Mental Health Coordinating Council (MHCC), in partnership with National Disability Services (NDS), has released a new position paper calling for urgent reform to establish a comprehensive system of psychosocial foundational supports in New South Wales for people who are outside the National Disability Insurance Scheme (NDIS).

What it’s about

Nationally, an estimated 500,000 people with moderate to severe mental health challenges who need psychosocial supports are not receiving them. For many, lack of NDIS eligibility or difficulty accessing the scheme is contributing to social isolation, housing instability, and preventable crises such as hospitalisation and homelessness for the individual, with effects felt across families and our wider communities.
The absence of a coordinated psychosocial support system is also placing pressure on the NDIS and mainstream services, which were never designed to fill this gap.

Purpose of the paper

Responding to this issue, MHCC’s paper Foundational Supports for people with psychosocial support needs in NSW, developed in partnership with NDS, sets out the case for reform, drawing on the ongoing national agenda and growing evidence of unmet need.
The paper examines reviews, inquiries and lived experience consultations to identify what is needed for an effective and fair system: a comprehensive, evidence-informed framework that strengthens community-based models, addresses service gaps, and ensures people can access the right supports at the right time.

why this matters

This push for change follows the 2023 Independent Review of the NDIS, which highlighted major gaps in support for people with psychosocial disability outside the scheme. Subsequent inquiries and reports have further reinforced the scale of unmet need and the urgency of securing new foundational support arrangements.

Key issues

• substantial unmet need for psychosocial support services
• broader gaps in the support system
• increased pressure on the NDIS as people turn to it because alternatives are missing
• fragmentation across jurisdictions and systems, resulting in inconsistent access and people falling through service gaps
• lack of coordinated responses, leading to preventable crises including isolation, homelessness and hospital presentations
• insufficient investment in, and planning for, the psychosocial workforce, including peer workforce integration
• the risk of creating a two-tier system if foundational supports are positioned as a substitute for NDIS-level
• supports for people with complex needs

Our recommendations

MHCC and NDS advocate for a comprehensive psychosocial foundational support system for people with mental health challenges to live well outside the NDIS.

Our recommendations to achieve this:

• Build a complete system of psychosocial foundational supports for people with moderate to severe mental health challenges who are outside the NDIS.
• Make sure supports are based on best-practice principles, including human rights, trauma-informed and recovery-oriented care, cultural safety, co-design, and supported decision-making.
• Create a coordinated, “no wrong door” system so people can get help through health, housing, education or community services and be connected to the right support.
• Rebuild navigation and outreach supports, including peer navigation, local service navigation and proactive outreach, so people can find, access and stay connected to services.
• Strengthen social and community connection programs to reduce isolation and digital exclusion and help people build meaningful relationships.
• Restore targeted daily living and housing supports, including programs similar to PHaMs and accommodation supports, to help people live independently, maintain routines and keep stable housing.
• Provide early intervention supports for people with emerging or changing psychosocial needs to stop problems from getting worse and reduce pressure on crisis services.
• Develop a dedicated psychosocial workforce strategy, including training pathways, peer workforce integration, fair pay and long-term workforce planning.
• Put nationally consistent governance and commissioning arrangements in place across Commonwealth, state and territory governments to reduce fragmentation and provide stable, long-term access.
• Use outcomes-based measurement and transparent public reporting, including dashboards and community scorecards, to track access, wait times, service quality and wellbeing outcomes.

This focus on stronger systems, better evidence and coordinated sector development aligns with MHCC’s broader work to strengthen visibility and investment in the community-managed mental health sector. Our sector data mapping project reinforced the importance of clear evidence to ensure that community-managed mental health work is represented in major datasets to guide funding and policy decisions and improve outcomes for people and communities.

what happens next

MHCC and NDS urge that now is the time for governments to progress a nationally consistent strategy for psychosocial foundational supports, backed by joint commissioning and long-term system reform. This should be supported by regular public reporting include independent advisory groups to monitor equity and progress.

Psychosocial foundational supports must be designed as a genuine, community-based system of support that closes service gaps, strengthens inclusion, and ensures people can access equitable, timely and locally responsive services across NSW.

Register to join our Member Briefing: Foundational Supports and Psychosocial Needs in NSW here.