The Federal Budget announced by Treasurer Jim Chalmers on Tuesday night has built upon the reforms already taking place, but failed to allocate any money or end the uncertainty providers are facing with the implementation of the new Support at Home model.
Government spending on older Australians has surpassed $100 billion for the first time, between the Age Pension and aged care services, now making up 13% of the Budget.
The Budget allocated $291.6 million over five years to the sector with an additional $12.7 million in 2029-30 to continue implementing aged care reforms.
The Government found money from within the existing resources of the Department of Health and Aged Care by saving:
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$21.2 million over three years from 2024-25 by not proceeding with part of the 2022-23 March Budget measure to trial new models of multidisciplinary care in residential aged care
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$27.7 million in 2025-26 through cost recovery activities under the new charging model of the Aged Care Quality and Safety Commission i.e. charging operators more for audits
The Budget also provided funding to meet requirements under the new Aged Care Act and $2.6 billion for future pay increases for aged care workers which were already announced earlier this month.
Mark Butler, the Minister of Health and Aged Care, said in a statement the investment of $2.6 billion in a further pay rise for 60,000 aged care nurses, "delivers fair pay for the workers and nurses who care for older Australians."
Other key points include:
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The Budget confirmed again that the Government will transition to paying residential aged care providers in arrears rather than in advance (as they currently do) for provision of service over two years from July 2026. This move will save $2.5 billion over three years from 2025-26 and $234.1 million per annum thereafter.
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Furthermore, the Government is still seeking to link AN-ACC funding to delivery of care minutes from 1 April 2026 (based on data for the December 2025 quarter) for residential aged care providers in metropolitan areas. Adjustment to the Registered Nurse supplement will provide $233 million in savings over four years and $109.7 million per annum thereafter.
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The $2.6 billion to increase the award wages of aged care nurses from 1 March 2025 over five years will include $90 million allocated to aged care workers on top of the $2.5 billion set aside for Registered Nurses. This brings the investment into wage increases in the sector to a total of $17.7 billion – incidentally, the same figure that the Morrison Government originally delivered in response to the Aged Care Royal Commission’s recommendations.
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$48.7 million to support all assessment providers, public and private, to support implementation of the New Aged Care Act and Support at Home.
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$60.3 million for Aboriginal and Torres Strait Islander Aged Care Assessment Organisations – culturally safe, trauma aware and healing informed aged care assessments for older Aboriginal and Torres Strait Islander people.
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$116.1 million in funding for the Aged Care Quality and Safety Commission (ACQSC) to deliver existing and new regulatory functions under the new Aged Care Act.
