NDIS Core Funding vs Capacity Building: What Is the Difference?

NDIS Core funding pays for the support you need right now: support workers, consumables, and transport. Capacity Building funding pays for therapy and skill development to build independence over time. Psychology, behaviour support, occupational therapy, and speech pathology typically fall under Capacity Building. Core covers "today"; Capacity Building covers "tomorrow." Each has different flexibility rules, and understanding the distinction early makes it easier to plan services across the year.

This is one of the first things participants and families encounter when they receive a plan. Your support coordinator can walk you through how your specific plan is structured, but knowing the basics before that conversation makes it more productive.

What Does Core Funding Cover?

Core funding has four sub-categories.

Assistance with Daily Life

Support workers who help with personal care, household tasks, meal preparation, and daily routines. This is typically the largest portion of a Core budget.

Consumables

Items that need regular replacement: continence products, low-cost assistive technology under $1,500, and personal care items related to disability.

Social and Community Participation

Support worker hours for accessing the community. A support worker accompanying a participant to a social group, recreational activity, or community event. The worker's time is the funded component, not the activity itself.

Transport

Funding for transport costs related to disability. This might be a contribution toward taxi fares, specialist transport, or vehicle modifications. It does not cover standard transport costs that anyone would pay.

Core funding is generally flexible across these sub-categories. If you underspend on transport, those funds can typically be redirected toward support worker hours without needing a plan change. This flexibility does not extend to Capacity Building.

What Does Capacity Building Cover?

Capacity Building is split into multiple categories. Each category is its own budget with its own line items underneath it. Three are most relevant for participants receiving therapy and behaviour support.

Improved Daily Living

This is where most therapy sits. Psychology aimed at building functional independence, occupational therapy developing daily living skills, and speech pathology building communication capacity are all claimed under Improved Daily Living. Each of these disciplines has specific line items within the category that providers claim against. Within Improved Daily Living, there is flexibility to use funding across different allied health disciplines, provided the supports align with your plan goals.

Improved Relationships

Positive Behaviour Support sits here. A behaviour support practitioner developing and implementing a behaviour support plan, conducting functional behaviour assessments, and training support networks is funded under Improved Relationships. This is a separate category from Improved Daily Living, with its own distinct line items. A psychologist and a behaviour support practitioner working with the same participant draw from different Capacity Building categories, even if the participant experiences the work as related.

Improved Relationships is typically a stated support, meaning the funding is specifically allocated for behaviour support and cannot be redirected to other purposes.

Support Coordination

Support Coordination is its own Capacity Building category, not a line item within another category. It funds a support coordinator to help connect participants with providers, manage plan implementation, and coordinate services. Like Improved Relationships, it has its own budget and its own line items within it.

How Does Flexibility Work?

The key distinction: Core funding is flexible across its sub-categories. Capacity Building funding is flexible within each category but not across categories.

This means you can use Improved Daily Living funding across different therapy disciplines. If your plan has $12,000 in Improved Daily Living, you can split that between psychology and occupational therapy in whatever proportion works. If you decide to increase psychology sessions and reduce OT, you can do that within the same category without requesting a plan change.

What you cannot do is move funding between Capacity Building categories. If your Improved Daily Living budget runs out but your Improved Relationships budget is untouched, you cannot redirect the behaviour support funds to pay for more psychology sessions. They are separate budgets.

Stated supports

Some supports within a plan are stated, meaning the funding is locked to a specific purpose or provider type. Behaviour support is commonly stated. If your plan states funding specifically for behaviour support under Improved Relationships, that allocation can only be used for behaviour support. There can also be stated line items within the category that restrict spending further.

Your support coordinator or plan manager can clarify which parts of your plan are stated and which are flexible. This is worth checking before services begin.

What Should You Know When Starting Your First Plan?

Providers claim against specific line items

Each Capacity Building category contains line items from the NDIS Pricing Arrangements. Providers claim against these line items, and the system routes the claim to the correct budget automatically. A behaviour support practitioner claims under Improved Relationships line items. A psychologist claims under Improved Daily Living line items. You cannot accidentally spend from the wrong category because the claiming structure prevents it.

Psychology and behaviour support come from different budgets

This is the one that catches people off guard. If you are receiving both psychology (Improved Daily Living) and Positive Behaviour Support (Improved Relationships), these are two separate budgets. When planning session frequency at the start of the plan, account for both allocations independently. Your support coordinator can help map this out so neither budget runs short unexpectedly.

Funding periods vary by support type

Not all budgets are released on the same schedule. Since May 2025, the NDIA can release funding in different periods depending on the support type. Some budgets release quarterly, some monthly, and some are made available upfront for one-off supports like assistive technology. How your Capacity Building funding is released depends on how your plan is structured. Your plan manager or support coordinator can confirm the release schedule for each category.

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If you are looking for Positive Behaviour Support, psychology, or neuropsychology services, Outcomes Lab works across Melbourne, VIC and Port Lincoln, SA. Our team is neuroaffirming, NDIS-registered, and focused on practical outcomes.

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About the Author

Julian Vilsten

Founder, Outcomes Lab | Clinical Neuropsychologist | Advanced Behaviour Support Practitioner. MClinNeuro, BBNSc (Hons)

With over a decade of clinical experience, Julian combines neuropsychology with practical behaviour support. He is dedicated to neuroaffirming practice and building support systems that champion autonomy and genuine well-being.

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