Use commas instead of semicolons for array declaration. You should use array() syntax to be compatible with lower versions of PHP.
$output = array(
// Read the settings file into an associative array so that we can use it.
'settings' => json_decode( file_get_contents( $settings_file ) , TRUE ), // <- Commas not semicolons
// grab the username
'username' => $settings['username'], // <- Commas not semicolons
// grab and decrypt the password
'password' => decrypt_string( $settings['password'] )
);