How to Value an NDIS Business in Australia

What does it mean to value an NDIS business?

Valuing an NDIS business means forming an independent opinion of what the business, or an interest in the entity that owns it, would change hands for at a stated valuation date, being the date at which value is assessed, on stated assumptions and for a stated purpose. Market value is the price a willing but not anxious buyer would agree with a willing but not anxious seller, both properly informed and dealing at arm's length. Value and price differ: an actual price can include what one buyer gains and no other would, such as a group folding a provider into an existing roster, and a market value conclusion excludes that special value.

The valuation date matters more here than in most sectors. The NDIA resets prices each financial year through its annual pricing review, and at the time of writing the NDIS pricing schedule effective 1 July 2026 has replaced the pricing arrangements and price limits that applied in 2025-26. Plan rules, registration obligations and claiming windows also change on fixed dates, so the same provider valued in June and in October can be two different businesses.

The methods are orthodox. What makes a conclusion defensible is the sector work beneath them: where the revenue comes from, whether it survives the next plan cycle, and who can legally buy it. Our NDIS provider valuations page sets out the framework.

Step one: identify what the business actually sells

"NDIS provider" describes a funding source, not a business model. Revenue is split first by support type, because each carries a different price mechanism, workforce and reform exposure.

The NDIA explains that every participant plan has four support budgets, being core supports, capacity building supports, capital supports and recurring supports, divided into 21 support categories and hundreds of support items, each with its own code and price limit. Funding may be flexible, spendable across categories within the same budget, or stated, usable only for the support named in the plan. Stated funding is more predictable for the provider holding it and more fragile if the plan changes.

Distinct business models sit on that structure:

• Supported independent living (SIL): rostered support in a shared or individual home. Labour intensive, revenue concentrated in few participants, and caught by the mandatory registration of SIL and platform providers that began to be rolled out from 1 July 2026.
• Specialist disability accommodation (SDA): the dwelling itself, a property-backed return valued apart from any operating business.
• Daily living and community participation: hourly support work, most exposed to the budget resets below.
• Therapy and capacity building: allied health delivery at NDIS price points, closer to an allied health practice than to a support business, and most exposed to the 2028 eligibility changes.
• Support coordination and plan management: intermediary services with little capital intensity and, at the time of writing, the greatest structural uncertainty.

Treating these as one sector misprices most of them.

Step two: work out what transfers to a buyer

The NDIS Quality and Safeguards Commission states that a registration is linked to a single ABN, is not transferable to a different ABN, and cannot be updated or amended once linked. In an asset sale the buyer must hold or obtain registration in its own right before delivering supports that require it. In a share sale the entity, its ABN and its registration continue, though the Commission requires notification as soon as possible, with updated key personnel details.

For changes of ownership from 1 July 2026 a buyer must also start a condition audit no later than three months after the purchase, where the provider holds a registration group requiring a certification audit and the sale significantly changes the organisation or its governance. Registration generally runs for three years, so the timing of the next renewal audit matters too.

Registration is a gate rather than an asset: its conditions and cost decide who can bid and how much of the price stays unconditional. It is required for specialist disability accommodation, specialist behaviour support, plan management, supported independent living, NDIS digital platform services, regulated restrictive practices and any participant with NDIA-managed funding, so an unregistered provider reaches only participants who self-manage or plan-manage. Separately, the Department of Health, Disability and Ageing states that most providers must enrol with the NDIA from 1 July 2027 and nominate a validated bank account. Enrolment is not registration, and a buyer will want both settled.

Step three: treat price limits as a revenue ceiling

Most businesses set their own prices. NDIS providers largely do not. The NDIA states that price limits are the maximum prices registered providers can charge participants for specific supports, and that providers can negotiate lower prices. Any proposed change to an existing service agreement must be discussed with the participant, who must agree before it is made.

Value therefore comes from volume, service mix, utilisation and cost control, not from pricing power. A provider cannot recover a poor roster or inefficient travel through price, and where a cost increase runs ahead of the annual adjustment the margin absorbs it. That asymmetry belongs in the risk assessment, not the forecast: see government funding exposure and business value.

Step four: rebuild the accounts into maintainable earnings

Maintainable earnings are the profit the business can reasonably be expected to repeat under normal conditions, usually expressed as EBITDA, being earnings before interest, tax, depreciation and amortisation, or EBIT, being earnings before interest and tax. Normalisation adjusts reported profit to reach that figure. The adjustments that matter most here are:

• Owner remuneration at market. A working owner who rosters staff, holds referrer relationships and takes the on-call escalations is costed at what a replacement would cost.
• Repricing to current settings. Historical periods are restated at the price points, travel rules and claiming rules applying at the valuation date.
• Unclaimable and rejected revenue. Amounts that can no longer be claimed, or are under review, are removed rather than treated as delayed cash.
• Award compliance. Under-provisioned penalty, overtime, broken shift or sleepover entitlements understate labour cost and usually signal a liability.
• One-off compliance cost. An initial certification audit or a single regulatory matter is removed; recurring audit, screening and training costs stay.
• Related-party rent and vehicles. Amounts paid to entities the owner controls are restated to arm's length.

What is maintainable earnings explains the concept in more depth.

Step five: measure participant concentration and plan risk

Concentration analysis most often changes the answer. NDIS revenue is rarely locked in by long-term contracts: funding follows the participant, service agreements are generally terminable, and the Commission is explicit that participants must not be automatically moved to a new owner. What a provider holds is a set of relationships whose durability is a matter of evidence: revenue by participant, by support category and by referring support coordinator, with the largest few identified in each. A SIL business drawing most of its revenue from a dozen participants is a different risk from a therapy practice serving several hundred. Patient, participant and referral concentration explains that analysis.

Plan risk sits alongside it and is unusually visible. Following the National Disability Insurance Scheme Amendment (Securing the NDIS for Future Generations) Act 2026, which the Department records as receiving Royal Assent on 20 August 2026, the published timetable includes:

• From 27 August 2026, only a participant, their plan nominee or their guardian can request an unscheduled plan reassessment, and only after a significant and ongoing change in functional capacity and support needs, or in living, education, work or informal support arrangements. The NDIA has up to 90 days to decide.
• From 1 October 2026, for new plans and reassessments, budget allocations for social, civic and community participation supports are to be reduced by 50 per cent and capacity building daily activity budgets by 10 per cent, extending to other participants from 1 February 2027 at renewal. Critical supports and continuous 24 hour care are not affected.
• From 1 February 2027, unspent funds will not roll over into a renewed plan, and new framework planning begins from 1 April 2027.
• Mandatory registration expands to higher risk supports from 1 July 2027, finalised by December 2030. An approved panel of plan management providers starts from 1 October 2027, and from 1 July 2028 support coordination moves to directly appointed providers rather than plan funding.
• From 1 January 2028, access is to rest on a standardised functional capacity assessment, existing participants are to be reassessed progressively over three years, and children aged 8 and under with developmental delay or autism and low to moderate support needs are to move to Thriving Kids.

The Department notes the reset cuts allocations rather than spending: it will not necessarily reduce what a participant spends by the same amount, because many do not draw their full allocation. The effect on a given provider therefore turns on measured utilisation and arrives gradually as plans renew. A provider weighted to community participation faces a repricing its accounts cannot show, a paediatric practice a narrowing eligible population, and a plan management or support coordination business the redesign of its role.

Step six: test claiming and debtor quality

The NDIA states that payment requests must be submitted within two years of delivery, that claims for NDIA-managed participants must be submitted within 90 days from the end of a service booking, and that a claim lodged more than six months after the service may be held for review for up to 28 days. The Department has announced that from 1 December 2026 the time to make a claim will be cut from two years to 90 days, and that providers must keep records of payment and receipt of NDIS funds for seven years, with a civil penalty for failure to retain them.

Aged unlodged work in progress is a warning rather than a receivable, and under the shortened window it may cease to be claimable. The mix of NDIA-managed, plan-managed and self-managed participants matters too: each is paid by a different party on a different cycle, and self-managed revenue carries trade credit risk that agency-paid revenue does not. The NDIA also pays valid claims faster where the provider is recorded as a my provider for that participant. Working capital, being operating current assets less operating current liabilities, is assessed accordingly.

Step seven: cost the workforce properly

Labour dominates the cost base, so the labour number decides whether the reported margin is real. The Fair Work Ombudsman confirms that the Social, Community, Home Care and Disability Services Award, known as SCHADS, covers personal care workers supporting a person with disability in their home, home care workers and supervisors in a group home. It also confirms that minimum award wages rose by 4.75 per cent from the first full pay period on or after 1 July 2026, and lists the new payday super rules among the workplace law changes starting on the same date. Both add to a labour intensive provider's cost base.

Award rates feed the NDIA's disability support worker cost model, which estimates the cost of a billable hour of support and sits behind the published prices. The price therefore assumes a modelled cost structure, and a provider whose roster departs from it, through penalty hours, sleepover and active night arrangements, casual loading, minimum engagements, travel or agency staff, absorbs the difference in its margin.

Registration conditions add cost. The Commission lists the NDIS Practice Standards and Code of Conduct, complaints and incident management systems, Worker Screening clearances for risk-assessed and key personnel roles, notification and quality audit requirements among them. Where a subcontractor delivers supports under another provider's registration, the registered provider must claim the payment and stays responsible for those supports, a risk the buyer inherits. Payroll tax treatment of contractor arrangements differs between states and should be confirmed with your accountant. The clinical workforce shapes healthcare business value more broadly.

Step eight: choose a method and apply it

For an established provider with a settled earnings history the usual approach is capitalisation of future maintainable earnings: the step four figure multiplied by a multiple reflecting the risks above. A stronger multiple follows diversified participants, a registered and audited entity, documented systems and a stable workforce. A weaker one follows key-person risk, being the risk that earnings fall when one individual leaves. Key-person risk and goodwill are the same question seen from two sides. Goodwill is value above identifiable net assets, and a buyer pays only for the transferable part: systems, staff, referral sources and documented participant relationships rather than the owner personally. Where registration does not travel with an asset sale, some of what looked like goodwill is the buyer's own registration doing the work.

Capitalising EBITDA or EBIT produces enterprise value, the value of the operations as a whole, independent of funding. Equity value, what the shares or units are worth, is enterprise value less net interest-bearing debt plus surplus assets, tested against whether the business is delivered with a normal level of working capital.

Two alternatives apply in defined circumstances. A discounted cash flow, which values forecast cash flows at a rate reflecting their risk, suits earnings about to step up or down for a known reason, as many providers face over 2026 to 2028. A net asset approach, being assets less liabilities with book values restated to market or realisable amounts, is usually primary for an SDA property entity and a reference point where earnings do not support goodwill. Market evidence informs any multiple selected, but in this sector it usually works as a cross-check rather than a primary method: transactions are mostly private, prices are rarely disclosed on comparable terms, and reported figures mix asset and share sales, service mixes and registration positions. Healthcare business valuation methods compares the approaches.

Where shares rather than the whole business are valued, the size of the interest matters. A controlling interest can set strategy, appoint management and direct distributions; a minority interest cannot, and is typically worth less per share. Whether that difference is reflected depends on the purpose, the shareholders agreement and the basis of value, which is why a share valuation is scoped first.

What a buyer will scrutinise

Diligence follows a predictable path. A buyer will ask for revenue by participant, support category and management type; plan end dates and utilisation; claim ageing and rejection rates; the certificate of registration and its conditions; audit reports and corrective action plans; incident, complaints and worker screening records; and rostering, award classification and service agreement records. Each answers one question: will these earnings still be here after the owner leaves? What reduces the value of an NDIS business sets out what most often lowers it.

Where this leaves an owner

An NDIS business is valued on evidence, not a rule of thumb: normalised earnings, the funding settings in force at the valuation date, concentration measured rather than described, and a sale structure matched to what registration allows.

Purpose drives the rest. A valuation prepared for a sale or exit, for an incoming or departing shareholder, for a tax event, for a family law matter or for a shareholder dispute can properly reach different conclusions on the same business, because the interest, assumptions, basis of value and date differ. If a change in ownership is in prospect, request a valuation and we will confirm the scope, information and date.

This article is general information only and is not legal, taxation or financial advice.