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Strategies for Avoiding Underspending & Using your NDIS Plan Effectively

Are you concerned about potential funding reductions due to underspending? You’re not alone. Many NDIS participants find themselves underspending their allocated funds during each plan period for various reasons. This guide will help you understand why you might be underspending, what the NDIS will do in response, and how to use your funding more effectively.

Two men working on a laptop at a desk.
Two men working on a laptop at a desk.

Why might you be underspending?

Occasionally, underspending on your NDIS plan is unavoidable. If you find you are underspending, it’s essential to identify the reasons behind it. Common reasons include:

  • Uncertainty about utilising your funding

  • Saving funds for emergencies

  • Changed circumstances that reduce the need for funding

  • Difficulty finding service providers or facing location-based limitations

  • Illness preventing therapy completion

  • Unavailability of high-cost AT items for which you were funded

  • Support provided by family members

Will the NDIS reduce your funding if I don’t use it all?

Approaching the end of your plan with underspent funds doesn't necessarily mean the NDIS will reduce your funding for the next plan. The NDIA should carefully consider each new plan, reviewing the provided evidence, and base your funding on your reasonable and necessary needs rather than the amount spent in your previous plan.

If the NDIA reduces your funding because you have not fully utilised your previous funds, you can request a review. Be sure to provide as much evidence as possible, sharing any reasons why you couldn't use your allocated funding.

How can you use your funding more effectively?

To maximise your funding and avoid underspending, consider these tips:

Tip #1: Break down your funding

Your NDIS plan funding should cover the costs of supports and services throughout the plan period. Allocate a portion of each budget category to the required supports and services to prevent overspending or underspending. Divide the funding according to your preferences, either by month, fortnight, or week.

For example:

If your Core Supports funding is $18,000 for a 12-month (52-week) plan and you want to know your weekly spending limit, divide the total by the number of weeks.

18,000 ÷ 52 = $346.15 per week.

If your supports cost $57.10 per hour, you can access 6 hours of support per week.

Don't worry if the calculations seem overwhelming! Our First2Care support team is here to help you break down your budgets and track your funding.

Tip #2: Monitor your spending

Even with a plan manager handling financial and administrative tasks related to your plan funding, it's beneficial to keep track of your spending and budgets. Our First2Care portal provides real-time budget updates and monthly budget reports. Log in anytime for your funding updates.

Tip #3: Plan for high-cost AT purchases

Expensive items, like high-cost AT and home modifications, may take time to process and purchase. If you have funding for these items, give yourself enough time to compile reports, obtain quotes, schedule installation, or wait for delivery.

What else can you do?

When in doubt, contact our support team to talk through your plan options. We’re here to provide support and guidance on using your plan funding effectively.

Remember, if you have underspent on your plan funding, discuss the reasons why this occurred with your LAC or NDIA planner during your plan reassessments.

Learn more about the benefits of working with an independent, professional Plan Manager. Alternatively, reach out to our friendly team at 1300 322 273 or


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