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Is Psychology Funded Under the NDIS?

Kylie explores when psychology is funded by the NDIS and how to make reports as strong as possible.

By Dr Kylie Morgan

Updated 15 Apr 202427 Jun 2023

It is not uncommon for me to hear that someone has been rejected for psychology funding in their NDIS plan. I have even heard NDIA planners say that NDIS does not fund psychology. We all know that is not true - there are even specific line items in the Pricing Arrangements and Price Guide for psychology.

So, what triggers psychology to be funded by the NDIS?  Why are people getting their requests for psychology funding rejected? And how can we make sure reports are as strong as possible?

Let’s dive into some of these questions!

Mental Health Versus NDIS

Both the mental health system and the NDIS fund psychology. However, they are for two different purposes. The NDIS Operation Guidelines provide some great examples of what might be funded under each of these systems. In a nutshell, the mental health system is responsible for treating a mental health condition, while the NDIS is responsible for supports that focus on a person’s day-to-day functioning.

For the NDIS to fund psychology, the supports must relate to a person’s disability. This is where things get a little tricky and in reality, rather darn messy. It is impossible to separate off our mental health from the rest of our being.

Will the NDIS only fund psychology for disabilities that meet the Access Criteria?

Technically speaking there is nothing in the NDIS Act to prevent a person from being funded for multiple impairments, even if those impairments have not met access criteria. However, the NDIA's Operational Guidelines state that they will only fund supports relating to the impairment(s) that have met the access criteria. This stance has  been contested by AAT members here and here, and lawyers/ advocates in the sector here – we’ve also written about this here.

In reality NDIA planners are sticking to the Operation Guidelines and only funding psychology when it relates to the disability that a person has met access criteria for. Furthermore, the NDIA also needs to be satisfied that the psychology relates to building functional capacity rather than treatment and thus more appropriately funded by health.

Psychology funding for people with Psychosocial Disability

Mental health and psychosocial disability are two different things. Under the NDIS, the term mental health is used in direct relation to a specific diagnosis or condition e.g., anxiety. Whereas psychosocial disability is the impact of the mental health condition on a person’s day-to-day functioning.

Once a person with a psychosocial disability has been granted access to the NDIS, they will need a letter of recommendation from their psychologist which outlines how psychology will assist them to manage the impact of their psychosocial disability on their day-to-day functioning.

If a person has more than one mental health condition, the NDIA is usually only funding psychology for the condition that met the Access Criteria. For example, someone may be diagnosed with schizophrenia and depression, but they have been granted access to the Scheme only for schizophrenia. Therefore, the NDIA will often consider treatment for the depression, the responsibility of the health care system, while assistance with managing the functional impairment arising from their schizophrenia, the responsibility of the NDIS.

Psychology funding for people with other disabilities

What about psychology funding for NDIS participants who do not have a psychosocial disability? It is possible to get funding, but not always easy! All requested supports, whether psychology or anything else, need to be related to the person’s disability.

Let’s look at an example of a person with an acquired brain injury and a goal to increase their community participation. The person gets a report from a psychologist recommending psychology sessions to develop strategies to manage poor concentration and memory when participating in these community activities. As this relates to his disability, if all other Reasonable & Necessary Criteria are met, this support is likely to be funded.

Another example is if a person who has a primary diagnosis of Autism Spectrum Disorder (ASD) Level 3 and was granted access to the NDIS. The features of his ASD include intense fear of being in social situations and severe distress about changes to his routines. He gets a psychology report which recommends psychology to assist him in learning strategies to manage social situations and changes to his daily routines. The NDIS granted John’s request for psychology supports to be funded in his plan.  

However, if a person has a separate mental health condition in addition to their primary diagnosis, the NDIA will usually consider this the responsibility of the mental health system.

Hot tips and tricks

How psychologists write their reports for the NDIA can be crucial to a person getting funded for psychology under the NDIS. For reports to be effective I suggest that you:

  1. Understand the difference between mental health and psychosocial disability.a)  The mental health system funds treatment and therapy for a mental health condition, while the NDIS fund supports to assist a person to manage the impact of disability on their day-to-day functioning.
  2. Know the diagnosis for which the person has been granted access to the NDIS.
    a)    While there is no requirement in the NDIS Act or the Rules to relate the supports recommended back to an impairment listed at access (McLaughlin 2021), the NDIA does pay attention to this.
    b. )    Try to relate the recommendation for psychology to the diagnosis which has met the NDIS access criteria, if it is known.
  3. Be careful with your wording!
    a.)    Using words that are clinical in nature such as treatment, therapy, or even the word “clinical” itself may lead the NDIA to believe that the supports being requested are for the purpose of treatment and thus are to be funded under the mental health system.
  4.  Link your recommendations to a person’s NDIS goals.
    a)     NDIS funding is given to assist a person to meet their NDIS goals. Therefore, it is important that reports demonstrate how the recommended supports are going to assist the person to meet their goals.
  5. Talk about risk.
    a)     Provide a paragraph that clearly outlines what the risk will be to the person if the recommended supports are not funded. For example, will they be able to meet their NDIS goals without your recommendations? Will the participant be at risk of any physical, financial etc or other type of risk if not funded for psychology?

Artwork by Melissa Pym.


Dr Kylie Morgan

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