In March 2026, AEIOU Foundation, one of Australia's longest-running specialist early intervention providers for autistic children, entered liquidation. All centres closed immediately, including a $5 million facility in Canberra that had been operating for less than three years.
Founder Dr James Morton attributed the collapse to steep NDIS funding reductions, telling media that average early intervention packages had fallen from approximately $50,000 to $60,000 per year in early 2024 to between $10,000 and $20,000 by mid-2025. Enrolments dropped from roughly 300 children to 120.
AEIOU is not an isolated case. It is the most visible casualty of a structural shift that is reshaping how allied health services are funded, delivered and accessed across the country.
Government reset targets NDIS growth
In his National Press Club address on 22 April 2026, Health and NDIS Minister Mark Butler laid out the scale of the reset. The NDIS was originally intended to support around 410,000 people. Today there are 760,000. Under the government's modelling, that number will be reduced to around 600,000 by the end of the decade, with spending growth capped at an average of 2 per cent annually over the forward estimates.
"The 'Thriving Kids' reform I announced here last year marked the beginning of our determination to re-set the Scheme to its original intent and keep the Scheme strong for those it was built for," Butler said.
The Thriving Kids program, agreed by National Cabinet and backed by $4 billion in funding, will progressively transition children under nine with low-to-moderate developmental delay or autism off the NDIS from 1 October 2026. Full implementation is expected by 1 January 2028. Those children will move into a state-commissioned model with new Medicare-funded allied health items instead of the open market of independent providers that most allied health practices currently depend on.
Butler was blunt about the broader market dynamics. "The scale and chaotic nature of the NDIS market is distorting other parts of the care economy," he told the Press Club.
For allied health providers, the implications are direct. More than 95,000 children currently receive support through the NDIS early childhood pathway alone. The providers delivering those services, predominantly occupational therapists, speech pathologists, physiotherapists and psychologists, face a market that is being deliberately compressed.
Why allied health practices built on NDIS referrals are starting from zero
Australia's allied health workforce has grown 67 per cent in recent years to approximately 300,000 registered professionals delivering more than 200 million health services annually. Occupational therapists alone saw 171 per cent workforce growth between 2013 and 2023. Speech pathology is projected to grow a further 35 per cent over the next five years.
Much of that growth was fuelled by NDIS demand. The scheme created a reliable pipeline of funded participants matched to providers through plan managers, support coordinators and NDIA pathways. For many practices, particularly those in paediatric early intervention, the NDIS wasn't just a revenue stream. It was the entire business model.
Casey Jones, Director of Medical Marketing Group, an allied health and medical marketing agency that works with more than 100 healthcare practices across Australia, says this created a generation of allied health practices that are clinically excellent but commercially invisible.
"It's like being a brilliant surgeon who never put a sign on the building. The skill was always there, but no one walking past knows you exist," Jones says. "The NDIS gave these clinicians a pipeline they never had to think about. Now that pipeline is being restructured and a lot of them are realising they have no idea where their next patient comes from without it."
Many of the smaller allied health practices now seeking marketing help for the first time have never spent a dollar on it in their entire history. They've run on word of mouth and support coordinator referrals, and their entire marketing presence, online and offline, is either bare bones or non-existent.
Research underlines the cost of that gap. Fifty-four per cent of Australian patients check a provider's Google reviews before booking. Seventy-seven per cent say they are more likely to choose a practice rated four stars or above. Among 18 to 34 year olds, the parents most directly affected by Thriving Kids, those figures rise to 81 per cent and 92 per cent.
"A lot of people in marketing will tell you to dumb your language down to match what patients search for. I think that's wrong," Jones says. "When a parent is looking for help with their child, they want to feel like they've found the best. Clinical authority, professional language, a practice that looks and sounds elite. That's what builds trust. The job of the marketing is to get them to the door. What they see when they arrive needs to make them feel like they're in the right place."
Three NDIS changes hitting allied health practices in 2026
The Thriving Kids transition is not happening in isolation. Allied health providers are absorbing multiple structural changes within the same 12-month window.
Since 1 July 2025, allied health professionals can only claim 50 per cent of their hourly rate for travel time under NDIS pricing arrangements. For mobile practitioners who built their model around visiting homes, schools and childcare centres, this represents a direct revenue reduction on every appointment that requires travel.
From 1 July 2026, payday superannuation takes effect, requiring employers to pay super at the same time as wages rather than quarterly. For practices with multiple employees, the shift from quarterly to per-pay-period creates a cash flow adjustment that many have not budgeted for.
Differentiated pricing is also being progressively introduced, creating separate rate structures for registered and unregistered providers. Around 90 per cent of allied health therapy providers working with NDIS participants are currently unregistered, yet they represent approximately 38 per cent of total NDIS payments. The pricing changes are producing a two-tier market: providers who operate within NDIS price limits and those who charge above them, serving self-managed participants willing to cover the gap.
Butler's Press Club address added further pressure. The government will reduce spending on plan managers and support coordinators by 30 per cent, with commissioned models replacing current arrangements from October 2027. For allied health practices that rely on support coordinator referrals as their primary source of new patients, that pipeline is also being restructured.
In the ACT alone, more than 12,400 people are on the NDIS. Allied health practices across Canberra and surrounding regional NSW that serve paediatric participants face the same calculus as their counterparts nationally, but with fewer alternative referral sources to fall back on if commissioned panel spots go to larger organisations.
Jones describes it as a series of individually manageable changes that become something else entirely when they arrive together.
"A travel cap on its own? You restructure your schedule. A super change? You adjust your cash flow. But when they all land in the same year as Thriving Kids, the practices most at risk are the ones carrying fixed costs they can't unwind quickly. Commercial leases with years left. Employees on contracts. An overhead structure sized for a revenue base that might be half of what it was."
Allied Health Professions Australia has warned that the sector "will feel this directly" as access tightens and plans become smaller. CEO Bronwyn Morris-Donovan has said that "with more than half the allied health professions in national workforce shortage," the sector cannot afford to lose providers to business model failure at the same time it is trying to expand access. AHPA's position is that reform must ensure "pricing reflects the true cost of care" while "preserving the workforce that makes the Scheme work."
"The devil is entirely in that detail," the organisation said in its response to Butler's Press Club address.
What happens when the funding model changes and the patients stop coming
The maths is straightforward. The NDIS is moving from 760,000 participants toward 600,000. Spending growth is being capped at 2 per cent. Plan values in key categories are being reset to 2023 levels. Support coordinator referral pipelines are being cut by 30 per cent.
For allied health practices that built their business entirely on NDIS-funded participants, the question is no longer whether they need to diversify their patient base. It is whether they can do it fast enough.
Butler framed the broader trajectory at the Press Club: "If we wait, if we hang back, if we imagine that hard choices can wait for easier times, then the decision will simply be taken out of our hands."
The same urgency applies at practice level. Jones says too many allied health practice owners built their businesses on a funding model, not a patient acquisition strategy, and are now asking the same question for the first time: how do I get patients who aren't coming through the NDIS?
The Thriving Kids rollout begins in October 2026. State-run services will progressively replace the current NDIS early childhood pathway, with full transition expected by January 2028. The exact structure, pricing and provider panel arrangements vary by state and territory and are still being finalised, adding to the uncertainty for providers trying to plan ahead.
Jones, whose agency has specialised in allied health marketing for over a decade, says the practices that navigated earlier NDIS pricing changes successfully share one thing: they invested in building their own commercial visibility before the policy forced them to, not after.
"The practices that move now will be established, visible and generating their own patients by the time Thriving Kids fully takes effect. The ones that wait will be scrambling for the same patients in a market where their competitors already have a two-year head start. That's not a gap you close easily. In some cases, you don't close it at all."
Casey Jones is the Director of Medical Marketing Group, an Australian agency that has specialised in allied health marketing and digital strategy for healthcare providers for more than a decade. The firm works with more than 100 healthcare practices across Australia, including occupational therapy, speech pathology, physiotherapy and psychology practices, GP clinics, and specialist medical providers.
Disclosure: Jones' agency provides marketing services to allied health providers, some of whom may be affected by the NDIS changes discussed in this article.
