A decision by the Commonwealth Government to increase residential aged care funding by just 2.55% has put planned investment in new residential aged care facilities at risk, at a time when the number of older Australians waiting in hospital for an appropriate aged care place is accelerating at an unsustainable rate.
The Government has announced the Australian National Aged Care Classification (AN-ACC) price will increase to $303.19 per resident per day from 1 October, in line with advice from the Independent Health and Aged Care Pricing Authority (IHACPA).
However, the daily services or ‘hotelling’ supplement, which helps providers cover costs including food, will remain frozen while the IHACPA undertakes a review.
For Juniper, one of Western Australia’s largest not-for-profit aged care providers, the impact goes beyond the day-to-day cost of providing care. The funding decision has undermined the business case for new residential aged care infrastructure, including a planned 128-bed facility in Northam.
Juniper submitted the Northam project for development approval, with construction intended to commence in late 2026. The facility would provide much-needed additional residential aged care capacity in the region.
Under the new funding settings, however, the project’s business case is now undermined.
The AN-ACC funding announcement has been met with disappointment across the sector, with the latest StewartBrown benchmarking report showing 62% of residential aged care homes are already operating at a loss.
Juniper CEO Russell Bricknell said the decision was particularly concerning given the growing number of older people who cannot access the aged care services they need.
“We are being asked to solve a capacity problem while the settings make it harder to build the very facilities needed to solve it,” Mr Bricknell said. “For Juniper, this isn’t simply about the economics of one project. It means a planned 128-bed facility in Northam that would have provided much-needed care for older people in the region is now at risk.”
The announcement comes at a time when new data shows the number of patients stranded in public hospitals while waiting for Commonwealth-funded aged care placements has increased substantially over the past year.
Nationally, the number has risen from more than 2,700 in mid-2025 to more than 3,600 in mid-2026. Western Australia has experienced one of the largest increases, with the number of older patients waiting in hospital rising from 230 to 423, an increase of around 84%.
Juniper has long argued that public hospitals are not designed as alternatives or substitutes to aged care facilities, with older Australians who are medically ready for discharge known to experience functional decline and reduced quality of life the longer they have to wait.
As WA Health Minister Meredith Hammat said in a joint state and territory health ministers’ media release issued ahead of the Australian Health Ministers’ Meeting on Friday, “older Western Australians deserve a more dignified care setting when they’ve been cleared for discharge.”
Mr Bricknell said ultimately the accessibility of aged care services rests with the Commonwealth and the figures show why Australia needs to look beyond the immediate cost of aged care and consider the broader consequences of failing to invest in capacity.
WA is falling alarmingly behind in meeting the needs of its ageing population, with a State Government-commissioned report finding the state will need between 1,600 and 2,700 additional residential aged care beds by 2030 to meet future demand.
That equates to an estimated $1.8 billion in investment, potentially requiring up to 27 new aged care facilities to be built within four years.
The Supply and Demand Analysis of Residential Aged Care in WA, prepared by EY-Parthenon in March this year for the WA Department of Health, highlights the growing pressure on the sector:
- WA recorded its first decline in residential aged care bed numbers in more than a decade in 2025.
- Investment in aged care construction has fallen by 75% since 2019–20, driven by high construction costs, workforce shortages, policy uncertainty and limited access to capital.
- More than 95% of residential aged care places are occupied, the highest occupancy rate in the country.
“Behind every hospital bed occupied by someone waiting for aged care is an older person who should be in a setting designed around their needs, and another patient who may be waiting for that hospital bed,” Mr Bricknell said. “We cannot keep treating residential aged care capacity as though it is separate from the health system.
“When there aren’t enough aged care places, the pressure simply moves somewhere else – into hospitals, onto families and ultimately onto the wider health system.”
The issue is particularly acute in regional communities, where building and operating aged care facilities can already be challenging due to smaller populations, workforce shortages and higher construction and operating costs.
Mr Bricknell said the Northam project was an example of why funding settings needed to support, rather than discourage, long-term investment.
“If we want older Australians to be able to receive care close to home, we need to make it possible for providers to invest in new facilities where they are needed,” he said. “Regional communities should not have to compete with metropolitan areas for investment. They need certainty that there will be viable aged care services available for their older residents.”
With more than 200,000 older Australians waiting to be assessed or receive Support at Home, pressure is building across both residential and home-based care.
Mr Bricknell said Juniper supported the goal of helping older Australians remain at home for as long as possible, but that this needed to be matched by sufficient investment in residential care for those who could no longer safely live at home.
“We need a system that gives older people real choice – to remain at home when that is right for them, but also to access high-quality residential care when they need it,” he said. “That means having enough places, enough workers and the financial settings to make those services sustainable. At the moment, we’re seeing demand increase while the ability to build new capacity is being squeezed.”
The eight state and territory health ministers have called for increased Commonwealth investment to help address the growing number of older Australians unable to leave hospital because appropriate aged care services are unavailable.
Following their meeting with Federal Health Minister Mark Butler, ministers said further discussions would continue, but no firm commitment to additional funding was made.
Mr Bricknell said the growing hospital backlog should be a warning that Australia could not afford to delay investment in aged care capacity.
“Every month we delay building the capacity we know we need, the pressure on hospitals and families grows,” he said. “The question we should be asking is not just what aged care costs the Government today. We should be asking what it costs when we don’t have enough aged care places and whether we can afford the consequences of that inaction.”
Australia needs roughly 10,000 to 11,000 new residential aged care beds every year – equating to about $56 billion by 2050 – to keep pace with population ageing and demand.
Recent analysis found only around 800 net new residential aged care beds were added in 2024-25, while the number of residents needing care grew by about 5,000 people.
Juniper will continue to advocate for funding and policy settings that support sustainable aged care services and allow providers to invest in the additional residential capacity needed across Western Australia, particularly in regional communities.
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