Federal Court: Satyadharma V NDIA Judicial Review Of NDIS Funding Permitted

• The Federal Court dismissed an application for an interlocutory injunction to restore NDIS funding for a 17-year-old with severe autism and epilepsy.
• The applicant's father argued the National Disability Insurance Agency's reduced funding decisions were legally unreasonable and threatened his son's safety.
• The court found no arguable basis for legal unreasonableness, stating the agency's decisions did not exceed its statutory discretion.
• Despite acknowledging a risk of inadequate care due to the parents' disabilities, the court refused to substitute its own funding decisions for the agency's.
• The ruling emphasizes that merits review at the Administrative Review Tribunal (ART) remains the primary avenue for challenging NDIS funding decisions.

Nevertheless, the court firmly held that it lacked the authority to substitute its own funding decisions for those properly authorized under the statutory scheme governing the NDIS.

The Federal Court of Australia recently considered an urgent application seeking to reinstate disability support funding for a 17-year-old National Disability Insurance Scheme (NDIS) participant. The case, Satyadharma by his Litigation Representative Hryniewiecki v Chief Executive Officer, National Disability Insurance Agency [2026] FCA 1646, involved a young man diagnosed with severe autism spectrum disorder and epilepsy. His father, acting as his NDIS nominee, had requested funding in August 2026 for a post-school transition program, along with essential support worker assistance and transport, as the teenager was transitioning from high school.

However, the National Disability Insurance Agency (NDIA) subsequently reduced the allocated funding through a September plan. Following a further reassessment, an October plan was issued, which provided only limited interim funding. This interim support included 30 hours of weekly assistance on a one-to-two basis, scheduled to last for 24 weeks. The father expressed significant concerns that this reduction in funding posed a direct threat to his son's safety, particularly because both parents live with disabilities that restrict their capacity to provide continuous supervision. He also highlighted that the decreased funding would negatively impact his son's access to crucial speech therapy and physiotherapy services.

Prior to approaching the Federal Court, the father had sought relief from the Administrative Review Tribunal (AAT), requesting a stay of the September plan and the provision of additional transitional supports. The AAT, however, refused this application. Consequently, the father initiated proceedings in the Federal Court, initially intending to appeal the tribunal's decision. The court permitted these proceedings to continue, recharacterizing them as an application for judicial review under section 39B of the Judiciary Act 1903.

The core of the father's argument in the Federal Court was that the NDIA's September and October funding decisions were legally unreasonable. This challenge aimed to scrutinize the lawfulness of the agency's administrative actions, rather than to re-evaluate the substantive merits of the funding decision itself. The father, acting as litigation representative, was permitted by the court to conduct this interlocutory application without legal representation.

The Federal Court ultimately dismissed the application for interlocutory injunctions, concluding that there was no arguable basis to challenge the National Disability Insurance Agency's decisions on grounds of legal unreasonableness. The court found that while the father's arguments clearly articulated his disagreement with the agency's assessment, they did not succeed in demonstrating that the NDIA's decisions had exceeded the statutory discretion granted to its chief executive officer. The court acknowledged that the agency itself had recognized a potential risk of informal care breakdown for the participant.

Despite this recognition, the court noted that the NDIA had considered the specific supports requested by the father to be excessive, disproportionate, and not adequately substantiated by the available evidence. Although the court determined there was no arguable basis for granting relief, it did consider the balance of convenience. For the purposes of the interlocutory application, the court accepted that the reduced funding exposed the teenager to a risk of inadequate care, a situation exacerbated by his parents' disabilities. Nevertheless, the court firmly held that it lacked the authority to substitute its own funding decisions for those properly authorized under the statutory scheme governing the NDIS.

This ruling in Satyadharma v NDIA Federal Court reinforces the high threshold required for successful judicial review challenges based on 'legal unreasonableness' against decisions made by the National Disability Insurance Agency. Lawyers advising NDIS participants on funding disputes should note that the Federal Court will not readily substitute its judgment for that of the agency, even when acknowledging potential hardship or risks to the participant. The court's role in judicial review is to assess the legality of a decision, not its merits.

The outcome underscores that while the court may acknowledge the difficult circumstances faced by participants, it will not intervene unless there is a clear demonstration that the agency acted outside its statutory powers or in a manner that is legally unreasonable. This case highlights that merits review at the Administrative Review Tribunal (ART) remains the primary and more appropriate avenue for challenging NDIS decisions on their substantive content and for seeking a re-evaluation of the funding package itself. The ART's merits review for this specific case is still scheduled for December 2026, indicating that the substantive dispute is yet to be fully resolved.

Lawyers advising NDIS participants on funding disputes should note the high threshold for judicial review challenges based on 'legal unreasonableness,' as the Federal Court will not substitute its judgment for the agency's even when acknowledging potential hardship. This case reinforces that merits review at the AAT remains the primary avenue for challenging NDIS decisions on their substance.

Source: Original reporting via Australasian Lawyer