It applies to people aged up to 65 and was first recommended by the Productivity Commission in 2011.
Assessments made under the scheme are intended to take into account the lifelong nature of the disability and provide long-term funding.
Stage One of the scheme will be launched on July 1 in South Australia, Tasmania, and parts of New South Wales and Victoria, and will replace the current state-by-state system.
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The newly-announced increase to the Medicare levy will come into effect on July 1, 2014, and is intended to raise an additional $3.2 billion per year.
However the proposed Medicare levy increase will only cover a portion of the costs associated with launching the NDIS: in total the scheme is expected to cost $8 billion a year to launch.
Once fully operational, the NDIS is expected to cost $15 billion per year.
