Thousands of small allied health businesses are at risk of being left behind as major changes to the NDIS and the introduction of Thriving Kids take hold. The Council of Small Business Organisations Australia and Allied Health Professions Australia are urging the government to step in and provide support to help these providers make a smooth transition.
Businesses built around a system now changing
Many occupational therapists, speech pathologists, physiotherapists, psychologists and other allied health professionals established private practices as the NDIS expanded, investing in premises, employing clinicians and building businesses around the system as it existed. As participants move out of the NDIS and new Thriving Kids service models take shape, COSBOA CEO Skye Cappuccio says the impact on those businesses and the communities they serve needs to be addressed directly.
"These aren't faceless providers. They are small business owners who have spent years building practices, employing people and investing in their communities," Cappuccio said. "Many built their businesses in response to the system created by governments. Now that system is changing substantially and some are facing another major restructure through no failure of their own."
AHPA CEO Bronwyn Morris-Donovan says the organisation shares COSBOA's concerns about how the sector will manage the shift. "We absolutely support the goal of a sustainable disability support system where Australians who need allied health support can access the right services when they need them," Morris-Donovan said. "We have been calling on governments to provide a clear plan for the allied health workforce and small businesses affected by these changes, including practical measures that support the sector to remain resilient throughout the transition. Allied health providers are critical to delivering essential health and disability services across Australia, and many small practices operate across multiple government programs and funding streams, including the NDIS."
Recent ASIC data shows the pressure building across the sector even before the reforms fully land. Companies entering external administration for the first time in the health care and social assistance sector rose from 160 in 2022-23 to 481 in 2024-25, an increase of around 200 per cent and the largest rise of any industry division. Among allied health providers specifically, first-time insolvency appointments rose from 17 to 68 over the same period, a 300 per cent increase, while other social assistance services rose from 18 to 126, up 600 per cent.
What the industry bodies are asking for
COSBOA and AHPA are calling on government to provide targeted transition support, including clear information and guidance, business resilience tools, and assistance for businesses that need to restructure as a result of the reforms. "There are existing government programs designed to help businesses respond to disruption and major structural change. Allied health businesses affected by these reforms should be actively connected with appropriate advice, tools and support rather than being left to navigate the transition alone," Cappuccio said.
The two organisations also want government-led research to identify which businesses and communities are most at risk, and to ensure small and private providers are factored into the development of Thriving Kids commissioning models. "This research would give Government the information it needs to realistically assess where displaced allied health professionals could work, we cannot just assume businesses and clinicians can simply move straight into other sectors such as aged care," Morris-Donovan said.
The regional impact
Around 90 per cent of occupational therapists are women, as are the majority of speech pathologists and psychologists working in roles central to paediatric early intervention. Morris-Donovan says the disruption could be felt hardest outside major cities. "We are particularly concerned about the disruptive impacts of the reform in regional and remote communities, where one practice may provide services across disability, paediatric care, aged care and other areas and where replacing lost allied health capacity is already difficult."
Cappuccio says the outcome for these businesses still depends on decisions governments haven't yet made. "Governments still have choices about how this transition is managed. Private providers need a genuine place in the development of new service models, with practical support available for businesses that need to restructure. Small businesses shouldn't become collateral damage from reform because nobody stopped to consider what would happen to them."