By Therapy Near Me | July 2025
Sweeping reforms to the National Disability Insurance Scheme (NDIS) are expected to result in the reduction or removal of several programs in 2025. These changes are part of a broader cost-saving strategy aimed at limiting annual expenditure growth to 8% (NDIS, 2025a). However, many participants, especially those with psychosocial disabilities and mental health conditions, may be disproportionately affected.
Keywords: NDIS cuts 2025, NDIS mental health programs axed, psychosocial supports reduced, NDIS allied health changes, NDIS pricing review, travel funding NDIS 2025, core funding vs capacity building, mental health therapy NDIS, art therapy NDIS cancelled, rural access NDIS.
1. Cuts to Allied Health Services
From 1 July 2025, the NDIS will remove flexibility in funding allied health supports from Core budgets, requiring them to be paid from the Capacity Building category instead. This change affects services such as psychology, occupational therapy, and speech pathology (Keocare, 2025).
Simultaneously, travel reimbursements for allied health providers have been cut by 50%, resulting in reduced service availability in regional and remote communities (OTA, 2025). These reductions may lead to increased service gaps, especially for participants requiring in-home mental health therapy.
2. Art and Music Therapy Devalued
The 2025–26 NDIS Pricing Arrangements significantly reduce the hourly rate for individual art and music therapy to $68 unless functionality evidence is provided. This move has been described as undermining the therapeutic benefits of creative modalities, particularly for participants with psychosocial disabilities and neurodivergence (Dempsey, 2025; NDIA, 2025).
3. Shift from Core to Capacity Building
The shift of funding for allied health supports from the Core budget to the Capacity Building category is intended to clarify pricing structures and reduce misuse. However, this creates confusion and limitations for participants who previously used their Core funds flexibly for essential therapies (Keocare, 2025). The change is also expected to increase the administrative burden on support coordinators and plan managers.
4. Reduced Travel Funding and Rural Impacts
Rural and remote participants are facing greater challenges due to travel funding reductions. Allied health providers are reducing outreach services, with some ceasing regional operations entirely due to unviable reimbursement levels (Martin-Cole, 2025). This disproportionately affects individuals with mobility or transport barriers, including many with complex mental health needs.
5. Psychosocial Supports Likely to Be Downgraded
The Federal Government has outlined a strategy to divert up to 27,000 potential future participants with psychosocial disabilities to other programs, potentially limiting their access to individualised support under the NDIS (ABC News, 2023). Mental Health Australia (2025) warns that this will leave many without appropriate care, particularly those with dual diagnoses or fluctuating capacity.
Wider Implications for Mental Health
These program cuts raise serious concerns for continuity of care and equitable access to mental health services under the NDIS. For individuals relying on regular therapeutic input—such as psychological counselling, behavioural support, or community engagement—the 2025 reforms could result in reduced frequency or complete service withdrawal.
Providers have also reported increased financial strain and burnout, with over 80% of allied health professionals citing unsustainable conditions under the revised pricing model (Nacre, 2025).
What Participants Can Do
- Review plans before July 2025 to ensure adequate Capacity Building funding is allocated.
- Work with support coordinators to advocate for therapy services and justify their functional impact.
- Consider telehealth options, which may remain viable under reduced travel reimbursement.
- Document outcomes to support continued funding requests for psychosocial supports.
- Engage with advocacy groups to ensure your voice is heard in future reforms.
References
ABC News (2023) NDIS future for people with psychosocial disability uncertain as government outlines new reforms. [online] Available at: https://www.abc.net.au/news/2023-06-28/psychosocial-disability-ndis-future-inclusion/102534200 [Accessed 17 Jul 2025].
Dempsey, R. (2025) ‘Devastating consequences’ as NDIS changes threaten access to art and music therapy. The Daily Telegraph, 15 May. Available at: https://www.dailytelegraph.com.au/news/nsw/devastating-consequences-outrage-as-ndis-changes-threaten-access-to-art-and-music-therapy/news-story/0d156b3df6deb471a160281aac1b63c7 [Accessed 17 Jul 2025].
Keocare (2025) Countdown to Change: Core Funding Flexibility Ends for Allied Health. [online] Available at: https://www.keocare.com.au/countdown-to-change-ndis-core-funding-flexibility-for-allied-health-ends-june-2025/ [Accessed 17 Jul 2025].
Martin-Cole, A. (2025) ‘Rural therapists cancel services amid NDIS travel reimbursement cutbacks’, Psychology Australia, 1 July.
Mental Health Australia (2025) NDIS reforms will widen the service gap for people with mental illness, [media release], 12 June.
NDIA (2025) 2025–26 NDIS Pricing Arrangements and Price Limits. [online] Available at: https://www.ndis.gov.au [Accessed 17 Jul 2025].
NDIS (2025a) Quarterly Report to Disability Ministers – March 2025. [online] Available at: https://www.ndis.gov.au/news/10718-ndis-quarterly-report-published-march-2025 [Accessed 17 Jul 2025].
Nacre (2025) Allied Health Viability under the NDIS – Sector Report, April 2025.
OTA (2025) Joint Statement: NDIS Price Reductions for Allied Health Will Impact Clients and Communities. Occupational Therapy Australia. [online] Available at: https://otaus.com.au/news/allied-health-ndis-price-cuts-joint-public-statement-2025 [Accessed 17 Jul 2025].
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