Means testing the National Disability Insurance Scheme (NDIS) has been suggested as one method to reduce the scheme’s costs to government. In this research note, we use linked administrative data to estimate impact on recipients and the government’s bottom line of applying a pension-style means test to the NDIS.
We find that:
- NDIS spending is highly concentrated among participants with little capacity to pay. 87 per cent of adult NDIS spending goes to participants who receive the Disability Support Pension, a payment that is already income- and asset-tested.
- An income-based means test would essentially remove 40% of participants from the scheme yet reduce total government NDIS spending by only around 12 per cent ($4.5 billion in FY2024).
- Around $3.5 billion of the $4.5 billion saving comes from participants aged 0-17, representing 60 per cent of that age group’s current spending.
Most of the estimated savings come from child participants, whose government contribution is assessed against parental income. If Thriving Kids and other eligibility reforms affect the same participants, fewer participants will be subject to means testing than assumed here. These estimates also exclude workforce disincentives or other behavioural responses that may occur because of means testing.
You can also explore the data further via e61’s tax and transfer calculator: https://e61.in/e61-ndis-and-disability-income-calculator
