Funding withdrawn from psychosocial program on mistaken assumption all clients will be eligible for national disability insurance scheme

Hundreds of Australians in a support program for severe mental health issues are falling through the cracks of the national disability insurance scheme, renewing fears that the landmark reform is leaving gaps in psychosocial services.

The federal government is preparing to slowly cut its funding to a widely used support and recovery service for people severely impacted by mental illness, known as the personal helpers and mentors (Phams) program.

Related: NDIS: people with severe mental health problems being denied access on 'a daily basis'

Related: Disability sector risks losing volunteers over NDIS uncertainty, groups warn

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Mental health is a level of psychological well-being, or an absence of a mental disorder; it is the "psychological state of someone who is functioning at a satisfactory level of emotional and behavioral adjustment".