NDIS pricing reform 2026-27: Key changes for providers

 RSM insight 

While structurally consistent, the updated rates embed incremental cost increases rather than any substantive reform, meaning providers continue to operate under tightening margin conditions, particularly in supported independent living (SIL) and registered providers service models that carry higher overheads.

The APR recommends that the NDIS disability support worker cost model be reviewed to consider if the model’s structure and wage settings are appropriate for the contemporary labour and market conditions. There are several pilots underway with providers, which will evidence more information about operating and market conditions and costs, and contribute to this review.

The market is showing a divergence of scale and structure between registered and unregistered providers. Registered providers are more likely to be larger companies while unregistered providers constitute a significant proportion of sole traders. Both market segments have increased payments respectively by 15% and 12% over the past six months, showing solid growth. 

 RSM insight 

This reform realigns STA from a holistic respite experience to a strictly disability-support-funded service, consistent with legislative principles of “reasonable and necessary” supports.

The price limit changes represent a material reduction in funding for activities, food and experience-based components of the service, with costs shifting back to participants and families. Early discussion with our clients indicates that this will drastically shift the STA / STR options available across the market, as many participants and families do not have the capacity to fund the out-of-pocket gap expenses for meals and activities. 

 RSM insight 

The NDIS approach to benchmarking market pricing will place a higher emphasis on each discipline’s MBS and PHI market rate performance. Those disciplines with an organised and systemic approach to service pricing across sectors will benefit.

The NDIA will track and analyse all fee information, and this may influence more appropriate plan budget setting. NDIA usually calculate therapy plan funding without regard for travel or other costs – usually it is based solely on a set number of face-to-face appointments. Once the NDIA has benchmarked data, this could be used to improve and inform plan budgeting.

However, there is a future risk that the breakdown of service types may result in pricing reduction pressures for non-face-to-face services deemed more administrative (similar to travel), so disciplines will need to ensure that indirect service quality remains a priority and consider how these categories can be applied with clinical governance and guidance, so they can be effectively utilised, justified and budgeted.

Previously bundled costs must now be explicitly justified and claimed, and this of course adds complexity to administrative processes for therapy providers – impacting service agreements, billing and claiming. Service agreements are a critical requirement to outline the charging structure and inclusion of other service line items.

 RSM insight 

This will mean the real price erosion will be an ongoing issue for support coordination, and we would expect providers will be faced with significant sustainability pressures.

The APR argues that there is no price increase is required due to the market conditions.

• A key issue facing support coordination is market saturation – growth in the sector continues to be driven by new market entrants rather than expansion of existing providers. The market is characterised by a high volume of low-scale providers competing for a funding pool that is increasingly constrained. More than 5,000 providers support five or fewer participants, with 3,000 providers supporting a single participant. In contrast, a relatively small number of larger providers account for a substantial proportion of total support coordination activity.
• The APR states that that support coordination is a function created exclusively for the NDIS and has no meaningful external benchmarks.
• The APR suggests that provider sustainability challenges are being driven more by market structure, fragmentation and participant demand settings than by the regulated hourly rate itself. 

 RSM insight 

Plan management remains one of the largest and most mature NDIS provider markets, with approximately 65% of active participants utilising a plan manager and more than $13bn in participant payments flowing through the sector annually. The APR notes that the market is relatively concentrated, with a small number of larger providers processing the majority of transactions, while many providers have diversified their business models by offering additional NDIS services alongside plan management. This reflects the increasingly transactional and administrative nature of the service, where scale, workflow automation and technology-enabled processing have become key determinants of financial performance.

The recommended monthly fee of $104.45 signals the NDIA's view that plan management should be priced according to the administrative effort required to process claims and manage participant funding, rather than broader labour market pressures. The NDIA has also foreshadowed a review of the plan management pricing framework, specifically questioning whether current pricing appropriately reflects how services are delivered in practice. This suggests future pricing reforms may place greater emphasis on transaction volumes, automation capabilities and efficiency measures, rather than a flat monthly fee model.

This should also be considered alongside NDIS recommendations to commission plan management services and introduce provider panel arrangements, which may influence future pricing structures, provider participation requirements and market concentration.

For providers, this creates a number of implications:

• Margin growth is unlikely to be driven by future price increases, meaning sustainability will increasingly depend on operational efficiency, scale and digital capability.
• Providers with low scale, significant manual processing requirements or high overhead structures may find it increasingly difficult to remain commercially viable at current fee levels.
• There is likely to be continued consolidation within the sector as larger providers leverage technology platforms, workflow automation and purchasing scale to reduce processing costs and improve profitability.
• In this environment, the competitive advantage for plan managers is likely to shift away from price and toward participant experience, timeliness of payments, financial reporting capability, and the ability to support participants in navigating an increasingly complex NDIS environment. 

 RSM insight 

This proposed cut to unregistered fees is directly addressing the structural differences in business costs between registered and unregistered providers, and the divergence of the market segments, where unregistered providers constitute a significant number of sole traders, and registered providers are characterised by a significant proportion of larger companies.

This is a clear market signal to incentivise registration, promote market exit of unregistered providers and promote service model restructuring. This price change also places pressure on the margins for sole traders, who are often able to achieve higher margins due to lower overhead costs of the business structure.

Importantly, the APR acknowledges the additional costs of registration for businesses, including governance, audit fees and ongoing compliance obligations, such as reporting, which is positive.

This price restructure may also create unintended consequences and significant challenges for the sector:

• Tiered pricing by registration type may be challenged under competition law and cause confusion with the NDIS Code of Conduct fair pricing requirements. This change also relies heavily on the current legislation being passed, which proposes for pricing to be placed under Ministerial discretion.
• While the APR argues price is not the key factor for participants in exercising choice and control over services, forcing a reduced price for unregistered supports may incentivise some participants to use unregistered providers due to the lower pricing offered and the ability to have more support hours for their budget. Registered providers would be unlikely to reduce costs to compete with unregistered services – while market demand remains strong, the pressure on margins is high, with surveys from National Disability Services members indicating nearly three quarters of providers are making a loss on NDIS services.