Federal Budget 2026-27
Explainer: What does the Budget mean for you?
On Tuesday, 12 May, the Australian Government handed down its Federal Budget for 2026-2027. It included major cuts to the NDIS and disability education supports, as well as some youth-related investment in areas like employment, health and safety.
But what do its measures mean for children and young people with disability, and their families or caregivers? CYDA has developed a Federal Budget Explainer to provide an overview of specific budget measures and how they may impact you.
⚠️ Content note: this page references violence, abuse, discrimination, loss of supports, and child sexual abuse.
Read the Explainer
This document, Explainer: Federal Budget 2026-27, breaks the Budget up into key topic areas: NDIS, Thriving Kids, Education, Employment, Health, Safety, and Other Funding.
National Disability Insurance Scheme
A headline focus of this Budget is slowing the growth of the NDIS by making major cuts to spending and bringing down the number of participants on the Scheme by roughly 160,000 people.
With more than one in two (52%) participants aged under 18, this may significantly impact how and where children and young people access supports.
Key measures include:
- Reducing funding by $37.8bn over four years
- $1.7bn for spending on NDIS reforms over five years
- $200m for spending on an Inclusive Communities Fund
Thriving Kids
The Australian government’s Thriving Kids program, announced in August 2025, is meant to be an alternative to the NDIS for some children with developmental delay and autism under nine. States and territories will begin to roll out these supports from October 2026.
This year’s Budget includes $2 billion in funding for the program, to be divided between the Federal and state and territory governments over the next five years.
Key measures include:
- $1.4bn for spending on state and territory implementation
- $600m for spending on Federal measures
Education
A lack of a truly inclusive education system remains one of the biggest issues facing children and young people with disability.
Many experience discrimination, exclusion, and barriers to participation at schools, universities, in childcare, and elsewhere.
This year’s Budget includes a mix of measures affecting education and early childhood supports for children and young people with disability.
Key measures include:
- Reducing disability school funding by $463m over four years
- $247m for spending on the Inclusion Support Program
The Budget failed to invest in measures to help transform Australia’s education system into one that is truly inclusive, such as by developing a National Roadmap to Inclusive Education.
Employment
Access to meaningful and inclusive employment is key to promoting independence, financial security, connection and well-being.
But unemployment and underemployment rates remain high for young people with disability in Australia.
This year’s Budget includes some funding to support employment rights for young people with disability and caregivers.
Key measures include:
- $3.2m for extending the Carer Inclusive Workplace Initiative
- $800,000 for spending on extending disability complaints hotlines and services
It fails to address inclusive employment measures like developing a National Youth Disability Employment Strategy or increasing income support for young people with disability.
Health
Health systems play an important role in early identification, diagnosis, mental health support, and ongoing wellbeing.
However, children and young people with disability often face extra barriers when it comes to accessing affordable, inclusive, and timely healthcare.
This year’s Budget addresses disability and health data, mental health, healthcare access, and support services for young people in general.
Key measures include:
- $14.2m for spending on health data collection
- $3.1m for spending on student mental health support
- Funding for spending on First Nations youth mental health
- A slight increase to the Medicare levy threshold for low-income
- Ongoing access to public dental services for some children
- Changes to Medicare rebates for sleep disorder services
Safety
Children and young people with disability are at increased risk of violence, abuse, neglect, homelessness, and social exclusion.
This year’s Budget includes funding for homelessness, family violence, child safety, and wellbeing initiatives, including some targeted supports.
Key measures include:
- $4.1m for children experiencing violence or homelessness
- $59.4m for young people experiencing homelessness
- $171.7m for a national Children and Family Support program
- $182.6m for spending to make the child support system safer
- Mental health, safety, and anti-extremism spending following the Bondi attack
- $42.8m for supporting the safety of First Nations youth
- $12.5m for initiatives to combat child sexual abuse
Other Funding
The Budget also includes measures to support Disability Representative Organisations (DRO) and sector sustainability, disability aviation standards, and expanded health, disability and ageing services.
Key measures include:
- $15.9m for spending on DROs to support community engagement on reforms
- $38.1m for spending on disability standards for aviation
- $2.7bn for reinvestment into health, disability and ageing services
So, what does it all mean?
The 2026-27 Federal Budget includes some positive measures for children and young people in general, especially around health, safety and wellbeing. But it does not provide much targeted investment for children and young people with disability in particular.
Cutting $37.8 billion from the NDIS and $463 million in disability-related education funding over four years will have real impacts for the nearly one million disabled children and young people under 25 who live in Australia.
While funding important programs like the $2 billion Thriving Kids initiative and the $200 million Inclusive Communities Fund is intended to fill the gaps created by these enormous reductions, they do not come close to making up for what has been lost.
The government’s message is clear: it expects mainstream services like schools to support children and young people with disability more, but without providing enough funding.
What’s missing?
The Budget also failed to address key recommendations CYDA has made to the government in recent years. Building an Australia in which every child and young person with disability is supported to live, learn, develop, and thrive alongside their peers means genuinely investing in systemic change.
- In disability supports, that means prioritising clear and flexible support pathways parallel as part of and on top of the NDIS.
- In education, it looks like investing in a National Roadmap to Inclusive Education, inclusive early childhood education and care, a national independent oversight body, teacher training, and other measures.
- In employment, it means funding a National Youth Disability Employment Strategy, increasing income support to young people with disability, and transitioning to wage equity measures.
- While for sector sustainability, it requires investment in whole-of-government coordination, genuine co-design, targeted funding for intersectional disability communities, and more.
CYDA will continue to advocate for inclusive systems for children and young people with disability across all areas of life.
Learn more about our recommendations in our 2026-27 Pre-Budget Submission here.
Have your say on changes to the NDIS
To implement the NDIS reforms outlined in the Federal Budget, the Australian Government introduced a new Bill called the National Disability Insurance Scheme Amendment (Securing the NDIS for Future Generations) Bill 2026.
A Senate Committee is currently reviewing the Bill and asking the public to provide submissions. This is a chance for children and young people with disability, families, parents, caregivers, and supporters to share how the proposed changes could impact them.