KB Type: Concept
Domain Area: Legislative
Confidence: Provisional — requires Andrew's research to verify
Depth Hint: Standard
Version: 1.0 — 2026-04-20
Status: Provisional

The NDIS is transitioning from a medical, diagnosis-based model to a functional impairment model under the 2024 legislative amendments. Rather than relying on diagnostic labels alone, the new framework evaluates how specific impairments create tangible barriers in a participant's daily life. The six recognised impairment types are: Intellectual, Cognitive, Neurological, Sensory, Physical, and Psychosocial. For support coordinators, understanding functional impairment is critical because every requested support must be justified by explicitly linking it to the specific impairment barrier it is designed to overcome.

The New Framework recognises six distinct impairment categories that replace the old primary/secondary diagnosis model:

A participant may have multiple impairment types simultaneously. Each support justification must reference the specific functional impairment creating the barrier.

Under the Old Framework, NDIS plans traditionally relied on medical diagnoses mapped to the International Classification of Diseases (ICD). The New Framework abandons this purely diagnostic approach in favour of a biopsychosocial model that evaluates functional capacity.

Operationally, funding decisions will be made by Needs Assessors who evaluate functional capacity rather than diagnostic labels. When preparing a Participant Statement, simply naming a condition (such as "severe anxiety" or "autism") is no longer sufficient. The documentation must translate the diagnosis into an impairment type and detail the specific functional barrier it creates — for example, explaining that a psychosocial impairment results in an inability to leave the house independently, leading to social isolation.

Support Coordinators must guide participants to frame their challenges functionally, using trauma-informed discovery questions such as: "What things in your daily life are hardest for you to do because of your health or disability?" rather than "What is your disability?"

Practitioners act as translators, taking the participant's plain-English challenges and formally documenting the "Primary Impairment Impact" to justify why a specific Support Categories is legally required. This robust documentation is designed to disrupt administrative inertia, preventing planners from simply rolling over old goals without addressing current functional needs.

The functional impairment model is the linchpin of the NDIS Trinity, which maps participant Goals to Support Categories and ultimately to NDIS Outcomes. An impairment creates the barrier that prevents a participant from achieving their stated goal, which legally justifies the allocation of specific Support Categories to overcome that barrier.

RS-05 research confirms a significant policy shift in how psychosocial impairment is applied to eligibility for Psychosocial Recovery Coaching (PRC). Under the previous model, PRC was largely understood to be available only to participants whose primary access category was psychosocial disability. The emerging NDIS position — reflected in operational practice if not yet in the literal wording of the Pricing Arrangements — is that any participant with a co-occurring psychosocial impairment can access PRC, regardless of their primary diagnosis. This means a participant with autism, intellectual disability, or a physical condition as their primary access category may now be eligible for PRC if psychosocial impairments are also present and functionally limiting.

Compliance implication: Coordinators working with participants under a non-psychosocial primary access category must document psychosocial impairment evidence explicitly. A claim for PRC in these cases is likely to face closer scrutiny during a payment assurance review, and the evidentiary bar is high. Staff qualifications for PRC delivery remain unchanged: practitioners must hold a Certificate IV in Mental Health or demonstrate at least two years of equivalent lived or professional experience.

Under the 2024 transitional period, practitioners must simultaneously navigate both the Old Framework (diagnosis-based, ICD codes) and the New Framework (six functional impairment categories). This means capturing the medical diagnosis context required by legacy CRM systems AND the functional impairment context demanded by incoming Needs Assessors.

Practitioners must meticulously map how a recognised impairment creates a functional barrier, why informal supports cannot overcome it, and which specific PACE support category is required to achieve a recognised NDIS outcome. Relying solely on diagnostic labels such as "Schizophrenia" or "Autism" is no longer administratively sufficient — the impairment must be translated into a specific daily-life barrier (for example, executive dysfunction preventing routine management) that a specific support category is designed to address.

The NDIA's CRM system continues to require Primary and Secondary Disability fields that feed legacy eligibility and funding algorithms. A practitioner-ready template bridges both the legacy and new systems by capturing Primary and Secondary Disability diagnoses with ICD-10 or ICD-11 codes alongside the PACE Recognised Impairment Type checkboxes. This dual approach satisfies legacy CRM requirements while fully aligning with the PACE architecture. The ICD code (e.g., F20.9 for Schizophrenia, or F84.0 for Autism Spectrum Disorder) elevates the clinical authority of the document and removes diagnostic ambiguity for NDIA planners. For practitioners, this means the Block 1 section of the Participant Statement must capture both: the medical diagnosis with ICD code, and the corresponding functional impairment type it generates.

Confidence note: Provisional — derived from NbLM primer analysis. Requires verification against official NDIA guidelines for the New Framework.