NZ Restores Flexible Disability Funding From April

Disabled people in New Zealand will gain greater choice and control over how they use their flexible support funding from April, while keeping their current funding levels unchanged, Disability Issues Minister Louise Upston has announced.

The policy change removes existing purchasing restrictions that were introduced as part of efforts to stabilise the disability support system, allowing individuals and families to tailor support services more closely to their personal needs.

"Our Government committed to restoring flexibility, choice and control in a way that was sustainable," Upston said.

Purchasing Restrictions to Be Removed

Under the new changes, the current purchasing rules governing flexible disability funding will be removed from April, giving recipients broader freedom in how they allocate support funding.

Importantly, the government confirmed that funding allocations will remain exactly the same as they are today, meaning individuals will not see reductions in their existing support budgets.

Previously, officials considered using past spending patterns to determine future funding levels. However, the government has now decided budgets will not be recalculated based on historical spending.

"This means we no longer need to look at what people spent in previous years to set new budgets," Upston said.

More Support to Help Manage Funding

Alongside greater flexibility, disabled people and their families will receive additional guidance and coaching to help manage their funding effectively.

Officials say this tailored support will ensure people can confidently navigate the system while making decisions that best suit their personal circumstances.

Although flexibility is expanding, several safeguards will remain in place:

• Funding must still be used in line with a person's approved support plan

• Some purchases will still require pre-approval

• Spending must remain within the allocated budget limits

The changes are also expected to provide more respite care options for carers, a key concern raised during consultations with disability advocacy groups.

Reforms Follow Community Feedback

The policy shift follows extensive feedback from the disability community and recommendations from the 2024 Independent Review of Disability Support Services (DSS).

That review identified several structural issues in the system, including:

• Rapidly rising and unsustainable spending

• Unclear eligibility criteria for flexible funding

• Regional inconsistencies, described as a "postcode lottery" affecting access to support

The government said reforms introduced since 2024 have helped stabilise the system and create conditions for restoring flexibility.

System Stabilised After Major Reforms

According to the Government, significant progress has been made in strengthening oversight and financial management within Disability Support Services.

Key improvements include:

• Stronger financial controls and oversight for Needs Assessment and Service Coordination agencies (NASCs)

• Improved governance for Enabling Good Lives sites and equipment providers

• Long-overdue fixes to residential care pricing structures

• More consistent assessment processes for determining support needs

In Budget 2025, the Government also committed $1 billion in new funding to manage rising demand and inflation pressures in disability services.

Officials say these steps have helped create a financially stable and sustainable support system, allowing the government to restore flexibility without risking future funding uncertainty.

"These steps mean the system is financially stable, sustainable, more consistent and easier to use," Upston said.

Greater Confidence for Disabled People and Families

The Government says the changes are designed to restore autonomy while maintaining long-term sustainability in the disability support framework.

"We can now restore flexibility and choice without creating uncertainty," Upston said.

"Disabled people can be confident their support will continue."

The updated flexible funding rules are expected to take effect from April, impacting thousands of disabled New Zealanders who rely on government-funded support services.