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Federal Budget: What's in it for aged care

Delivering what they describe as a "once in a generation change to aged care", the Federal Government unveiled the Budget on May 11, providing $17.7 billion over the next five years to the aged care sector to deliver quality care to older Australians.

The aged care sector will be receiving $17.7 billion over the next four years to completely reform the industry. [Source: Shutterstock]

This Budget was the Government's response to the Royal Commission into Aged Care Quality and Safety's Final Report, and they have provided extensive funding to most areas of aged care.

The aged care funding allocated in this year's budget has been broken down to five pillars that the Government will implement over five years. They are:

Pillar 1 - Home Care: 

  • $7.5 billion to support older Australians to remain living at home; 

  • 80,000 new Home Care Packages, costing $6.5 billion, that will be released over 2021-22 and 2022-23; 

  • $10.8 million to design and plan a new support in home care program; 

  • $798.3 million to support 1.6 million informal carers, including additional respite services for 8,400 older Australian each year; 

  • $272.5 million for enhanced face to face services and support for older Australian accessing the aged care system.

Pillar 2 - Residential aged care services and sustainability: 

  • $7.8 billion towards residential aged care services; 

  • $3.9 billion to increase front line care (minutes) delivered to aged care and respite service residents, mandated 200 minutes per day including 40 minutes with a Registered Nurse;

  • $3.2 billion to support aged care providers to deliver better care, including through a new Government-funded Basic Daily Fee Supplement of $10 per resident per day;

  • $102.1 million to assign aged care plans directly to older Australians and support providers to a more competitive market;

  • $49.1 million to expand the Independent Hospital Pricing Authority;

  • $189.3 million for a new Australian National Aged Care Classification;

  • $5.5 million to reform residential aged care design.

Pillar 3 - Residential aged care quality and safety:

  • $942 million to drive systemic improvements to residential aged care;

  • $365.7 million to improve access to primary care for older Australians and the transition between aged care and health care settings, and improve medical management;

  • $262.5 million for the Aged Care Quality and Safety Commission (ACQSC) to address failures in care;

  • $7.3 million for additional resources to build capacity for nursing homes to care for older Australians with dementia;

  • $67.5 million for the Dementia Behaviour Management Advisory Service and the Severe Behaviour Response Teams to reduce restrictive practices;

  • $200.1 million to introduce a new star rating system to highlight the quality of aged care services and better inform senior Australians and their families and carers;

  • $94 million to expand independent advocacy.

Pillar 4 - Workforce:

  • $652.1 million to grow a skilled workforce;

  • Upskilling the existing workforce and providing training to new aged care workers, including 33,800 subsidised Vocational Education and Training places;

  • $228.2 million for a single assessment workforce to undertake all assessments;

  • $135.6 million to provide eligible Registered Nurses with financial support of $3,700 for full time workers and $2,700 for part time workers, nursing scholarships and places in the Aged Care Transition to Practice program;

  • $9.8 million to extend the national recruitment campaign.

Pillar 5 - Governance:

  • $698.3 million to improve aged care system governance;

  • $21.1 million to establish a National Aged Care Advisory Council, a Council of Elders, and to establish an office of the Inspector-General of Aged Care;

  • $630.2 million to improve access to aged care services for consumers in regional, rural and remote areas;

  • $13.4 million to improve rural and regional stewardship of aged care;

  • Drafting of a new Aged Care Act by mid-2023.

The Government says these pillars will be implemented over a five year period, which they have outlined on the Government Health website.

Phase One (2021) will have the Government focussing on the foundations of "generational change", including key structural and governance change in the aged care system, building the workforce and addressing immediate priorities within the five pillars.

Additionally, the Government also released its formal response to the Royal Commission's Final Report on Budget Day.

In the foreword of the response, Prime Minister Scott Morrison says, "Respect for senior Australians is, and must be, a national priority. Out of respect comes all that we value in the care of our ageing loved ones: dignity, quality and safety.  As a nation, these are our goals for the aged care system.  

"...The 2021–22 Federal Budget provides a comprehensive response to the Royal Commission’s final report. The proposed $17.7 billion aged care reform package is designed to deliver sustainable quality and safety in home and residential aged care services.

"This once in a generation opportunity to confront the inadequacies in aged care will bring real change to the system."

The Government have also accepted 126 of the 148 Final Report recommendations - they support four alternative recommendations, will further consider 12 recommendations, and six recommendations were not accepted.

The recommendations the Government did not accept include:

  • Recommendation 127: Fees for residential aged care - ordinary costs of living.

  • Recommendation 128: Fees for residential aged care accommodation (Commissioner Pagone).

  • Recommendation 129: Changes to the means test (Commissioner Pagone).

  • Recommendation 138: Productivity Commission investigation into financing of the aged care system through an Aged Care Levy.

  • Recommendation 140: Fees for residential aged care accommodation (Commissioner Briggs). The Government does not support the first point of this recommendation and will be further considering points 2‐7 of this recommendation.

  • Recommendation 141: Changes to the means test (Commissioner Briggs).

  • Recommendation 144: Introduce a new earmarked aged care improvement levy.

To read the full Australian Government response to the Royal Commission recommendations, visit the Government Health website.


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