For educational purposes only. Not tax, legal, or financial advice. Tax laws change frequently. Consult a registered tax agent or CPA for your specific situation.
NDIS participant funding is exempt income under ITAA 1997 s 52-180 and is not reported on your tax return. Self-employed NDIS providers, by contrast, must declare all provider income as assessable under ITAA 1997 s 6-5 and register for GST if turnover exceeds $75,000 (though many NDIS services are GST-free under the NDIS GST-free Supply Determination). Assistive technology funded personally (not through NDIS) and used for income-producing work is deductible with apportionment for private use.
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Disability and self-employment in Australia involve two parallel systems that overlap but follow different rules. The NDIS provides funding that is tax-exempt. The ATO taxes business income. The interaction between the two decides whether assistive technology is a personal support or a business deduction, whether your NDIS plan affects your tax return, and whether providing NDIS services as a self-employed worker creates GST obligations.
The reality this serves
Self-employed Australians with disability who interact with the NDIS as participants, providers, or both. The cohort includes people using NDIS funding for assistive technology that also supports their business, people receiving DSP while running a sole trader operation, and people with mobility, sensory, cognitive, or psychiatric disabilities whose self-employment is shaped by workplace modifications and access needs. It also includes the growing number of people with disability who provide NDIS services to other participants as self-employed support workers or therapists.
NDIS participant funding: exempt income
ITAA 1997 s 52-180 exempts from income tax any 'NDIS amount' derived by a participant within the meaning of the NDIS Act 2013. This covers all amounts paid under the NDIS for reasonable and necessary supports funded under a participant's plan, whether plan-managed, self-managed, or NDIA-managed. Payments are exempt income and are not subject to income tax or social security income tests. Any returns (interest) earned on NDIS amounts set aside for future disability expenses are also treated as exempt income. For a participant who is also self-employed, plan funds used to buy supports (therapy, transport, assistive technology) are not assessable business income and are not reported on the tax return. You cannot claim tax deductions for items paid with NDIS funds.
NDIS amounts received by a participant are exempt income and are not included in assessable income for income tax purposes.(ITAA 1997 s 52-180; NDIS Act 2013 s 13)
Self-employed NDIS providers: taxable business income and GST
Where you receive NDIS amounts as a provider of goods or services, those receipts are assessable as ordinary income under ITAA 1997 s 6-5. This applies regardless of whether the payor is the NDIA, a plan manager, or a self-managed participant. You must have an ABN and report business income. Many NDIS-funded supports are GST-free under the GST Act and the NDIS (GST-free Supply) Determination where four conditions are met: the support is reasonable and necessary, it is listed in the Determination, there is a written agreement, and the participant has an active plan. Where these conditions are met, you do not charge GST on invoices to participants, but you can still claim input tax credits on business expenses if GST-registered. If conditions are not met, normal GST rules apply once turnover exceeds $75,000.
Income received by a self-employed NDIS provider for supplying goods or services is assessable business income. GST-free treatment applies where the NDIS (GST-free Supply) Determination conditions are satisfied.(ITAA 1997 s 6-5; A New Tax System (Goods and Services Tax) Act 1999 Division 38; NDIS (GST-free Supply) Determination)
Assistive technology: deductible where used for income-producing work
Screen readers, accessibility software, specialised keyboards and mice, ergonomic furniture, adapted computer hardware, and communication devices are deductible where used to produce assessable income, with apportionment for private use. Stand-alone equipment (adjustable desks, ergonomic chairs, task lighting) is normally claimed via decline in value, with small business instant asset write-off rules applying where eligible. Structural changes (ramps, permanent alterations) are capital works, deductible over time under capital works provisions. Mixed-use modifications (a ramp at the front door used for both business access and personal living) must be apportioned between business and private use based on reasonable metrics. Any NDIS-funded portion is not your expenditure and cannot be claimed as a deduction.
Depreciating assets used for income-producing purposes are deductible via decline in value, with apportionment for private use.(ITAA 1997 Division 40 (decline in value); ITAA 1997 s 8-1 (general deductions))
DSP and self-employment: income test and work capacity
A self-employed person who works less than 15 hours per week may qualify for DSP if their capacity to work 15 or more hours is limited solely by their medical condition. Since 2012, some DSP recipients may remain qualified while working 15 to 30 hours per week, provided they continue to meet medical criteria. Income from self-employment is subject to the pensions income test. Distinguish exempt NDIS participant funding (ignored for income tests) from business profits from providing services (counted and may reduce DSP under the taper). Income from approved self-employment programs (Self-Employment Assistance, formerly NEIS) can be treated differently, with certain program payments excluded from ordinary income under Social Security Act provisions.
DSP recipients may work and retain eligibility subject to medical criteria, hour limits, and the pension income test applied to net business income.(Social Security Act 1991 s 94; Social Security Guide 3.6.1.32)
Allowable expenses in context
Standard sole trader deduction rules apply (ITAA 1997 s 8-1). Disability-specific judgement calls:
Assistive technology for work (screen readers, specialised keyboards, ergonomic furniture, communication devices, adapted hardware): deductible via decline in value with apportionment for private use. Small business instant asset write-off rules may apply. If cost is $300 or less for a non-business income-producing item, an immediate deduction may be available.
Workplace modifications (adjustable desks, task lighting, stand-alone equipment): depreciating assets claimed via decline in value.
Structural modifications (ramps, permanent alterations): capital works deductible over time. The disability purpose does not change their capital nature.
Home-based business running costs: 70 cents per hour fixed-rate method, or actual cost apportionment. For people with mobility impairments, a home-based business is often the only viable setting, supporting treatment as a genuine place of business.
Income protection insurance premiums (held outside super, not bundled with life or TPD): deductible. Benefits received are taxable. Insurers may impose loadings or exclusions for pre-existing disabilities (underwriting risk, not a tax rule).
NOT deductible: items paid with NDIS funds (no double-dipping). Hearing aids and medical devices used solely for personal health. Personal care or support worker costs that enable you to work but are not directly part of providing services to clients.
Support schemes
NDIS participant funding
Eligibility: Permanent and significant disability that substantially reduces functional capacity for daily activities. Assessed by the NDIA. Covers reasonable and necessary supports under an individualised plan (self-managed, plan-managed, or NDIA-managed).
Disability Support Pension
Eligibility: Permanent physical, intellectual, or psychiatric condition that prevents work of 15 or more hours per week. Medical evidence and job capacity assessment required. Some recipients may work 15 to 30 hours and retain eligibility under post-2012 rules.
Inclusive Employment Australia (replaced DES)
Eligibility: DSP recipients and other eligible people with disability seeking employment or self-employment. Replaced Disability Employment Services in late 2025. Provides business mentoring, training, and transition support.
Disability super benefit (early access)
Eligibility: Members with a permanent disability who have ceased gainful employment. Terminal illness provisions allow early access regardless of age. Condition of release assessed by the super fund trustee.
Frequently asked questions
Do I need to report NDIS funding on my tax return?+
No. NDIS amounts received as a participant are exempt income under ITAA 1997 s 52-180 and are not included in your tax return. This applies regardless of whether your plan is self-managed, plan-managed, or NDIA-managed. However, if you receive payments as an NDIS provider (supplying services to other participants), those payments are assessable business income under ITAA 1997 s 6-5 and must be declared. The distinction between participant funding (exempt) and provider income (taxable) is the critical line.
Can I claim a tax deduction for assistive technology that my NDIS plan also partially funds?+
Only for the portion you pay personally that is used for income-producing work. NDIS-funded items are not your expenditure and cannot be claimed as deductions. If you personally fund assistive technology (a specialised keyboard, screen reader software, ergonomic chair) and use it for both work and personal purposes, you claim the work-use proportion as a deduction. For example, if you buy a $1,200 communication device with your own money and use it 60% for business, you deduct $720 via decline in value or instant asset write-off. If NDIS funded $800 of that device and you paid $400, your deductible portion is 60% of $400 = $240.
As a self-employed NDIS provider, do I need to charge GST?+
Most NDIS-funded supports are GST-free under the NDIS (GST-free Supply) Determination, provided four conditions are met: the support is reasonable and necessary, it is listed in the Determination, there is a written agreement between you and the participant, and the participant has an active NDIS plan. Where these conditions are satisfied, you do not charge GST on invoices to participants. You can still claim input tax credits on your business expenses if you are GST-registered. If the conditions are not met (for example, providing non-NDIS services alongside NDIS work), normal GST rules apply once your turnover exceeds $75,000.
What happens to my DSP if I earn income from self-employment?+
DSP is subject to the pension income test. Your net business profit (not gross revenue) is assessed. The income free area for singles is approximately $218 per fortnight, above which DSP reduces by 50 cents in the dollar. NDIS participant funding is exempt and does not count toward the income test. Provider income from supplying NDIS services to others does count. You can work up to 29 hours per week and retain DSP eligibility provided you continue to meet medical criteria. Report changes in earnings promptly to Services Australia, including when disability prevents you from working.