PSD to DIP Transition Victoria: What Changed and What It Means for Your Child

If your child was funded under the Program for Students with Disabilities (PSD) — or if you were told they didn't qualify for PSD — the ground has shifted. Victoria has completed its statewide transition to the Disability Inclusion (DI) model. The Department of Education stopped accepting new PSD applications at the start of Term 1, 2026. What existed before is gone, and the new system works very differently.

This is not just an administrative rebrand. The principles, the assessment process, the funding thresholds, and the role parents play have all changed substantially.

Why the PSD Was Replaced

The PSD was introduced decades ago and was built around medical diagnosis categories. To receive individual disability funding, a student had to have one of seven specific conditions: physical disability, visual impairment, hearing impairment, severe behaviour disorder, intellectual disability, autism spectrum disorder, or severe language difficulties with critical educational needs.

The problem was the gap it created. Approximately 15% of Victorian students needed adjustments to manage their disability at school, but only around 4% qualified for PSD funding. The other 11% — children with significant but differently categorised needs — were left to whatever their school could manage within general budgets.

A 2016 government review identified this inequity and triggered the $1.6 billion reform that became the Disability Inclusion model. It was phased in across five regional rollout stages between 2021 and 2025.

What the DI Model Does Differently

The central change is the assessment basis. Under the PSD, the question was: does this child have a diagnosis from the approved list? Under the DI model, the question is: what level of educational adjustment does this child currently require to participate in schooling on the same basis as their peers?

This functional approach is supposed to capture a broader group of students — including those without a formal diagnosis, those with complex profiles that don't fit neatly into one diagnostic category, and those whose disabilities affect their school functioning in ways the PSD's categories missed.

The DI model funds schools through three tiers:

• Tier 1 — Base student learning funding built into the Student Resource Package for all schools
• Tier 2 — School-level funding calculated from enrolment characteristics, intended to strengthen the school's inclusive practice capacity overall
• Tier 3 — Individual student funding, determined through the Disability Inclusion Profile (DIP) process

Tier 3 replaces what PSD used to provide. But the pathway to it is now entirely different.

How Tier 3 Funding Is Assessed Now

Under the PSD, having the right diagnosis and meeting an educational needs threshold was essentially sufficient. Under the DI model, Tier 3 funding requires a formal Disability Inclusion Profile meeting led by a DET-appointed Disability Inclusion Facilitator.

The SSG (Student Support Group) works through 31 specific school-related activities across six domains: Learning and Applying Knowledge, General Tasks and Demands, Communication, Self-Care, Interpersonal Interactions, and Mobility. For each activity, the group determines what level of adjustment the student requires — from Quality Differentiated Teaching Practice (the baseline) through Supplementary, Substantial, and Extensive.

The Standard Confirmation pathway requires the profile to show Substantial or Extensive adjustments across at least eight of the 31 activities, or Extensive in at least three. Separately, there must be a diagnosed condition from the approved Tier 3 list, or a Vineland-3 Teacher Form score showing severe functional limitation.

This is significantly more procedurally complex than the PSD process was. Families need to prepare carefully for the DIP meeting, not simply present a diagnosis letter.

The NCCD Link: What Schools Are Required to Document

Underpinning both the old and new systems is the Nationally Consistent Collection of Data (NCCD) — a federal annual data collection that counts how many students are receiving educational adjustments and at what intensity.

In 2024, 182,866 students in Victorian government schools were captured in the NCCD, representing 27.6% of the total Victorian student cohort. Nationally, 25.7% of all students received an educational adjustment — up from 18.0% in 2015.

NCCD data matters for families because it confirms what schools are already doing and documenting. If your school tells you they can't provide adjustments for your child, the NCCD is the mechanism through which they're supposed to be recording whatever they're already doing. The Disability Standards for Education 2005 require reasonable adjustments regardless of a student's individual funding status — Tier 3 DI funding is not a prerequisite for adjustments.

What Happens to Existing PSD Students

Students who had existing PSD eligibility are continuing to be processed through the PSD Management System (PSDMS) while that system runs its course. But the DI Profile process is now the pathway for everyone else — including students who previously applied and were rejected under the PSD, and new students entering the system.

If your child was told they "didn't qualify" for PSD, that assessment under the old criteria has no bearing on their DIP eligibility. The functional, activity-based assessment of the DIP may produce a completely different result — particularly for students with conditions like dyslexia, ADHD, anxiety disorders, or complex profiles that the PSD categories couldn't accommodate.

What This Means for Your Advocacy

The transition creates both opportunity and risk. The opportunity: a broader range of students can now access Tier 3 individual funding if the DIP meeting is conducted well and the documentation is thorough. The risk: the process is more complex and more dependent on how parents and schools frame the student's needs during the meeting.

The DET's Parent Voice Tool is one of the primary mechanisms for your input into the DIP process. Completing it thoroughly — describing your child's challenges across the school day, not just what the school currently provides — is essential.

The Victoria Disability Advocacy Playbook at /au/victoria/advocacy/ covers the DIP preparation process in detail, including how to frame your child's functional needs in the adjustment-level language the system uses, and what to do if the outcome doesn't reflect your child's actual needs.

The PSD-to-DIP transition is complete. If you're still navigating it based on how things used to work, you're operating with an outdated map.

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