A new report from the Grattan Institute highlights a major gap in support for Australians with psychosocial disability. While the NDIS spends nearly $6 billion each year supporting around 66,000 people with psychosocial needs, the report says more than 130,000 adults with the most significant needs receive no support at all—neither from the NDIS nor from the broader mental health system.
According to the report, this lack of support increases the risk of homelessness, hospital admissions, and escalating mental health needs, placing added pressure on already stretched services. The authors argue that this gap is not due to a lack of funding, but rather to how funding is structured and accessed. People who are deemed ineligible for the NDIS often face inconsistent, underfunded, or unavailable services depending on where they live.
The report recommends rebalancing existing NDIS funding to create a more integrated system. Proposed reforms include a new national psychosocial support program outside the NDIS, consistent services nationwide, stronger regional coordination, and shared accountability across governments—aimed at delivering fairer, more effective support without increasing overall costs.