Australia is currently failing more than 130,000 people with significant psychosocial disability, despite annual expenditures of billions through the National Disability Insurance Scheme (NDIS), according to a new report titled “Bridging the gap: Meeting the needs of Australians with psychosocial disability”. The report, authored by Sam Bennett, Mia Jessurun, and Reilly Polaschek, highlights a critical gap in support where 130,000 adults with the greatest needs are receiving nothing from either the NDIS or the broader mental health system.

Last year alone, the NDIS provided nearly $6 billion to support approximately 66,000 people with psychosocial disability. However, thousands of Australians who need help but do not meet the scheme’s eligibility threshold are stranded without the necessary supports.

The consequences of this gap are significant, fuelling a growing problem where people without adequate support are more likely to experience homelessness, hospital admissions, or have their needs escalate, adding intense pressure to already strained systems. For individuals deemed ineligible for the NDIS, access to support is currently described as a “postcode lottery,” resulting in patchy, underfunded, or non-existent services necessary for a better life. The personal, social, and economic costs of this failure include reduced quality of life, fewer opportunities for community participation, and lost productivity.

The Grattan Institute report urges reform, proposing an integrated system of psychosocial support where the NDIS works alongside a broader range of non-NDIS services. Crucially, the authors contend that this gap can be closed without spending any additional public money. This would be achieved by redirecting some NDIS funds to ensure all Australians can access help, regardless of whether they are in the scheme or where they live.

Rebalancing the system to ensure stronger recovery-oriented supports are available both inside and outside the NDIS would transform the lives of Australians with psychosocial disability and make better use of existing funds.

The report recommends a four-pronged plan to bridge the support gap:

1. Establish a new National Psychosocial Disability Program outside of the NDIS. This program would be funded within existing contributions to the scheme and provide support for the 130,000 adults identified as having the most significant needs.
2. Deliver consistent services nationwide, expanding access to individual support facilitation and a broader array of recovery-oriented psychosocial supports.
3. Direct Primary Health Networks (PHNs) to lead regional planning, commissioning, and coordination, thereby balancing national consistency with necessary local flexibility.
4. Make federal, state, and territory governments jointly responsible and accountable for designing and delivering the program.

These reforms, all implemented within the current NDIS budget envelope, are expected to create a fairer and more effective system to better meet the needs of Australians with psychosocial disability.