NDIS Provider Alert: How 'Thriving Kids' Will Reshape the Allied Health Market
The 'gold rush' era of the NDIS early intervention stream is officially drawing to a close. With the February 2026 release of the ‘Thriving Kids’ operational plan, allied health providers must prepare for a seismic shift in their business models. The transition from individualised funding to state-based block funding presents both a risk and a massive opportunity for the sector.
The Shift from Individual Plans to Block Funding
Currently, many providers rely on individual NDIS participants bringing their funding packages to clinics. The ‘Thriving Kids’ model pivots toward block funding and state-commissioned services. Providers will likely need to bid for contracts to deliver services in schools and community centres rather than relying solely on fee-for-service models. This will require a change in administrative structure, with a greater focus on tender writing and government relations.
Registration and Compliance Crackdown
The government has also signalled that the days of unregistered providers operating with little oversight are numbered. With only 16,000 of the sector's 260,000 providers currently registered, ‘Thriving Kids’ will introduce stricter evidence-based requirements.
- Impact: Sole traders and smaller agencies may need to merge or form consortiums to meet new compliance burdens.
- Opportunity: Providers who specialise in "mainstream" integration—helping kids succeed in standard classrooms—will be in high demand.
The "Missing Middle" Market
Providers should pivot their marketing and service design to capture the "missing middle"—the 1 in 5 children who have developmental needs but will no longer qualify for the NDIS. These families will be accessing care through the new state-federal partnership, and providers ready to integrate with the public health system will thrive in this new environment.
Official References:
.svg)
.svg){kind=small}