What Providers Need to Know About the New PACE Funding Structure

Effective from 19 May 2025 for participant new plans, the National Disability Insurance Agency (NDIA) is rolling out significant changes to how participant funding is structured. These updates, part of legislative reforms under Section 33 of the NDIS Act, will be delivered through the new PACE system — and they directly impact how you, as providers, manage service delivery and claims.  

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 for a participant’s NDIS plan.

• Funding Components - the total funding will be split across key support categories, such as Core, Capacity Building, Capital, and Recurring supports — reflecting the types of services participants may access..  

• 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 revised funding structure has been developed to: 

• Improve financial oversight and reduce fraud risks by preventing misuse of large, upfront fund allocations. 

• Support better budgeting for participants by breaking funding into manageable periods. 

• Enhance service planning by ensuring provider agreements align with expected fund availability. 

• Leverage the capabilities of the PACE system. 

How This Affects You as a Provider 

These changes will impact how you plan and deliver services: 

• Service Agreements: You’ll need to ensure that your agreements align with the participant’s funding periods. Planning services around these timeframes will help maintain continuity and avoid claim rejections. 

• Invoicing and Claiming: Claims must match the funding available within each set period. If a claim exceeds the available funds, it will be rejected in full. Providers will need to adjust and resubmit claims accordingly — making timely invoicing critical. 

• Participant Access and Planning: Participants will only be able to use funds that are available in their current period. While unused funds will roll over, understanding the pacing will be essential when coordinating supports. 

• Longer Plan Durations: Plans may now extend beyond the traditional 12-month duration. This can support longer-term planning but will also require flexibility in your service delivery models. 

PACE System Enhancements 

The PACE system is upgraded to support these legislative changes with features including: 

• Detailed Funding Visibility – See breakdowns by support category and funding period. 

• Automated Fund Releases – Funds are scheduled for release to support smoother cash flow management. 

• Enhanced Claim Validation – Claims will only be accepted if they align precisely with available funds and timeframes. 

Final Thoughts 

These updates are a significant shift in how NDIS plans are structured and how providers engage with them. Although only new plans from 19 May 2025 onwards will follow this model, understanding the system now will help you support your clients more effectively and avoid future disruptions. 

We recommend reviewing your current service agreements, updating your internal invoicing systems, and ensuring your team is familiar with the PACE system. 

For more detailed information on these changes, you can refer to Summary of legislation changes and Your plan.