I am a disability support worker in Australia, and this decision is abhorrent for many reasons.
The NDIS is meant to fund participants so they can do the things anyone without a disability can do that are reasonable and necessary.
Sex work is legal in Australia and sexual gratification is a normal human need for most.
Most people without a disability are able to masturbate or have sex, yet many of those with a disability cannot without assistance.
Bear in mind also that sex work in this context does not just mean hiring prostitutes, but also those who help disabled couples have sex. Those people might be considered sex therapists, but more commonly they are a subset of sex worker.
Many of the people I have worked with are unable to move much by their mid 20's. These are smart people, like getting their PhD smart. They can move their hands to drive their chair, but that's about it.
Can you imagine being in your sexual prime and being denied any sort of sexual gratification?