Sweeping reforms to the National Disability Insurance Scheme have passed the Senate after the Albanese government and the Coalition struck a last-minute deal on Tuesday night, with the bill clearing the upper house 28 votes to 12 despite fierce opposition from disability advocates and the Greens.
The legislation, which the government has been pursuing since April, is designed to rein in rapidly growing NDIS expenditure and is projected to deliver $37.8 billion in savings by the end of the decade. The package includes sweeping new ministerial powers and significant cuts to social and community participation funding.
Sixty-Three Amendments Added Hours Before the Vote
In a dramatic lead-up to the final vote, the government tabled 63 last-minute amendments earlier on Tuesday in response to mounting community concern. Among the most significant changes, Australians with severe disabilities who require constant care will now have the right to appeal ministerial decisions affecting their funding. Participants will also be able to request variations to specific sections of their support plans, including assistance with daily living.
However, community and social participation funding — which helps people with disability access social connections, medical appointments and employment — will remain excluded from the appeals process, a decision that drew sharp criticism from advocates.
The amendments also introduce tougher penalties for NDIS providers caught receiving kickbacks, along with dedicated whistleblower protections. NDIS Minister Jenny McAllister said the changes would establish "tough new aggravated integrity offences", including obtaining funds through deception, providing false or misleading information, and intentionally destroying records.
The Deal: NDIS Reforms Tied to a 'Widow Tax' Fix
The bill's passage through the Senate was ultimately secured through a political trade-off largely unrelated to disability policy. The Coalition agreed to support the NDIS legislation in exchange for the government moving early on the removal of a so-called widow tax — a loophole buried in federal budget reforms that would have seen divorcees and widows lose negative gearing entitlements on investment properties.
Treasurer Jim Chalmers had previously flagged plans to close the loophole but had not intended to bring the legislation before Parliament until later in 2026, with public consultation on the draft bill not scheduled to conclude until this Friday. Pressure on the government to act sooner intensified after independent senator David Pocock revealed he had been contacted by a domestic violence survivor who said she had been denied financing on a property because of the loophole. The tax reforms were ultimately grandfathered as part of the agreement.
With the NDIS package stalled in the Senate, the government's projected budget savings were being eroded with each passing day — adding urgency to finalising a deal, despite Chalmers having earlier argued there was no immediate rush given the changes would not take effect until July 2027.
Greens Condemn the Deal as an Attack on Disabled Australians
The Greens were scathing in their response, with disability spokesperson Senator Jordon Steele-John — who lives with a disability — condemning the manner in which the legislation was passed. He accused Labor and the Liberals of bypassing community safety and dignity to reach a deal.
"Labor and the Liberals got together in a room, and they decided to strip us of our rights, regardless of our safety and dignity," Senator Steele-John said. He also argued that tying the NDIS reforms to an unrelated tax measure had effectively reduced disabled Australians to a political bargaining chip.
Advocates outside the chamber echoed those concerns, with critics warning the cuts — particularly to community participation support — could prove fatal for some of the scheme's most vulnerable participants. The bill passed with little debate once the deal was locked in, despite the gravity of the changes it contains.
The reforms represent one of the most significant overhauls to the NDIS since its inception, and come as the Albanese government faces scrutiny over a range of contentious policy shifts heading into the latter half of 2026.
