Anthony Albanese’s government has confirmed more than 160,000 people will be kicked off the NDIS – as the scheme's costs blow out of control.

The Albanese government confirmed in April that changes to eligibility rules would seek to lower the number of Australians on the scheme from 760,000 to 600,000 by 2030.

The scheme has previously been projected to cost about $49billion this financial year - and is now more expensive than Medicare.

As more people are diverted away from the NDIS, the government is aiming to divert children with autism who have low to moderate support needs onto the Thriving Kids program.

In his Budget, Treasurer Jim Chalmers announced on Tuesday that $2billion would be used to deliver the program, with funding to be matched by states and territories.

The government has also put aside a further $3billion over five years to establish Foundational Supports outside the NDIS, with funding to be matched by states and territories.

The aim, according to the government, is to rebuild capability in the broader system of community supports for people with disability and thus relieve pressure on the NDIS.

The overall reforms announced in the Budget are expected to save a total of $37.8billion over the next four years, Chalmers has promised, slowing, but not halting, cost increases.

However, the government is hoping a raft of reforms will curb rising costs through increased scrutiny.

This would include setting strict eligibility requirements through standardised, evidence-based assessments and tightening how plans are reassessed.

There will also be an increase in oversight of providers and payments to stop rorts and fraud, as well as strengthening the National Disability Insurance Agency’s investigative and enforcement capabilities.

The National Disability Insurance Agency (NDIA) will provide $49.4million over four years to commission plan management, support coordination and home and living supports for Supported Independent Living participants.

Chalmers’ budget will also see a cash injection of $200million over three years to establish an Inclusive Communities Fund which would rebuild capability among community organisations to host genuine participation activities.