NDIS Capacity Building Cuts: What Changes From October 2026?

If you have NDIS Capacity Building funding, the October 2026 changes deserve a closer look—but the headline that “Capacity Building is being cut” is too broad.

From 1 October 2026, the Australian Government is progressively reducing funding allocations for Improved Daily Living Skills, which is a Capacity Building support category, by 10%. Separately, budgets for Social, Economic and Community Participation supports will be reduced by 50%. These changes will be introduced progressively over 12 months as plans are created, reassessed or renewed.

That does not mean every participant will immediately lose 10% of their total NDIS plan, nor does it mean every Capacity Building category is being reduced.

The practical impact depends on the supports in your plan, your circumstances, your current level of funding and when your plan is reassessed or renewed.

What Is NDIS Capacity Building?

NDIS Capacity Building supports are designed to help participants develop skills, independence, confidence and capacity to work towards their goals. The Capacity Building budget includes several different support categories, including Improved Daily Living Skills, Improved Health and Wellbeing, Finding and Keeping a Job, Improved Relationships, Improved Learning, Improved Life Choices and others.

The October 2026 change specifically targets Improved Daily Living Skills rather than every Capacity Building category.

This distinction matters because a participant may have several Capacity Building supports in their plan, but the October reduction does not automatically apply to all of them.

What is included in Improved Daily Living Skills?

Improved Daily Living Skills can include assessment, training and therapy intended to help develop or increase a participant’s skills and capacity for independence and community participation. Examples can include relevant therapy and skill-development supports, depending on the participant’s circumstances and plan.

For example, a participant may use this type of funding for supports involving occupational therapy, psychology, speech pathology, physiotherapy or other appropriate interventions where the support meets the applicable NDIS requirements.

The specific support funded always depends on the participant’s individual circumstances and plan.

What Is Changing From 1 October 2026?

There are two major budget changes relevant to this discussion.

NDIS support area	Change from October 2026
Social, Economic and Community Participation	50% reduction in budget allocation
Improved Daily Living Skills	10% reduction in budget allocation

The Australian Government describes these as budget resets that will be introduced progressively rather than a single reduction applied to every participant on 1 October.

The Government has also clarified that a 50% or 10% reduction in a budget allocation does not necessarily mean a participant will spend 50% or 10% less. The actual effect depends partly on how much of the existing allocation the participant uses.

This is one of the most important distinctions for participants to understand.

Does this mean all Capacity Building funding is being cut?

No.

The October change does not apply to every Capacity Building support category.

The Government’s current guidance specifically identifies capacity building daily activities, referred to as Improved Daily Living Skills, as the Capacity Building area subject to the 10% budget reduction. Other supports and categories have different treatment under the reforms.

Therefore, it is better to review the individual support categories in your plan rather than assuming that your entire Capacity Building budget will fall by 10%.

When will the NDIS Capacity Building Reduction Affect Your Plan?

The timing depends on what happens with your plan.

For new and reassessed plans, the changes begin from 1 October 2026.

For participants whose plans are renewed rather than reassessed, the changes begin from 1 February 2027. The transition will continue progressively over a 12-month period.

This means there is not a single date when every participant’s funding changes.

For example, if your current plan remains in place until it is reassessed, you can generally continue using your existing plan and supports until that reassessment or renewal occurs. The Department of Health, Disability and Ageing states that participants will be notified before their plan reassessment or renewal.

A simple example

Imagine a participant currently has funding for Improved Daily Living Skills.

Their plan is reassessed after 1 October 2026.

The new funding allocation will be calculated under the updated arrangements. However, the participant’s entire NDIS plan is not simply reduced by 10%.

The change applies to the relevant support budget.

That distinction is particularly important when planning for therapy, skill development and other supports.

Which NDIS Supports Are Not Affected?

The reforms include safeguards for supports considered critical to participant safety, health and wellbeing.

Current government information states that the changes do not affect several areas, including:

• employment supports
• disability-related health supports
• support in the home for activities such as eating, drinking, dressing and toileting
• cleaning and community nursing care
• medication assistance
• home and vehicle modifications
• personal mobility equipment and transport
• consumables for incontinence and menstruation
• Specialist Disability Accommodation.

Some specific supports within the two affected categories are also excluded from the reductions. These include high-intensity supports, intensive and complex behaviour supports, customised and wearable technology, and hearing services, according to current Department of Health and Disability Ageing guidance.

The list is important because the phrase “NDIS cuts” can make the changes sound broader than they actually are.

What Happens to NDIS Community Participation Funding?

NDIS Community participation is another area receiving a significant funding reset.

From October 2026, the budget allocation for Social, Economic and Community Participation will be reduced by 50%. The Government says the reset is intended to bring average spending levels closer to 2023 levels and make them more consistent with other systems.

However, this does not mean every participant will automatically experience a 50% reduction in the amount they actually use.

A participant’s individual circumstances, existing plan and support needs remain relevant.

For example, someone who has a large unused allocation may experience a very different practical impact from someone who regularly uses most of their available funding.

What Should Participants Do Before Their Next Plan Review?

The best response is not to assume what your new funding will be.

Instead, prepare evidence showing what support you need, why you need it and what outcomes it helps you achieve.

Before your next reassessment or renewal, consider:

1. Review your current supports

Look at your current NDIS plan and identify which supports fall under:

• Improved Daily Living Skills
• Social, Economic and Community Participation
• Other Capacity Building categories
• Core Supports
• Capital Supports

This gives you a clearer picture of which parts of your plan may be relevant to the October changes. It can also help you distinguish Capacity Building supports from other NDIS-funded services, such as NDIS assistance with daily life, which may be funded under a different support category.

2. Document your actual support needs

Keep a record of the supports you use and the outcomes they help you achieve.

For example, rather than simply recording that you receive therapy, consider whether the support helps you:

• develop functional skills
• communicate more effectively
• manage daily activities
• improve independence
• participate in your community
• work towards a specific NDIS goal.

3. Gather relevant evidence

Where appropriate, reports or information from professionals involved in your support can help explain your functional needs and the role of a particular support.

Evidence should be relevant to your individual circumstances rather than simply arguing that funding should remain unchanged.

4. Think about outcomes, not just hours

A strong support plan should explain the relationship between:

Need → Support → Skill development → Outcome

For example:

A participant has difficulty navigating unfamiliar community environments because of disability-related functional limitations. Structured community participation support helps the participant practise travel, communication and navigation skills with the longer-term goal of greater independence.

That is more informative than simply stating that the participant needs a certain number of support hours.

What If Your Reduced NDIS Funding Is No Longer Enough?

The Government has confirmed that participants can request a plan change where there is a significant and ongoing change in circumstances or support needs.

Examples that may be relevant include changes to:

• ability to complete daily activities
• living arrangements
• education or employment circumstances
• available informal supports.

There is also a new plan variation pathway for eligible participants with high support needs who require 24-hour funded disability support. The pathway is designed to help maintain sufficient funding for safe 24-hour support.

This does not mean every participant whose budget decreases will automatically receive additional funding.

The appropriate pathway depends on the participant’s circumstances and the applicable NDIS rules.

Does the October 2026 Change Mean You Should Stop Using Capacity Building Supports?

No.

A reduction in a budget allocation should not automatically be interpreted as a reason to stop supports that are appropriate and beneficial.

Capacity Building supports can play an important role in developing skills and independence. The more useful question is whether the support is still appropriate, disability-related, aligned with the participant’s goals and contributing to meaningful outcomes.

For participants preparing for a plan reassessment, this makes it especially important to understand what each support is intended to achieve.

A support that is clearly connected to a participant’s needs and goals is easier to discuss than a generic request for additional hours.

How AAYDS Can Support Participants Through NDIS Changes

Navigating changes to NDIS funding can be difficult, particularly when different support categories are treated differently.

AAYDS provides personalised disability support in Moreton Bay and surrounding areas, including community participation and Supported Independent Living. Its services focus on supporting participants with community access, independence, daily activities and individual goals.

If your plan is approaching reassessment or renewal, reviewing your current supports and understanding how they contribute to your goals can help you have a more informed conversation with your support team and plan representatives.

For participants who require supported living arrangements, AAYDS also provides Supported Independent Living in Moreton Bay, with services including daily routines, skill development, community access and social participation.

Final Takeaway

The October 2026 NDIS changes are significant, but “NDIS Capacity Building cuts” is an oversimplification.

The specific Capacity Building reduction is a 10% reset to Improved Daily Living Skills budgets, while Social, Economic and Community Participation budgets face a separate 50% reduction. The changes will be phased in as plans are created, reassessed or renewed rather than applied to everyone on the same day.

For participants, the most useful step is to understand exactly which support categories are in their plan, document their current needs and outcomes, and prepare for their next planning conversation.

Most importantly, do not assume that a headline percentage tells you exactly how your individual NDIS plan will change.

Sources

1. NDIS — Changes to support budgets from 1 October — 17 September 2026.
2. Department of Health, Disability and Ageing — Funding changes for NDIS supports — September 2026.