In brief
This year’s budget contained numerous measures related to the funding of, and reduction of fraud and non-compliance in government reimbursed schemes, such as the National Disability Insurance Scheme (NDIS), Pharmaceutical Benefits Scheme (PBS), National Immunisation Program (NIP) and Medicare.
Key takeaways
In the 2026-27 Federal Budget, the Government will provide:
- AUD 5.9 billion over five years for new and amended PBS and Repatriation Pharmaceutical Benefits Scheme (RPBS) listings;
- AUD 1.7 billion over five years to support people with disability and to improve the quality of supports delivered through the NDIS, including various measures to improve payment integrity and reduce fraud and non-compliant payments; and
- AUD 590.7 million over five years to improve access to medicines, vaccines and health technologies including:
- AUD 2 million in 2026–27 to further develop cost recovery arrangements for Health Technology Assessment processes to support sustainable funding of the PBS, Medical Services Advisory Committee and the NIP; and
- AUD 0.5 million in 2026–27 to support revised Strategic Agreements with the medicines industry to sustain continued access to new medicines.
The Government is targeting:
- Savings of AUD 3 billion over four years through the removal of the age-based uplift of the Private Health Insurance Rebate;
- Savings of AUD 674.1 million over four years from enhanced integrity measures reducing fraud and non-compliance in the Medicare Benefits Schedule (MBS) and the PBS; and
- Reduced growth in NDIS payments by AUD 37.8 billion over four years relative to the NDIS Actuary’s projections.
In more detail
New and amended PBS listings
The Government will provide AUD 5.9 billion over five years from 2025-2026 for new and amended listings on the PBS and RPBS. This signals an ongoing commitment to subsidised medicine access for Australians. Examples of recent new and amended listings relate to oncology, immunology, neuromuscular and infectious disease.
Improving access to medicines, vaccines and health technologies
The Government will provide AUD 590.7 million over five years to improve access to medicines, vaccines and health technologies.
Key allocations include:
- AUD 449.3 million to support the addition of the Respiratory Syncytial Virus (RSV) vaccine Arexvy® to the NIP for Australians aged 75 and over, and Aboriginal and Torres Strait Islander peoples from age 60; and
- AUD 41.2 million to expand the NIP Vaccinations in Pharmacy program to children under five.
The Government has also allocated:
- AUD 2 million to further develop cost recovery arrangements for Health Technology Assessment (HTA) processes supporting the PBS, Medical Services Advisory Committee (MSAC) and NIP; and
- AUD 0.5 million to support revised Strategic Agreements with the medicines industry to sustain continued access to new medicines.
Medicare and PBS integrity
The Government will invest AUD 745.1 million over four years from 2026–27 to strengthen Medicare systems and infrastructure, including:
- AUD 598.3 million for the continued operations and enhancement of My Health Record, and
- AUD 146.8 million to establish enhanced Medicare integrity capabilities targeting fraud and non-compliance in the MBS and PBS.
These measures are expected to generate savings of AUD 820.4 million over four years, including AUD 674.1 million from reducing fraud and non-compliance in the MBS and PBS, and AUD 146.3 million from reduced duplicative diagnostic imaging and pathology as the Modernising My Health Record (Sharing by Default) Act 2025 takes effect on 1 July 2026.
Modernising private health insurance
The Government will remove the age-based uplift of the Private Health Insurance Rebate from 1 April 2027 to enable a simplified and more equitable distribution of the rebate. Savings of AUD 3 billion from this measure will be invested into the aged-care sector. The Government has committed to providing AUD 3.2 million for consultation on further reforms to the private healthcare system.
NDIS
The Government has committed AUD 1.7 billion over five years to fund the NDIS, with reforms projected to reduce growth in NDIS payments by AUD 37.8 billion over four years.
Reforming access and planning
The Government is progressing reform to NDIS access, allocating AUD 270.1 million for the implementation of new framework planning from 1 April 2027, and AUD 3.3 million to establish an expert group for the design of functional capacity assessment tools and instruments which the Government will engage in public consultation on. Changes to assessing access based on functional capacity will not commence until 1 January 2028.
Reducing fraud
A significant focus is on payment integrity and fraud prevention, and the Government will invest:
- AUD 358.5 million to develop a new enrolment and digital payments system to increase oversight of payments;
- AUD 280.1 million to continue funding the Fraud Fusion Taskforce and National Disability Insurance Agency (NDIA) in their fraud detection and response activities, strengthening their investigative and enforcement capabilities; and
- AUD 182.6 million to introduce mandatory registration of high-risk NDIS providers.
A copy of the Federal Budget papers can be found here.
Gabrielle Milet, Associate, has contributed to this legal update.