NDIS Applications for Mental Health Funding - A guide for service providers | MyCareSpace
Search the NDIS Price List - Try it out now!

NDIS Mental Health Funding - help for practitioners

Share this resource:
How helpful was this resource?
How helpful was this resource?: 
holding hands for support


Our experienced Customer Connections team will connect you with support workers, allied health professionals and other providers that have experience with mental health and psychosocial disabilities. 


 A guide for clinicians, allied health professionals, GP's

There is now significantly more support for NDIS applications based on Mental Health or Psychosocial disabilities (a disability that may arise from a mental health issue). 

Not everyone who has a mental health condition will have a psychosocial disability, but for people who do, it can be severe, longstanding and impact on their recovery. People with a disability as a result of their mental health condition may qualify for the NDIS.

This resource is to assist clinicians, GPs, allied health professionals who are assisting and/or writing reports for NDIS applications under a psychosocial disability.

How does NDIS support mental health recovery?

The founding principles underpinning the NDIS are similar to the principles of mental health recovery.

The NDIA defines recovery as “achieving an optimal state of personal, social and emotional wellbeing, as defined by each individual, whilst living with or recovering from mental health issues”.

NDIS supports recovery and will tailor a support package to individual needs.

If eligible for NDIS funding, it is anticipated that a participant will be provided with a commitment to lifetime support with their ongoing recovery journey.

Psychosocial Disability and Eligibility

What are the NDIS eligibility requirements for people with mental health conditions?

To access the NDIS a person must meet the eligibility criteria:

  1. They must be under 65 years of age when they apply.
  2. They must meet the residency requirements e.g. be an Australian citizen, hold a permanent visa or hold a special category visa (SCV).
  3. They must meet the *disability criteria 

*The disability criteria (Section 24 of the NDIS Act) require that they MUST MEET ALL of the following:

  1. The person has an impairment attributable to a psychiatric condition
  2. The impairment is likely to be permanent
  3. The impairment results in substantially reduced functional capacity
  4. The impairment affect the person’s capacity for social or economic participation
  5. The person is likely to require support under the NDIS for their lifetime

1. The person has an impairment attributable to a psychiatric condition

Evidence of disability will demonstrate that the disability is attributable to a mental health condition/s.

Details of a clinical history confirming an unspecified mental health condition is sufficient where a specific mental health diagnosis is not available/appropriate.

2. The impairment is likely to be permanent

Impairments must be specifically about loss or damage to mental function. 

An impairment can be considered likely to be permanent if there are no known, available and appropriate evidence-based treatments that would likely remedy the impairment for the individual. 

When interpreting evidence against the likely permanence of impairment requirement, the NDIA considers how long the person has had the impairment, and to what extent treatment options have been explored (noting that the impairment may alleviate with age-appropriate development). 

Information about treatment (past, current and future)

There is no requirement that treatment and/or interventions must be completed for an impairment to be considered likely permanent.

However, they must be explored to the extent that clinical recovery is no longer likely and ongoing treatment is centered on personal recovery.

The NDIA does not make recommendations for specific treatment/interventions.

The treating clinician will decide on appropriate treatment and/or interventions for an individual.

The NDIA requires evidence that provides a history of treatment and the rationale relating to any decisions made by the clinician not to pursue a known treatment/intervention option.

3. What is meant by 'substantially reduced functional capacity' under the NDIS?

Information regarding the impact of the functional impairment is usually best provided through a functional assessment completed by an allied health professional.

This could be an occupational therapist, psychologist, nurse, social worker or a mental health worker who has completed relevant Australian Mental Health Outcomes and Classification Network (AMHOCN) training. 

A person’s functional capacity is highly individualised.

Some people experience difficulties with carrying out tasks (reduced functional capacity).

But others may be unable to effectively participate in or complete a task (substantially reduced functional capacity).

The NDIS requires that the impairment or impairments has/have resulted in substantially reduced psychosocial functioning to undertake activities IN AT LEAST ONE of following areas: 

  1. Communication:
    Includes being understood in spoken, written, or sign language, understanding others, and the ability to express needs.
  2. Social interaction:
    Includes making and keeping friends, interacting with the community, behaving within limits accepted by others, and the ability to cope with feelings and emotions in a social context.
  3. Learning:
    Includes understanding and remembering information, learning new things, and practicing and using new skills. Learning does not include educational supports.
  4. Mobility:
    Means the ability of a person to move around the home and community to undertake ordinary activities of daily living requiring the use of limbs.
  5. Self-care:
    Relates to activities related to personal care, hygiene, grooming, feeding oneself, and the ability to care for own health care needs.
  6. Self-management:
    Means the cognitive capacity to organise one's life, to plan and make decisions, and to take responsibility for oneself. This includes completing daily tasks, making decisions, problem solving, and managing finances.

*Assistance includes things like physical assistance, guidance, supervision or prompting.

The NDIA considers the impact of the impairment on day-to-day functioning between acute episodes not at any given point in time.

It is irrelevant whether the person is acutely unwell or having a particularly good day at the time of access request.

A substantial reduction in capacity is an inability to effectively participate in or complete a task.

For a reduction to be considered substantial within at least one of the six areas of functioning described above, there must be an inability to effectively function within the whole or majority of the area, not just a singular activity.

It is not enough that a person may take longer to do an activity or may require a bigger effort to do it or have to do it in a different way to be considered a substantial reduction.

When deciding whether capacity is substantially reduced, an NDIA representative will look at what the person can do as well as what they cannot do.

4. The impairment affects the person’s capacity for social or economic participation

Access delegates are required to consider whether a person’s permanent impairment/s affect their capacity for social or economic participation e.g. finding and retaining work or going to the movies with a friend.

If a person meets the other access criteria it is highly likely their impairment will have some affect on their social and economic participation. 

5. The person is likely to require support under the NDIS for their lifetime

To access the NDIS a person must likely require lifetime support from the NDIS and that support must be most appropriately provided by the NDIS and no other service systems such as the health system.

If an impairment varies in intensity (e.g. because of the episodic nature of the condition) the person may still be assessed as likely to require support under the NDIS for the person’s lifetime, despite the variation.

What evidence is needed for an individual to access the NDIS?

The National Disability Insurance Agency (NDIA) requires evidence that the prospective participant meets the NDIS eligibility criteria.

The NDIA accepts evidence provided by anyone in any form. The below list is a guide for some evidence types for each criteria.

This is not a complete list of options however, a person may need to submit one or more of these documents to have enough detail to meet the criteria.

One document may also provide evidence over multiple criteria. It can be beneficial to have evidence provided by different people.

Possible evidence types against each criteria of Section 24:

1. Disability/Impairment
This information is usually provided by a health professional who treats the person. This might be a psychiatrist, GP or psychologist) .

  • NDIS Access Request Form (ARF)/ NDIS Supporting Evidence Form (SEF)
  • Diagnosis history
  • Existing mental health reports or assessments
  • Recent government applications (e.g. Disability Support Pension)

2. Disability/Impairment is likely to be permanent
Usually provided in information from a treating health professional

  • Treatment history
  • Treatment plan
  • Supporting letter from treating health professional
  • Existing mental health specific reports or assessments

3. Impairment results in substantially reduced functional capacity
Usually provided by people that know that person well and/or understand their day-to-day functioning

  • Participant statement/self-reporting
  • Support Worker letter
  • Carer statement (see samples)
  • Supporting letter from treating health professional
  • Recent government applications (e.g. Disability Support Pension)
  • Financial guardian or administration orders
  • Functional capacity assessments (LSP-16, WHODAS, HoNOS)
  • Occupational therapy reports

Tip: When writing support statements, a person should focus on six ‘life skill’ areas:

  • Social interaction
  • Self-management
  • Self-care
  • Learning
  • Communication
  • Mobility

It’s important for the person developing the evidence to note what a person can and cannot do within these life skill areas.

A person only has to have substantially reduced functional capacity in ONE of these SIX 6 life skill areas to meet this criteria.

TIP: The most common life skills areas considered to have substantially reduced functional capacity for people with a psychosocial disability are: social interaction; self-management; and self-care.

4. Social and Economic Participation

  • Participant/Carer/Support Worker statement
  • Supporting letter from treating health professional
  • DSP evidence/Work history

5. Lifelong NDIS supports

  • Participant/Carer/Support Worker statement
  • Supporting letter from treating health professiona
  • Existing reports or assessments

The NDIA does not make recommendations for specific treatment/interventions but requests evidence that shows a basic history of treatments/interventions explored.

If a commonly known treatment for the condition has not been explored then a statement of clinical rationale for not pursuing this treatment/intervention may be required.

Evidence of Psychosocial Disability form

Evidence of Psychosocial Disability form (PDF 196KB) – to be completed by your most appropriate clinician, and your support worker or appropriate person. This evidence form makes it easier for people with a psychosocial disability and supporters to collect evidence for NDIS eligibility. 

Verbal Access Request (VAR) or Access Request Form (ARF) still needs to be completed . This form is a collaboration with the Department of Social Services funded Transition Support Project team at Flinders University.

Everyone who applies to the NDIS must meet eligibility criteria. These include age, residency and disability requirements. You must also live in an area where the NDIS is being rolled out.

To find out more go to How to apply.

Potential participants can access the NDIS in three ways:

Defined participants

Defined participants are people who are existing clients of a state, territory, or Commonwealth disability or mental health programs.

They should meet the age and residency requirements and are eligible to become an NDIS participant.

People who are part of existing defined programs are not required to provide evidence of their disability.

The majority of people with a primary psychosocial disability will enter as a non-defined or new participant.


People listed as non-defined are existing clients of a state, territory or Commonwealth disability or mental health program.

They do not automatically meet the eligibility requirements for the NDIS.

People listed as non-defined will be contacted by the NDIA up to six months before the NDIS rolls out in their area.

They need to provide evidence to meet the access criteria.



People whose details have not been provided to the NDIA by their state, territory or Commonwealth government and wish to apply to access the NDIS are considered ‘new’ participants.

New participants, or someone who supports them, will have initiated contact with the NDIA and may have been sent out an Access Request Form and/or provided further information over the phone to support their access request.

For non-defined and new participants to access the NDIS, the NDIA will need information about the potential participant’s age, residence, impairment and disability

What if there are co-existing drug or alcohol dependency issues? 

To meet the NDIS access requirements for psychosocial disability, substantially reduced capacity must be the result of impairment caused by a mental health condition.

Where co-existing drug or alcohol dependency issues may be present, evidence must demonstrate that the substantially reduced functional capacity remains regardless of the status of the co-existing issues.

Identifying that substantially reduced capacity is the result of a mental health condition and not substance/alcohol abuse is a highly specialised task and usually occurs in the following circumstances:

  • it is confirmed by a specialist neuropsychiatrist or neuropsychologist; or
  • it is confirmed following abstinence from substance/alcohol in a controlled setting, there is no requirement for ongoing abstinence to satisfy NDIS eligibility. 

What if my patient is not eligible for NDIS supports?

The NDIA assists people who are not eligible for individualised NDIS support to obtain information about relevant services in their community.

General support is available from a Local Area Coordinator (LAC) to assist people to access a range of supports within the mainstream and community sector.

LAC support enables the NDIS to offer peace of mind and access to practical support for every Australian – for anyone who has, or might acquire, a disability, including disability as a result of a mental health issues.

Please contact the NDIS to be linked to an LAC in your area. NDIS 1800 800 110

What if your patient's application is rejected and you believe the NDIS has made the wrong decision?

The first thing they need to do is contact the NDIA and ask them to explain the reasons for the decision.

If they are not satisfied with the outcome following these discussions they need to request an internal review of the decision.

An internal review of the decision is a new decision made by the NDIA, independent of the original decision.

If you are not satisfied with the review decision then you can apply to the Administrative Appeals Tribunal (AAT) to have the decision reviewed outside of the NDIA.

It is important to note that the AAT will not be able to review your decision until the NDIA has completed the internal review.

The AAT is an independent statutory body set up to provide an independent merits review of a wide range of decisions made by Commonwealth government bodies. An independent merits review means that the AAT will stand in the shoes of the original decision maker and consider all evidence provided when making a new decision.

NDIS and PSychosocial Disability into the Future

The NDIS is making strides to improving the experience of participants who are apply to the NDIS with a psychosocial disability. See this excerpt from the NDIS Quarterly Report at 31 March 2020

The NDIA continues to rollout improvements for people with a psychosocial disability.

These have included:

  • the implementation of a streamlined access process,
  • the development and sharing of key documents to support access, and
  • delivering training and education regarding NDIS access requirements to the mental health sector.

The NDIA commenced implementation of these improvements in Tasmania, South Australia, ACT, New South Wales and Queensland with remaining states and territories to be completed before the end of 2020.

The NDIA is continuing to develop the proposed psychosocial disability capability framework with the assistance of experts to define the capability required for NDIA staff and its partners.

This framework was initiated to directly address the recommendations made in the Mental Health Australia Pathway Consultation report for the need to build psychosocial capability in the NDIA. March 2020 | COAG Disability Reform Council Quarterly Report 41 Part Two: Participant experience and outcomes Lastly, a commitment from the Disability Reform Council (DRC) to improve access and experiences for participants with a psychosocial disability was announced following the 9 October 2019 DRC meeting. The NDIA together with DSS, and state and territory health department representatives, have established project teams and have commenced working collaboratively on the following key initiatives:

  1. Undertaking a joint examination of access and eligibility
  2. Improving linkages and referral to mental health supports for people not eligible for the NDIS
  3. Assertive Outreach, increasing access to the NDIS for people with a psychosocial disability
  4. Psychosocial disability recovery approach
  5. National approach to concurrent supports




Our experienced Customer Connections team will connect you with support workers, allied health professionals and other providers that have experience with mental health and psychosocial disabilities. 


Content Subscribers
Service Providers
MyCareSpace resources may not be replicated or reproduced in any form without express permission.

How MyCareSpace works


Tell us what supports you need

You can call us, use our livechat or submit an online request.


We connect you with NDIS Providers

We match your needs with verified providers that have capacity.


You choose the best provider

Compare providers and choose the one you like best.

Call us today

1300 2888 93