From 1 April 2026, New Zealand will introduce major updates to how flexible funding is managed, aiming to simplify processes and give individuals greater choice and control over their support services.
These changes primarily affect people receiving:
- Carer Support
- Hosted flexible funding (including Individualised Funding and some Enabling Good Lives personal budgets)
However, these updates do not apply to Choice in Community Living.
Key Changes Effective from April 1, 2026
Several important updates will take effect:
- Existing funding budgets will remain unchanged
- Current purchasing rules will be removed
- Increased support will be provided by Hosts to assist with managing funds
The goal is to make funding easier to use while maintaining accountability.
Understanding Hosted Flexible Funding Responsibilities
Hosted flexible funding allows individuals to manage their own support plans with assistance from a Host. Even without purchasing rules, users must still meet certain responsibilities:
- Spend funds only on approved disability-related supports aligned with their plan
- Stay within their allocated budget throughout the funding year
- Maintain accurate records, including receipts, invoices, and employment details
- Submit all documentation to their Host
- Seek prior approval when required
Hosts play a key role in guiding individuals and ensuring compliance.
What Flexible Funding Can and Cannot Be Used For
Allowed Uses
Flexible funding can be spent on:
- Support services
- Equipment
- Activities aligned with a person’s disability needs and approved plan
If there is uncertainty, individuals can consult their Host, NASC, or EGL site.
Prohibited Uses
Funding cannot be used for:
- Alcohol, drugs, or tobacco
- Gambling
- Any illegal activities
When Prior Approval Is Required
Individuals must consult their Host before making certain purchases, including:
- Overseas travel
- Equipment purchases (to ensure suitability and safety)
- Complementary therapies not publicly funded
- Replacing items before their expected lifespan ends
- High-value one-off purchases:
- Up to $1,500 for tiers 1–3
- Up to $500 for tier 4
Detailed approval processes will be clarified closer to April.
Considering Other Government Services
Before using flexible funding, individuals are encouraged to check whether other government services can meet their needs in a timely manner.
This approach ensures efficient use of funding while still allowing flexibility if alternative services are not suitable.
Enhanced Support from Hosts
From April onward, Hosts will offer expanded assistance, including:
- Helping individuals understand their plans and budgets
- Supporting claims and record-keeping
- Providing guidance on budgeting and employing support workers
- Monitoring spending to ensure it aligns with the plan
- Offering regular check-ins based on support needs
Four-Tier Support System Explained
A new four-tier support structure will determine the level of assistance each individual receives:
Tier 1 – Minimal Support
- Independent management of funding
- Annual check-in from Host
Tier 2 – Moderate Support
- Occasional assistance required
- Check-ins every six months
Tier 3 – Regular Support
- Frequent guidance for newer users
- Check-ins every three months
Tier 4 – Intensive Support
- Ongoing assistance and close monitoring
- Monthly check-ins
- Lower approval threshold for purchases
The assigned tier depends on funding levels, experience, and confidence in managing funds. Tiers may change over time but do not affect funding amounts.
Changes for Carer Support Recipients
For those receiving Carer Support, the following updates apply:
- Budgets will remain unchanged
- Purchasing rules will be removed
- Funds must still be used for respite care to give carers a break
- Claims will continue through Health New Zealand
Additional requirements include:
- Providing receipts or invoices when requested
- Staying within the allocated budget
- Seeking prior approval for specific expenses, such as overseas travel or large purchases
As with flexible funding, prohibited uses remain unchanged.
Conclusion
The flexible funding reforms set to take effect in April 2026 aim to provide greater flexibility and autonomy while maintaining accountability. By removing purchasing rules and introducing structured support through Hosts, the system is designed to empower individuals to better manage their funding according to their needs. However, clear responsibilities, proper planning, and ongoing guidance will remain essential to ensure funds are used effectively and sustainably.
FAQs
What is the main change to flexible funding from April 2026?
The removal of purchasing rules, allowing greater flexibility in how funding is used.
Will funding amounts change under the new system?
No, existing budgets will remain the same.
Do users still need approval for certain purchases?
Yes, prior approval is required for specific expenses like overseas travel and high-value items.