Budget 2026 risks further isolating disabled people
By Mel Smith, Chief Executive, CCS Disability Action
Published 28 May 2026
Budget 2026 makes disabled people's lives more restricted, harder to live in their own communities, and less visible to the rest of the country. That is the implication of the numbers released today, once you read past the headline figures.
This is not the story the Government is telling. Ministers have described recent disability support spending as a record investment of $2.1 billion of additional funding and have linked the latest changes to flexible funding rules to more choice and control. Those are intentions we can really get behind. Unfortunately, they are not what the Estimates show.
What the Estimates show is a Disability Allowance baseline in long-term decline, a one-off return of money the system underspent last year being repackaged as a lift, a clear funding tilt away from community-based supports toward residential ones, and a quiet cut to the small ministry whose job is to advocate for disabled people inside Government. Taken together, the choices in this Budget make it harder for disabled people to live ordinary lives alongside everyone else.
And it does not land in a vacuum. From 1 July this year, the Total Mobility subsidy drops from 75 % to 65 %, pushing the user share from 25 % to 35 % – a 40 % increase in out-of-pocket cost on every taxi trip for disabled people who cannot use public transport. Eligibility for disability supports has tightened. Waiting lists for assessment and equipment have lengthened. At CCS Disability Action we are sitting with whānau every week who are now choosing between trips to medical appointments and trips to see family, between running essential equipment and heating the house, between food in their pantry and a school excursion for their child. These are not abstract trade-offs. They are kitchen-table decisions, made by people who are doing everything right and still falling behind. Budget 2026 makes those choices harder, not easier.
A Disability Allowance in decline. We would like an explanation.
The Disability Allowance is a small weekly payment for disabled people who can show extra and ongoing disability-related costs no other system covers. Power bills when you need to run equipment. Specialised food. Travel to medical appointments. The shoes that wear out twice as fast because of how you walk. It is the difference, for many whānau we work with, between getting through the week and not.
According to the Treasury's Vote Social Development estimates, the Disability Allowance baseline falls from $326.5 million in 2025/26 to $320.6 million in 2026/27. The four-year track is worse. By 2029/30 it is forecast to drop to $279 million, a real-terms decline of roughly 15 % from where it sits today.
This is happening against a backdrop of severe and rising hardship. The latest child poverty statistics from Stats NZ, summarised by the Child Poverty Action Group, show 26.9 % of disabled children are living in material hardship, more than double the rate for non-disabled children. Where a household includes a disabled member, 27.5 % of children in that household are in material hardship, compared with 8.4 % of children in households with no disabled members. Whaikaha's own analysis shows the median disposable income for disabled households was $45,693, compared with $56,485 for households with no disabled people.
The disabled population is growing, not shrinking. The cost of living for disabled households is rising, not falling. International evidence is clear, lifting disability-related income supports moves the dial on hardship. Against all of that, the Disability Allowance baseline is forecast to fall every year through to 2029/30.
We would like the Government to explain that. What is the rationale for a declining Disability Allowance baseline at a time when the disabled population is growing and disabled households are disproportionately in hardship? If there is a policy reason other than a wider intention to make welfare support harder to access, we would love to hear it. Disabled people and their whānau are entitled to that explanation in plain language.
A refund is not a record investment
Disability Support Services rises from $2.557 billion in 2025/26 to $2.933 billion in 2026/27, a lift of $376 million on the face of it. Read the supporting Vote documents and the picture changes. A substantial share of that uplift, around $176 million, is an expense transfer of funds underspent during the 2024–2025 flexible funding pause.
In plain terms, it is the return of money the system did not pay out while disabled people and their whānau went without supports they were entitled to. The Budget documents themselves make clear it does not carry forward into future years.
That is not investment. It is the closing entry on a year in which the system held back what disabled people were owed. To present it as a record commitment is to ask families who waited months for flexible funding to applaud the money they should already have had.
Community living is being squeezed. Residential support is being protected.
The most consequential pattern in this Budget is not in the headline numbers. It is in the split between different funding lines.
Funding for community-based supports is squeezed. Residential-based support is protected and in places lifted. As an organisation that works alongside disabled people in their own homes, in schools, and in their neighbourhoods every day, we see exactly what that signal does. It tilts the system away from the flexible supports that let people live in their own communities alongside everyone else.
This runs against three decades of disability policy in Aotearoa New Zealand and against the principles of Enabling Good Lives, which every recent government has claimed to support. Choice and control over your own life are not optional extras. They are the policy. A Budget that reduces the means by which disabled people exercise that choice, while protecting the settings that constrain it, is a Budget that has quietly walked away from the policy commitment.
A smaller ministry, a smaller voice
The Spinoff's Budget 2026 wrap reports a $1.46 million cut to Whaikaha - Ministry of Disabled People, justified in the Government's own words as "optimising aspects of the operating model" and "realising benefits from the investment in artificial intelligence".
Whaikaha is already small. It is the only part of Government whose entire job is to advocate for disabled people inside the machinery of the state. Trimming it on Budget Day, on the basis that AI will pick up the slack, is a signal about how much disabled people's representation is worth at the Cabinet table.
A smaller advocacy ministry means a smaller disabled voice in Government at the moment that voice is most needed.
What CCS Disability Action is asking
CCS Disability Action is calling for three things. Each one is specific, achievable, and within the Government's power.
Lift the Disability Allowance and Child Disability Allowance rates in line with the actual cost of being disabled. The current rate has not kept pace with inflation, energy costs, or the documented additional costs of disability. The forward track to 2029/30 must be revised upwards, not down.
Rebalance the Disability Support Services settings toward community-based supports. The 2026/27 uplift must be carried forward in real terms, and the share that goes to flexible, community-based supports must grow, not shrink, in future Budgets. Disabled people, their whānau, and the providers who walk alongside them cannot plan ordinary community lives around one-off transfers.
Reverse the cut to Whaikaha -Ministry of Disabled People and resource it to do its job. The advocacy function inside Government is not a place to find savings. If artificial intelligence is delivering efficiencies, reinvest them in disabled-led policy work, not in a thinner Ministry.
The standard we will hold the Government to
Budgets are not really about numbers. They show whose lives a government believes are worth investing in, and whose can be quietly restricted without political cost. On the evidence in front of us today, this Budget bets that disabled people sit in the second group.
We do not accept that bet. Disabled people are 1.1 million New Zealanders. They are whānau. They are our neighbours, our colleagues, our tamariki, and the people we walk alongside every day at CCS Disability Action. They are not a line item to be trimmed when the books need balancing.
To disabled people, their whānau, and the communities who stand with them: you are not asking for too much. The cost of being disabled in this country is real, and it has been quietly transferred onto your kitchen tables for long enough. To every New Zealander who believes their neighbours, classmates, colleagues, and family members deserve to live full lives in their own communities: this is the moment to say so out loud. A country that narrows the lives of one in five of its people is a smaller country for all of us. We can choose differently.