The costs and sustainability of the National Disability Insurance Scheme will come under scrutiny after the Turnbull government announced the shape of a major review into its future.
Treasurer Scott Morrison said the Productivity Commission inquiry would help shape the final design of the $22 billion scheme - Australia's biggest social policy program since Medicare - which is due to be fully operational and available to nearly 500,000 people by 2019.
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Why the NDIS is a big deal
One of the biggest policy reforms in generations is about to change the lives of hundreds of thousands of Australians.
Under an original agreement between the federal and state governments the review was always scheduled to occur in 2017 but the release of its terms of reference come amid warnings the cost of the scheme could blow out by billions of dollars a year.
"This review is intended to inform the final design of the full scheme prior to its commencement by focussing on updating initial cost projections estimated by the Productivity Commission and by providing advice on longer-term projections and overall sustainability issues," Mr Morrison said in a joint statement with Social Services Minister Christian Porter released late Friday afternoon.
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The review will look at a range of cost pressures and examine "the most appropriate levers to manage any potential cost overruns".
The commission will undertake public consultation and is due to report back to the government by September.
Labor supports the review but said it should not be used as an excuse to cut costs.
"Labor calls on Malcolm Turnbull to give a guarantee to people with disability and their families that the NDIS won't be cut, capped or delayed," said opposition social services spokeswoman Jenny Macklin.
Australian Federation of Disability Organisations chief executive Ross Joyce welcomed Mr Morrison's announcement, particularly the Productivity Commission's involvement.
"It keeps the review one step removed from those delivering the NDIS and those responsible for it," he said.
Without any change to the cross-government agreement, states like NSW and Victoria must increase their contribution to the NDIS by 3.5 per cent from 2018 and 2019, respectively.
In December, Social Services Minister Christian Porter largely replaced the board of the NDIS, bringing in a number of business heavyweights.
The seven new board members brought a "broader set of skills" than the previous team, Mr Porter said at the time and would guide the $22 billion NDIS from a trial of 30,000-person people to providing services to almost 500,000 people.
Helen Nugent, the chairwoman of Australian Rail Track Corporation, was selected as chairman. Her appointment ended the chairmanship of Bruce Bonyhady.
The NDIS was introduced by the former Labor government but its rollout has been largely managed by the Coalition administrations of Tony Abbott and Malcolm Turnbull.
Last year, Fairfax Media revealed the federal government has spent more than $400,000 on analysing risks and problems with the NDIS.
The Department of Social Services spent $355,000 on a report by PwC Australia into the scheme's IT system that caused widespread disruption to payments when it was introduced in July. A further $66,000 was spent on an independent review by senior public servant Robyn Kruk into the readiness of the NDIS for the transition to full roll out across Australia. The review was distributed to a meeting of state and territory ministers in September but has not been publicly released.