How Your NDIS Funding Will Change Under the New PACE System
- First2Care Team
- 2 hours ago
- 2 min read
The National Disability Insurance Agency (NDIA) has implemented significant changes to the funding structure of plans, which came into effect on 19 May 2025. These changes, introduced under Section 33 of the NDIS Act, will be implemented through the new PACE system.
What’s Changing?
Section 33 of the NDIS Act outlines the principles for preparing and managing participant plans. Under the updated legislation, new plans approved from 19 May 2025 onwards will include:
Total Funding Amount - the overall budget allocated to your plan.
Funding Components - the total funding will be split across key support categories, such as Core, Capacity Building, Capital, and Recurring supports.
Funding Periods - funding will be released in set timeframes, not all at once. These periods determine when and how much funding becomes available for use. The default funding periods are:
General Supports: Quarterly (every 3 months)
Home & Living Supports: Monthly (every 1 month)
This new model introduces a more structured approach to distributing funding throughout the plan’s duration.
Why It Is Changing
The NDIS have advised the revised funding structure has been developed to:
Improve financial oversight and reduce fraud and/or risks by preventing misuse of large, upfront fund allocations.
Support better budgeting for participants by dividing funding into more manageable periods.
Enhance service planning by ensuring provider agreements align with expected fund availability.
Leverage the capabilities of the PACE system.
How It Affects Participants
Plan Duration: New plans may extend beyond the existing conditions of 12-month periods, allowing for more flexible and longer-term support arrangements.
Access to Funds: Funding will only be accessible within their designated funding periods. Unused funds will roll over to the next period.
Service Agreements: Agreements with service providers should align with the specified funding periods
Claim Submissions: The NDIA has communicated that claims must align with the available funds within each specific funding period. If a claim exceeds the available funds, it will be rejected in full and must be resubmitted for an amount that fits within the amount available. It is critical that your providers submit their invoices in a timely manner.
PACE System Enhancements
The PACE system is upgraded to support these legislative changes with features including:
Enhanced portal access allowing participants to view detailed funding breakdowns, spending history, and available amounts by funding period.
Automated, scheduled release of funds according to funding periods for consistent budget management.
Stricter claim validation rules to ensure claims match available funds and funding periods.
Final Thoughts
The updates to Section 33 and the enhancements to the PACE system mark a significant shift in the way NDIS funding is structured and managed.
While the new structure will apply to plans approved from 19 May 2025 onwards, it’s important for participants to understand how the changes work and prepare accordingly. Existing plans will continue under the current arrangements until they are reassessed. To support a smooth transition, the NDIA will provide guidance and resources.
If you have questions about your plan or funding, contact the NDIA directly or speak with your plan manager or support coordinator.
For more detailed information on these changes, you can refer to Summary of legislation changes and Your plan.
