Aged care services for older Australians have significantly improved since the Royal Commission into Aged Care Quality and Safety put aged care on the national agenda – but the reform journey is far from over.
Ageing Australia members have played and will continue to play a key role in this – not only through the services they deliver, but also through their invaluable feedback that informs our policy and advocacy work.
Moving forward, we need further investment as part of this year’s federal budget to achieve a sustainable aged care sector and support the ongoing transformation of how we deliver aged care services in Australia.
In our Pre-Budget Submission 2025-26, published in January this year, we are calling on the Federal Government to address three priority areas, which were informed by our consultation with members and other stakeholders:
■ provide additional funding to ensure quality care can be delivered in a sustainable manner into the future
■ build the aged care workforce to meet demand
■ support providers to implement reforms under the new Aged Care Act and invest in technology and innovation
1. Funding
Chronic underfunding for aged care has led to an unsustainable sector, with most residential aged care homes operating at a loss. In home care, lack of clarity about the Support at Home program, including pricing for services, has created significant uncertainty for providers.
Our recommendations around funding are in line with the Aged Care Taskforce’s recommendations, many of which will be implemented through the new Aged Care Act and aim to ensure future funding arrangements are sustainable.
They also support the provision of quality care and more timely access to home care services for the increasing number of older people who prefer to remain in their homes.
2. Workforce
The aged care sector in Australia continues to face significant workforce shortages. This issue will become increasingly critical in the coming years, as demand for aged care services grows due to older people’s increasingly complex care needs and an ageing population.
In 2024-25, the Department of Health and Aged Care estimated there would be a shortage of approximately 5,900 registered nurses in residential aged care in 2024-25. An undersupply of around 17,550 nurses for the aged care sector by 2035 has also been forecast.
While we welcome the Government’s investment to support increased wages for many aged care workers through the Aged Care Work Value Case, shortages continue in positions that are crucial for meeting mandated workforce responsibilities.
Our recommendations aim to alleviate these shortages by supporting the attraction and retention of aged care workers, particularly in regional areas, and make it easier for providers to navigate the migration system to access migrant workers.
3. Reform
The new Aged Care Act, due to come into effect from 1 July 2025, will introduce a broad range of significant reforms, including changing the way aged care services are funded, establishing a new regulatory model and requiring compliance with the strengthened Aged Care Quality Standards.
Home care is also undergoing fundamental reform, with the new Support at Home program replacing the existing Home Care Packages Program and Short-Term Restorative Care Programme from 1 July 2025 and the Commonwealth Home Support Programme (CHSP) transitioning to the new program no earlier than 1 July 2027.
These reforms will require aged care providers to undertake a wide range of change management activities. Adequate time and support to transition will be critical for the successful implementation of the new Aged Care Act.
Information and Communications Technology (ICT) and innovation – such as telehealth, artificial intelligence and virtual reality – has the potential to play a key role in supporting the delivery of quality care to all older Australians.
However, to date many providers have had limited ability to harness these opportunities due to the financial challenges being experienced by the sector.
Further exploration into innovative models of health and aged care service delivery is also needed to ensure the aged care system will be able to meet the changing needs and preferences of older Australians, including the growing preference to age in place.
Ageing Australia’s key budget asks
■ Fund quality and sustainable aged care services.
■ Adjust funding settings for the Commonwealth Home Support Programme (CHSP) to ensure the CHSP sector remains viable.
■ Alleviate additional cost pressures on aged care from state-based taxes.
■ Establish a taskforce to develop a National Aged Care Workforce Strategy.
■ Boost the aged care workforce across Australia, particularly in regional areas.
■ Improve access to migrant workers to build a sustainable workforce.
■ Transition support to enable providers to implement the new Aged Care Act.
■ Funding for providers to support Information and Communications Technology (ICT) change.
■ Pilot hospital in the home in retirement villages.
Ageing Australia