$3.7b aged care boost welcome, but major gaps remain

The Federal Government’s $3.7 billion funding commitment announced in the Budget is a welcome and much-needed investment in the future of aged care for older Australians, but it does not go far enough to address the scale of the challenge facing the sector.

Juniper CEO Russell Bricknell said while measures in the Budget were an important step towards easing pressure across the system, they failed to recognise demand is growing at a pace that is significantly outstripping current investment.

“It is estimated Australia will require an estimated 10,000 additional residential aged care beds every year over the next two decades to meet demand, yet this year’s Budget commitment falls way short of that target,” Mr Bricknell said.

“Residential aged care facilities are already operating at around 94% capacity nationally and under current funding arrangements we are seeing existing homes struggle to remain financially sustainable.

“Without long-term funding certainty, there is a real risk some providers may be forced to reduce services or close facilities altogether, putting even greater pressure on older Australians and their families.”

The 2026-2027 Federal Budget includes:

• $1.7 billion aimed at incentivising the construction of up to 5,000 aged care beds a year for older Australians. This investment includes $606.5 million to introduce new capital subsidies for providers building or expanding residential accommodation, deliver up to 20 additional specialist dementia care units, and expand the Hospital to Aged Care Dementia Support Program nationally.
• Broader health investments, including $25 billion in additional funding for public hospitals and $1.8 billion to secure the future of Medicare urgent care clinics.
• $1.1billion in future spending to increase and restructure the Accommodation Supplement and introduce additional payments for homes with more than 60% low-means residents, alongside $565.1 million to improve quality, safety and sector viability.
• An additional investment of $389.8 million has also been allocated to accelerate the release of Support at Home packages, extend End-of-Life Pathway funding, support a review of the Integrated Assessment Tool (IAT) and enable the digitisation of the financial hardship assistance process.
• $1billion to fully subsidise and remove co-contributions for personal care services such as showering through Support at Home.

Mr Bricknell added that while these initiatives provide some support for older Australians, particularly those wishing to remain in their homes longer, concerns remain around the growing list of people waiting for home care which currently stands at around 200,000.

“Older Australians overwhelmingly want to age in their own homes and communities, with the dignity, independence and continuity that comes from remaining in familiar surroundings,” he added. “Currently Support at Home packages are being released at only around 60% of their value, leaving many older people without access to the level of care they have been assessed as needing.

“Recent reports show the number of aged care patients stuck in hospitals across the country has risen by more than 35% in less than a year. This sharp increase highlights the growing pressure on the system and the need to boost both home care services and residential aged care places, so older Australians can move into the right care setting sooner and hospitals are not left carrying the load.”

Mr Bricknell added the Budget also failed to include raising the Support at Home care management cap to at least 15%, with a review to see if the current rules are good enough or need updating; and much-needed extra funding for the Commonwealth Home Support Programme, along with proper planning and funding changes to make sure the move into Support at Home is smooth and secure.

“While this Budget delivers positive momentum and signals recognition of the pressures facing aged care, more comprehensive reform and sustained long-term investment is needed to ensure every older Australian can access safe, affordable and appropriate care where they need it,” he added.