The chair of the agency heading the NDIS has vowed to keep vulnerable people at the heart of the disability program despite funding pressures on the scheme.

The federal government aims to limit growth in the cost of the scheme to eight per cent each year by mid-2026.

The NDIS is on track to cost the public purse more than $50 billion by 2025/26, overtaking annual spending on Medicare.

National Disability Insurance Agency chair Kurt Fearnley said while reform of the system was needed, a growth cap could impact the wellbeing of people with a disability.

“So many people with disabilities, they hear the word ‘cap’ and shudder … I shudder,” he told ABC radio on Monday.

“One of the beautiful things about these games is that we are a demand-driven scheme. The target is a bit of a challenge.

“Often people with disabilities have had their lives defined by people around them.”

Mr Fearnley said there was no denying the scheme needed reform but any changes had to be in the best interests of people with a disability.

“There is not a person with a disability that I’ve spoken to over the last six months since I’ve been in this role that hasn’t agreed that we need reform,” he said.

“It’s all about how we reform and we need to reform around the participant and the participant outcomes.”

The scheme was discussed by state and territory leaders at national cabinet as governments work to make the scheme more financially sustainable.

The Commonwealth is set to fund the majority of the scheme instead of it being a 50-50 split with the states.

South Australian Premier Peter Malinauskas said that funding breakdown was always the intention.

He said the states didn’t have the capacity to fund half of the enormous costs of the scheme as they battled blowout spending on health.

“That is just simply not within the capacity of the state governments, full stop,” he told ABC radio.

“The simple fact is there is not a state or territory government around the nation at the moment that isn’t seeing a huge escalation within their own bills regarding the provision of care in our hospital systems.”

But Mr Malinauskas said governments would work together to ensure the scheme remained viable.

“We do accept that the current rate of growth within the NDIS puts it in an unsustainable position,” he said.

“That’s why we go into this exercise with goodwill. We’ve got to work together on this.”

– AAP