$18b aged care budget outlines new care model

The federal budget will fund a new residential aged care model that includes a minimum of 200 care minutes per resident per day as part of a $17.7 billion aged care package.

The federal budget includes almost $8 billion over four years to reform residential aged care with around half of that going toward funding and reporting a minimum of 200 care minutes for residents each day.

Providers will also be required to report care staffing minutes at facility from July 2021 as part of existing annual reporting and to individual residents and their relatives monthly from July 2022.

The funding is part of a five-year $17.7 billion aged care package Treasurer Josh Frydenberg announced on Tuesday night as “practical and targeted new funding to significantly improve the system.”

Other big ticket items include more than $3 billion for a $10 Basic Daily Fee supplement and $6 billion to tackle the home care waitlist with 80,000 new home care packages.

The budget funds the government’s “5 pillar Aged Care Reform Plan” in response to the Royal Commission into Aged Care Quality and Safety and includes $7.8 billion for residential aged care and $7.4 billion for home care.

However, most of the dollars are set to flow in 2023-24 ($5.5 billion) and 2024–25 ($5.5 billion).

Mr Frydenberg said this package brings the government’s investment in aged care to more than $119 billion over the next four years.

“We are committed to restoring trust in the system and allowing Australians to age with dignity and respect,” Mr Frydenberg said on budget night.

Treasuer Josh Frydenberg delivered a $17.7 billion aged care budget

Residential aged care

The budget includes $3.9 billion to increase the amount of frontline care delivered to residents of aged care and respite services.

Aged care homes will be required to provide at least 200 minutes to residents per day including 40 minutes with a registered nurse from 1 October 2023. This measure also funds a registered nurse on site for a minimum of 16 hours a day.

From July 2021, there’s $3.2 billion for a Basic Daily Fee supplement of $10 per resident per day for provider who report on the adequacy of daily living services, and the continuation of the 30 per cent increase in the homelessness and viability supplements.

On structural reform, there is $117.3 to discontinue the Aged Care Approvals Round and bed licence process from 1 July 2024, implement a new Refundable Accommodation Deposit Support Loan Program and strengthen financial reporting requirements for residential aged care providers.

Other measures include:

  • $279.8 million to continue temporary financial supports and the Viability Fund to 2022-23
  • $189.3 million over four years from 2020-21 to implement the Australian National Aged Care Classification (AN-ACC) as the new funding model from October 2022
  • $49.1 million for the current independent hospital pricing authority to help ensure that aged care funding is directly related to the cost of care
  • $102.1 million to assign residential aged care places to recipients from July 2024, and support providers to adjust to a more competitive market
  • $5.5 million to reform residential aged care design and planning to better meet needs, particularly for those  living with dementia.

Home care

The home care funding includes $6.5 billion over four years for 80,000 additional home care packages over two years from 2021-22 to reach 275,598 packages by June 2023.

In home care there’s also:

  • $798.3 million to provide additional respite services to 8,400 seniors and payments to carers
  • $272.5 million over four years to help seniors understand and navigate the aged care system and connect to services through new dedicated face-to-face services
  • $28.5 million in 2021-22 for the operation of My Aged Care
  • $18.4 million over four years from 2021-22 to enhance the oversight and transparency of the delivery of home care packages
  • $10.8 million in 2021-22 to design and plan a new home care program to better meet needs.

Residential aged care quality and safety

The budget includes $942 million over four years from 2021-22 for safety, quality and availability of residential aged care services including $200.1 million to introduce a new star rating system on the My Aged Care website informed by provider reporting to help people make comparisons on provider quality, safety and performance.

There’s also $365.7 million to improve residents’ access to health services, transition between health and aged care settings management of medications and digital and face-to-face assistants to make it easier to navigate the aged care system.

In this area there’s also:

  • $301.3 million for the Aged Care Quality and Safety Commission to ensure the quality of aged care services, address failures and manage and prevent COVID-19 outbreaks
  • $67.5 million for the Dementia Behaviour Management Advisory Service and the Severe Behaviour Response Teams to reduce reliance on chemical and physical restraints
  • $7.3 million for additional resources to build capacity for dementia care
  • $5.5 million toward developing a new aged care accommodation framework from a July 2024 and new design standards addressing accessibility, dementia-friendly design, smaller group home models and reablement.

Governance and regional access

The budget provides $698.3 million over five years to improve safety and quality and the availability of aged care services including $26.7 million over four years to develop a new aged care Act to replace both the Aged Care Act 1997 and the Aged Care Quality and Safety Commission Act 2018 by mid-2023.

However, most of this funding – $630.2 million – is to improve access to quality aged care services for for consumers in regional, rural and remote areas and those from Indigenous backgrounds and special needs groups.

There’s also $21.1 million over four years from 1 July 2021 to establish new governance and advisory structures including the National Aged Care Advisory Council to provide advice on the aged care sector and implementation of the reforms.

This measure also includes setting up a Council of Elders to provide advice to Government on quality and safety in the aged care sector and work towards establishing a new Inspector-General of Aged Care.

There is also:

  • $13.4 million in 2021-22 to establish regional offices in eight of the 31 Primary Health Networks as a first phase of a nation-wide rollout to improve advice to Government on issues impacting the delivery of aged care in regional and rural areas
  • $6.8 million over three years from 2021-22 for inform and engage aged care stakeholders about aged care reforms.


The budget includes $652.1 million to boost the aged care workforce including $216.7 million over three years from 2021-22 to grow and upskill the workforce.

This measure funds nursing scholarships and places in the Aged Care Transition to Practice Program provide dementia and palliative care training for aged care workers, recruit aged care workers in regional, rural and remote areas and provide eligible registered nurses with additional financial support of $3,700 for full-time workers and $2,700 for part-time workers.

Workforce measures also include:

  • $228.2 million to establish a single aged care assessment workforce for residential care from October 2022 and for home care from July 2023
  • $105.6 million to introduce nationally consistent worker screening, register and code-of-conduct for all care sector workers including aged care workers
  • $91.8 million over two years from 2021-22 to support training of 13,000 new home care workers
  • $9.8 million over two years from 2021-22 to extend the national recruitment campaign
  • funding to upskill the existing workforce and provide training for thousands of new aged care workers, including 33,800 subsidised Vocational Education and Training places through JobTrainer.

Reforms rely on stakeholder support, says govt

Greg Hunt

The reforms focus on ensuring senior Australians have access to high quality and safe care services, are empowered to have more control and choice in their care arrangements and are treated with dignity and respect, health ministers said in a joint statement on Tuesday evening.

The government will lead the aged care reform agenda, said the ministers including Minister for Health and Aged Care Greg Hunt and Minister for Senior Australians and Aged Care Services Richard Colbeck.

Reforms “will also rely on support from the aged care sector, providers and the workforce to embrace and embed these changes, creating a better system within their business and their work,” the ministers said.

Access the budget papers

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Tags: aged-care-funding, basic-daily-fee, budget-2021, featured, greg-hunt, home-care-packages, josh-frydenberg, richard-colbeck, scott-morrison,

7 thoughts on “$18b aged care budget outlines new care model

  1. This is a great start – however, in a skills shortage area why are aged care facilities still so resistant to taking students for compulsory vocational palcement as part of their Cert 3 Individual Support studies. Maybe Govt could also address this issue or a skills shortage will never be rectified.

  2. The failure of Government to agree to Royal Commission recommendation 110 , ie indexation of aged care funding tied to increases in Nurses and Aged Care Awards from 1/7/2021 does not inspire confidence there is a genuine attempt to improve viability in the sector, particularly given past performance of 11% underfunding of ACFI Vs Award rate increases 2014-2019. Furthermore the $10 supplement only applies from 1/7/2021 until 1/10/2022 when the An-Acc is implemented, and I would suggest the An-Acc will be more about the heavy hand of restricting funding rather than a casemix funding tool.

  3. Unless there are mandated Care Staff ratios in Aged Care to deliver the standard of care our aged deserve nothing will change

  4. We desperately need more Care Staff, the staffing ratios are poor, this is the first point of care, needed to be monitored by the government urgently.

  5. On reading the above Facilities will need 1 RN per 12 residents if they are to give each resident 40mins RN time a day. Each facility will be funded for 16hrs RN time – (2x8hr shifts ) so only funded for 24 clients. Where does the funding come from for the additional RN time for additional clients.

  6. The quality of assistance in home care packages (level 3 I should receive) must be addressed asap. Useless, untrained or lazy staff arriving to a new client ‘s home with no Buddy system is not at all helpful, but exhausting, when different new people are constantly sent.

  7. Having worked in the Community Aged Care Area for over 20 years I note that the work force issues are getting worse and worse. Since all the issues with COVID including the loss of many visa holders the system is at breaking point. I cannot see how all the new funding is going to help if there is no one to do the work.

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