Budgeting can be difficult in any situation, let alone when navigating a complex system like the NDIS. Participants are often learning new terminology, understanding who does what, and working out which services they can access with their funding. On top of that, every service needs to fit within a defined budget. It can quickly become overwhelming.

Understanding how to approach your NDIS budget from the beginning can help ensure you do not overspend and risk losing access to essential services. It can also prevent situations where you may be out of pocket for services the NDIA will not cover.

Understanding your plan.

Understanding your NDIS plan is the first step to staying on track with your spending. Your total funding will usually be divided across several support categories and may also be spread across multiple years.

For example, you may have a three-year plan with funding allocated across three categories: Core, Capacity Building, and Capital. Each category serves a different purpose and must be considered when planning how your funding will be used.

Stated and flexible budgets.

Another important element is whether your budgets are stated or flexible. Pay close attention to how your plan is written.

Some budgets are very specific and clearly state how the funding must be used. It may also outline the number of hours that can be delivered or whether reports must be completed using the allocated funding.

Other budgets are more flexible and can be used across different types of supports within the same category.

Take into account funding periods.

The next step is to check whether your budgets are divided into funding periods. A funding period is the timeframe in which a portion of your funding becomes available and how long that funding must last.

Participants can only spend the available funding during that period. Funding periods can vary depending on how the plan has been set up. They may range from one month, three months, to twelve months.

If your plan has shorter funding periods, such as one or three months, it is important to budget carefully. It is easy to look at the total budget and assume it is available immediately, but that is not the case.

For example, you may have a $12,000 Improved Daily Living budget for one year with monthly funding periods. In this situation, $1,000 is released each month, so your spending should not exceed that amount monthly.

Funding periods must be followed.

Funding periods must be strictly followed. Funding cannot be brought forward from future periods.

If services are delivered during a funding period where no funding remains, the NDIA will not pay those invoices. This can leave participants vulnerable.

Unspent funding will roll over into the next funding period, but it cannot be accessed earlier than scheduled.

You can view your funding periods in the my NDIS portal, including:

• funding that has already been released
• the date of your next funding release
• future funding periods within your current plan

Service agreements are in your best interest.

Having service agreements in place with every provider you engage is critical. A service agreement is a written contract between a participant and their provider that outlines what both parties have agreed to.

Service agreements provide clarity on the services being delivered and the funding allocated to that provider.

The agreed amount should consider:

1. The funding available within the relevant budget, taking funding periods into account.
2. How much of that budget you want to allocate to that particular provider or service.

Some budgets are shared across multiple providers, so it is important to clearly decide how the funding will be divided to avoid overspending.

Service agreements do not need to be renewed with every new funding period. Instead, they should clearly outline how the funding will be used across each period within the plan.

Get your budget right from the start.

Setting up your services in line with your budget from the beginning is essential. If you begin to overspend early in your plan, it can be very difficult to get your spending back on track.

Running out of funding before the end of your plan can result in losing access to important supports. The NDIA considers overspending due to poor budget management a misuse of funding, and budget top-ups aren’t an option.

Support is out there.

If budgeting feels overwhelming, make sure you use the support available to you. Your “my NDIS contact” can help you manage your funding. If you have a Support Coordinator, part of their role is to help ensure your funding is used appropriately and not overspent.

If you choose plan management, your plan manager can also help you monitor your budget. Our plan management dashboard, Navigator, allows participants to track their funding in real time and stay on top of their spending.

There are supports and tools out there to help you. Understanding the importance of budgeting early means you can confidently shift your focus to achieving your goals, knowing your budget is under control.