028.

Provider impact:  A binary event: from late 2027 providers are either on the vetted panel or out of the market. A 30% spending reduction signals a smaller field of panel providers, larger contracted volumes per panel provider, and tighter unit pricing.

Supported Independent Living (SIL)

• Consultation will commence for a commissioning approach for SIL home and living supports.

Provider impact:  Open-market SIL is heading toward a commissioning model on the same logic as plan management and support coordination. Government concerns about both quality and provider viability will shape the design — early consultation engagement matters.

Module 3 — Early Childhood Intervention (ECI)

The Thriving Kids program will introduce supports for children aged 8 and under with developmental delay and/or autism with low to moderate support needs.

• Reduction of Module 3 participant budget allocation and therefore reduction in demand for Module 3 providers.
• Progressive roll-out from 1 October 2026, with full rollout of services by 1 January 2028.

Provider impact:  Module 3 providers face a structural reduction in addressable market. Children with low-to-moderate needs move out of the NDIS into Thriving Kids (delivered through early childhood education and care, Medicare, and state systems). Providers wanting to retain this cohort need to pivot toward Thriving Kids delivery channels.

Module 5 — Specialist Disability Accommodation (SDA)

Negative Gearing

Negative gearing refers to the situation where the expenses of an asset (including interest expenses) outweighs the income generated by it. Similar to other investment properties in Australia, SDA properties can be negatively geared, allowing investors to claim tax deductions on expenses such as loan interest, maintenance, and depreciation.

The Government will limit negative gearing to new builds from 1 July 2027, to focus tax support on new supply.

• Existing arrangements will remain unchanged for all properties held before the Budget night announcement (12 May 2026), and investors who buy new builds will still be able to deduct losses from other income.
• Investors who buy established housing after Budget night will still be able to deduct losses against residential property income. They will be able to carry forward unused losses to future years but won’t be able to deduct them against other income like wages.

Provider impact:  SDA investor appetite for established stock narrows — the tax benefit collapses to new builds for non-trust individual investors. Existing stock acquired before 12 May 2026 is grandfathered. SDA providers reliant on individual investor capital for new acquisitions should expect a shift toward greenfield development partnerships, build-to-rent vehicles, or institutional capital.

MAC (My Aged Care)

Support at Home

The Government is providing $389.8 million to accelerate the release of Support at Home packages.

Provider impact:  Demand will increase for Support at Home providers — more package releases brought forward into 2026–27. Providers with capacity to onboard new clients quickly will benefit; those constrained by workforce will need to plan for accelerated intake.

Residential Care

The 2026–27 Budget will provide investment to improve the pricing arrangements for residential aged care. These improvements will stimulate an increase in bed supply and protect equity of access for supported residents.

• The Government is investing $1.7 billion to incentivise construction of up to 5,000 aged care beds a year.
• Capital subsidies: $349.1 million over 4 years from 2026–27 to introduce targeted capital subsidies, available from 1 January 2027 for providers to encourage expansion and modernisation of existing homes. The subsidy comprises top-up payments of:
  
  • $30 per supported resident, per day, for newly constructed homes.
  • $15 per supported resident, per day, for homes that undertake a significant expansion in capacity.

Provider impact:  Residential providers with development pipelines get a materially better business case for new builds and expansions from 1 January 2027. The $30/day new-build subsidy stacks for up to 25 years; the $15/day expansion subsidy for up to 15 years. Providers without supported residents in their resident mix gain less.

Participant Contributions

The Government is committing $1 billion to fully subsidise and remove co-contributions for personal care services such as showering through the Support at Home program.

Provider impact:  The co-payment friction on personal care evaporates for Support at Home clients — expected to lift personal care utilisation rates and reduce billing disputes. Provider revenue per package becomes more predictable. Workforce demand for personal care workers tightens further.