Starting 1 April 2026, significant updates will be introduced to simplify how flexible funding is managed. These changes are designed to give people greater control, flexibility, and choice when using their funding for disability-related support.
The removal of purchasing rules means individuals will have more freedom in deciding how to spend their allocated funds. However, certain responsibilities will still apply to ensure the funding is used appropriately.
This guide provides a clear overview of what is changing, who the changes affect, how flexible funding can be used, and what support will be available to help people manage their funding effectively.
Overview of Flexible Funding Changes
The upcoming reforms aim to make flexible funding easier to use while maintaining accountability. These changes apply to individuals receiving:
- Carer Support
- Hosted Flexible Funding
- Individualised Funding
- Some Enabling Good Lives (EGL) Personal Budgets
However, the changes do not apply to Choice in Community Living funding.
Key Changes Taking Effect on 1 April 2026
From April 2026, several adjustments will take place:
- Current flexible funding budgets will remain unchanged
- Existing purchasing rules will be removed
- Hosts will provide greater guidance and support to help individuals manage their funding according to their plan
Additional detailed guidance and processes are expected to be released closer to the implementation date.
Understanding Hosted Flexible Funding
Hosted flexible funding allows individuals to manage their own disability supports while receiving administrative help from a Host organisation.
This arrangement typically includes:
- Individualised Funding
- Certain Enabling Good Lives Personal Budgets
The Host assists with tasks such as financial management, record keeping, and ensuring funds are used correctly according to the individual’s support plan.
Responsibilities for People Using Flexible Funding
Although purchasing rules will be removed, individuals must still follow specific responsibilities when using flexible funding.
Key Responsibilities Include
People receiving hosted flexible funding must:
- Use the funds only for disability-related supports aligned with their approved plan
- Manage their spending carefully so the funding lasts throughout the entire funding year
- Maintain accurate records, including receipts, invoices, and employment documentation if support workers are hired
- Submit receipts and invoices to their Host organisation
- Request approval in advance for certain types of spending
Hosts play an important role in helping individuals understand and meet these responsibilities.
What Flexible Funding Can Be Used For
Flexible funding can be used for a variety of supports and services as long as they meet the goals outlined in the person’s support plan.
Examples of Eligible Uses
Flexible funding may be used for:
- Disability support services
- Assistive equipment
- Support workers
- Activities that improve independence and wellbeing
- Services that align with the person’s support plan
A person’s plan may include:
- Individual Service Plan
- Enabling Good Lives Funding Plan
- My DSS Funding Plan
If individuals are unsure about what their funding covers, they should contact their Host, NASC (Needs Assessment and Service Coordination), or EGL site for guidance.
What Flexible Funding Cannot Be Used For
Regardless of the changes, some restrictions remain in place.
Flexible funding cannot be used for:
- Drugs
- Alcohol
- Tobacco products
- Gambling activities
- Any illegal activities
These restrictions remain unchanged to ensure funding is used appropriately.
When You Must Seek Approval Before Spending
Although purchasing rules are being removed, certain purchases still require prior approval from the Host.
Situations Requiring Approval
Individuals must contact their Host before spending funds on:
- Overseas travel
- Equipment purchases to ensure the equipment is safe and suitable
- Complementary therapies that are not publicly funded
- Replacing items before the end of their expected lifespan
- Large one-off purchases above certain limits
Approval Thresholds
- Support Tiers 1–3: Approval required for purchases above $1,500
- Support Tier 4: Approval required for purchases above $500
Hosts will provide guidance on how to request approval and what documentation may be required.
Considering Other Government Services
In some situations, the support needed may also be available through other government programs.
Before using flexible funding, individuals and their Hosts or NASC coordinators are encouraged to consider:
- Whether another government service could provide the support
- Whether that support would be delivered adequately and within a reasonable timeframe
This approach helps ensure flexible funding is used efficiently while still meeting a person’s disability-related needs.
Additional Support to Manage Flexible Funding
Beginning in April 2026, Hosts will offer increased guidance and oversight to help people manage their funding effectively.
Every person using Individualised Funding or hosted EGL Personal Budgets will receive some level of support.
Types of Support Provided by Hosts
Support services may include:
- Explaining how the funding plan works
- Helping with claims and documentation
- Providing budgeting advice
- Assisting with hiring support workers
- Reviewing spending to ensure it aligns with the person’s plan
- Offering coaching and financial tracking support
The level of assistance will depend on the person’s support tier.
The Four Support Tiers Explained
A four-tier support system will determine how frequently a Host checks in with individuals and the level of guidance provided.
Hosts will notify individuals of their assigned support tier after April 2026.
The tier assigned depends on:
- The total funding allocated
- The individual’s needs
- Their confidence and experience managing funding
Importantly, support tiers do not affect the amount of funding received.
Tier 1 – Low Support
- Individuals confidently manage their funding
- They handle claims, budgeting, and approvals independently
- Host check-ins occur at least once per year
Tier 2 – Moderate Support
- Individuals manage most tasks but may need occasional assistance
- Host check-ins occur every six months
Tier 3 – Regular Support
- People may be new to flexible funding or prefer regular help
- Hosts provide ongoing support
- Check-ins occur every three months
Tier 4 – High Support
- Individuals require frequent assistance
- All purchases are reviewed with the Host
- One-off purchases above $500 require approval
- Hosts check in at least once per month
Support tiers can change over time as a person’s confidence or needs evolve.
Changes for People Receiving Carer Support
Carer Support is designed to give full-time carers a break from their caregiving responsibilities.
From 1 April 2026, several updates will apply.
Key Changes for Carer Support
- Funding budgets will remain the same
- Purchasing rules will be removed
- The funding must still be used for respite or break-related support
This change allows carers greater flexibility in choosing how they take a break from their caregiving role.
Claims will continue to be submitted through Health New Zealand, and individuals may be required to provide additional documentation such as receipts or invoices.
Spending Rules for Carer Support
While flexibility will increase, some rules still apply.
Carer Support funds:
- Must stay within the allocated annual budget
- Must be used for respite-related support
- Cannot be used for drugs, alcohol, tobacco, gambling, or illegal activities
Certain purchases may still require pre-approval, including:
- Overseas travel
- One-off purchases above $1,500
More detailed guidance about approval processes will be released before April.
Conclusion
The flexible funding reforms beginning on 1 April 2026 are intended to simplify how people manage their disability support budgets while giving them greater independence and control.
By removing strict purchasing rules and increasing guidance from Hosts, the new system aims to balance flexibility with accountability. Individuals will still need to follow responsible spending practices, keep accurate records, and ensure their funding aligns with their support plans.
With the introduction of tiered support levels, improved oversight, and clearer guidance, people receiving flexible funding or Carer Support will have the tools and assistance needed to manage their funding confidently while making choices that best suit their individual needs.
FAQs
When do the flexible funding changes take effect?
The new flexible funding rules will begin on 1 April 2026.
Will people receive more flexible funding?
No. The funding amounts will remain the same, but the purchasing rules will be removed.
Who do the changes apply to?
The changes affect people receiving Carer Support, Individualised Funding, hosted flexible funding, and some Enabling Good Lives budgets.