Health Minister Mark Butler unveiled sweeping changes to the scheme on Wednesday that will include 160,000 people being kicked off.

Major NDIS overhaul to cut 160,000 participant

Health Minister Mark Butler has warned “very serious organised crime” has infiltrated the NDIS as the government moves to overhaul the scheme.

The Australian Criminal Intelligence Commission has warned crime within the NDIS has become systemic, with organised crime groups exploiting the scheme for profit.

The warning comes just a day after sweeping reforms to the NDIS were unveiled by Butler.

The changes will see more than 160,000 participants removed as the government attempts to rein in costs and tighten oversight.

Butler said the scale of unchecked spending had left the system exposed, with hundreds of thousands of claims being processed daily without proper scrutiny.

“Right now, 600,000 claims every day are being processed by the NDIS without evidence of the merit of the claim in the first place or who the money is going to end up going to. That’s got to stop,” he told Sunrise on Thursday.

Butler said much of the problem involved “small-time crooks” exploiting the system, but warned there were also “very serious” cases of organised crime.

To combat fraud, the government will introduce a new digital payment system requiring both providers and recipients to be registered on a monitored platform that tracks where funds are going.

“Anyone who wants to receive money from the NDIS will have to be on a digital payment system that gives us a line of sight as to where the account is and who it’s owned by,” he said.

The measures form part of a broader overhaul aimed at cutting $35 billion in costs by 2030, with participant numbers to be capped at around 600,000 and all current recipients to be reassessed under strict eligibility rules.

Butler defended the scale of the reset, warning the long-term future of the scheme depends on urgent reform.

“What I tried to do yesterday was really sound the alarm that the future of the NDIS is really at stake here,” he said.

“We’ve not been able to get those costs under control. There are people on the scheme who weren’t intended to be on the scheme, with relatively low to moderate support needs. And they’re on the scheme because there’s nothing else for them out there.”

The minister acknowledged the changes would be significant, but said they were necessary to ensure support remained available for those who need it most.

“I wish I could say no change is required or no significant change. But the truth is, if we don’t reset this scheme, its future is at risk, and it won’t be there in years to come for people with disability,” he said.

Butler said governments had been working toward the changes since 2023, with $10 billion committed to building alternative support services for people who no longer qualify for the NDIS.

The plan has already drawn criticism, with Queensland’s Disability Services Minister Amanda Camm warning the federal government risked shifting responsibility onto the states, arguing those pushed off the scheme would still need support elsewhere.

“All state governments, territories, and the commonwealth recognise this is a shared responsibility. Yes, there’ll be a bit of politics, but I think the community just wants governments to get on it. They recognise the NDIS has gone off track, and I think they expect governments to work together,” he said.

“We’re not trying to duck-shove this to states, we recognise this needs to be done in partnership with them and with the disability community.”