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What was in the Budget for aged care?

‘Care, dignity and respect’ was the title of the Aged Care Royal Commission’s final report. This report threw out a big challenge to the Government to fix the current problems in aged care and build a future system that puts the needs of older Australians first.

The Government responded in this year’s Federal Budget with a five-year plan, covering all aspects of aged care across both home care and residential care. This included an additional $17.7 billion spend, bringing the total spent by Government on aged care over the next four years to $119 billion.

The good news for consumers is that no changes were made to increase how much you pay for aged care, at least not yet. This article provides a quick summary of the key proposals that were announced.

Simplifying home care

We currently have two home care systems (Commonwealth Home Support Program and Home Care Packages), with separate assessment pathways. This makes access and selection of the right option confusing. The two programs will be combined into one in-home care system from July 2023 to simplify the system and match needs more effectively.

More home care packages

With around 88,000 people waiting in the queue for a Home Care Package, the wait time can be long. This wait will hopefully be reduced with an additional 80,000 packages to be released over the next two years.

More care workers

One of the greatest challenges to providing sufficient and safe aged care, is having enough skilled workers. A number of measures, including staff bonuses, scholarships and increased training programs, were announced to attract more workers and increase the skill levels. A greater focus will also be placed on upskilling staff to support people living with dementia.

The Government plans to establish a national register to help care providers who are employing staff to identify and employ appropriate staff.

Increase residential care funding

While consumer contributions will not change, the Government plans to pay residential care providers an additional $10 per day per resident to help improve the quality of living services and meet operating costs. One focus will be on improved nutrition.

A new funding model will also be introduced from later this year to better match the subsidies received with the cost of providing care.

Personal care times

Receiving adequate staff time and attention is key to a good experience for a person living in residential care.

Providers will need to provide a monthly care statement to residents and families from July 2022, to give greater transparency on how that person is being cared for. From October 2023, residents will be able to expect (on average) a minimum of 200 minutes of personal care time per day. This includes 40 minutes with a Registered Nurse.


Aged care star ratings will be introduced into MyAgedCare to help people assess and evaluate aged care providers across areas such as care time, food and nutrition standards and accommodation. This will help to compare aged care providers and should drive better standards of care.

Governance and regulation

At the centre of the reforms is the development of a new Aged Care Act. The current legislation was criticised by the Royal Commission for focussing too much on the rules for funding aged care, and not enough on the experience of the person accessing care. The new Act will focus more on the rights and needs of older people and quality standards for care.

To help government regulate and monitor the aged care system, new advisory councils and regulators will be set up, including a Council of Elders to give older people a direct voice to government.

Refer to the infographic for a quick summary of the reforms.

Talk to us

While many of us still might not want to access care, when the need arises, hopefully the reforms create a system that meets our needs in a timely fashion and treats us with dignity and respect.

The Australian aged care system is complex now and is likely to remain complex. This can make it difficult and confusing to navigate. But we are here to help. As Accredited Aged Care Professionals, we have the expertise to help you understand aged care and make informed decisions, with advice on appropriate financial restructuring. Call us on 03 5330 3988 to discuss aged care for you or a family member.

IMPORTANT INFORMATION: This article has been prepared by Withani Retirement Solutions Pty Ltd, ABN 78 112 589 976 in its capacity as a Corporate Authorised Representative of Nextplan Financial Pty Ltd, AFSL 452996, registered tax (financial) advisers (24813566) based on our understanding of the relevant legislation at the time of writing. While every care has been taken, Withani Retirement Solutions Pty Ltd and Nextplan Financial Pty Ltd makes no representations as to the accuracy or completeness of the contents. The information is of a general nature only and has been prepared without consideration of your individual objectives, financial situation or needs. Before making any decisions, you should consider the appropriateness for your personal investment objectives, financial situation or individual needs. We recommend you see a financial adviser, registered tax agent or legal adviser before making any decisions based on this information. Current at May 2021.