Understanding NDIS Funding Categories: Core, Capacity Building and Capital

Open an NDIS plan for the first time and the budget section can look like a spreadsheet written in another language. Once you understand the three main categories, it makes a lot more sense, and you can start using your funding with confidence.

Your plan groups funding into three support purposes: Core, Capacity Building and Capital. Each works differently, especially in how flexible the money is.

Core supports

Core supports help with everyday life. They are about getting through the day, participating in the community and managing your disability related needs right now. Core is split into four areas:

• Assistance with Daily Life: help with personal care, household tasks, and supported living arrangements.
• Transport: help with the cost of getting around when you cannot use public transport without difficulty.
• Consumables: everyday items such as continence products and low cost assistive technology.
• Assistance with Social, Economic and Community Participation: support workers to help you take part in activities, groups and community life.

Core is usually the most flexible budget. In most plans you can use funding across the Core areas as your needs change, as long as the supports are related to your disability and are NDIS supports. Transport and some stated supports can be exceptions, so check how yours is listed.

Capacity Building supports

Capacity Building is about the future. It funds supports that build your skills, independence and ability to take part in life, so you may need less support over time. It is divided into categories, including:

• Support Coordination: help to understand and use your plan. See what a support coordinator actually does.
• Improved Daily Living: therapy, such as occupational therapy, speech pathology, psychology and physiotherapy.
• Improved Relationships: including behaviour support to reduce behaviours of concern.
• Increased Social and Community Participation: building skills to join in community activities.
• Finding and Keeping a Job: employment related support.
• Improved Living Arrangements: help to find and keep suitable housing.
• Improved Health and Wellbeing: such as exercise physiology.
• Improved Learning: support moving from school to further education.
• Improved Life Choices: plan management.

The key rule: Capacity Building funding generally cannot be moved between categories. Money in Improved Daily Living cannot be spent on support coordination, for example. That is why it matters that each category is funded properly in the first place.

Capital supports

Capital covers larger, one off investments. There are two areas:

• Assistive Technology: equipment such as wheelchairs, communication devices and mobility aids, including repairs and maintenance.
• Home Modifications: changes to your home such as rails, ramps or bathroom modifications, plus Specialist Disability Accommodation where eligible.

Capital is the least flexible budget. Items are often quoted and approved individually, and funding is usually tied to a specific item or modification. Higher cost items need assessments and quotes before funding is released.

Core and Capacity Building side by side

The simplest way to remember the difference is time. Core helps you live well today. Capacity Building helps you do more for yourself tomorrow. A support worker who helps with cooking is Core. An occupational therapist who teaches you a way to cook safely on your own is Capacity Building. A good plan usually needs both.

How the NDIS decides what to fund

Every support must meet the reasonable and necessary criteria. In short, it must relate to your disability, help you pursue your goals, represent value for money, and be likely to be effective. Since late 2024, the NDIS also publishes lists of what counts as an NDIS support, and what does not. Everyday living costs that anyone would pay, like groceries or rent, are generally not funded.

The NDIS is also moving towards a new way of setting budgets through needs assessments. The categories in your current plan still apply until you move to a new framework plan, and your coordinator can explain what changes for you when that happens.

How you pay providers

How your funding is managed affects which providers you can use. There are three options, and you can combine them across your plan:

• NDIA managed: the NDIA pays providers directly. You can only use NDIS registered providers.
• Plan managed: a plan manager pays invoices for you and tracks your spending. You can use registered and unregistered providers. Plan management is funded in Capacity Building, so it does not reduce your other supports.
• Self managed: you pay providers and claim the money back. You get the most choice and flexibility, along with the record keeping.

Whichever you choose, prices are capped by the NDIS Pricing Arrangements and Price Limits, so check that quotes sit within them.

Making the most of your funding

• Read your plan closely. Note which supports are flexible, which are stated, and your plan end date.
• Track your spending monthly. Your plan manager or the myplace portal can show you where you are up to.
• Spread spending across the plan. Running out in month nine is stressful. So is finding large amounts unspent at reassessment.
• Use Capacity Building well. It is the funding most likely to change your life long term, and underuse is a missed opportunity.
• Ask before you buy. If you are not sure whether something can be funded, check first.

When you are coming up to reassessment, how you have used each category becomes part of your evidence. Our guide on preparing for your NDIS plan review explains how.