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Federal budget 2021: an aged care response

"Australia is coming back," beamed treasurer Josh Frydenberg as he began his budget speech.

"In the face of a once‑in‑a‑century pandemic, the Australian spirit has shone through. Doctors and nurses on the front line. Teachers and students in the virtual classroom. Businesses, big and small, keeping the economy moving.

"‘Team Australia’ at its best. A nation to be proud of," he said.

But for the aged care sector, the budget was the long awaited response to a three year process of horror, anger and reflection.

What's in it?

The big number is $17.7 billion for "practical and targeted new funding to significantly improve the system".

This includes $7.8 billion to improve the quality, safety and sustainability of residential aged care services – building, the government says, on funding responses to the Royal Commission, which provided $189.9 million for residential care.

A standout item is that the budget will increase the residential care funding base through a new government-funded Basic Daily Fee supplement increase of $10 per resident per day, as well as interim funding to continue support for residential care facilities from 1 July 2021.

An additional $74.8 million will assist providers to deliver high-quality, individualised care for people living with dementia, including through enhanced training and specialist advisory services.

In 2021‑22, spending on aged care is forecasted to be $25.9 billion, up from $13.3 billion in 2012–13.

Home care

The Government is putting up $6.5 billion for an extra 80,000 Home Care Packages, taking the total number of HCPs in Australia to 275,000, the treasurer said in his speech.

This, they say, is on top of 160,000 additional Home Care Packages, worth $12 billion, committed since the 2018–19 Budget, but it will still leave around 20,000 people waiting for packages.

"The Government will progress work on the design of a new home care program as a priority," the budget says.

Transparency and governance 

The budget also set out the government's response to the issue of how aged care will be priced and governed going forward.

Importantly, a new Aged Care Act will be put in place and "the new Act will ensure consumers are at the centre of the aged care system," the budget reads.

The budget allows $21.1 million to establish new arrangements to provide greater independent oversight of the aged care system, and a new independent pricing authority to support implementation and administration of the new funding model in residential aged care will be established.

Another $301.3 million will be provided to address failures in care and increase the capability and capacity of the independent Aged Care Quality and Safety Commission, which is responsible for regulating the sector.

From 1 October 2023 residential aged care providers will be forced to deliver an average of 200 care minutes per resident per day. 

Providers will also have to report and publish care staffing minutes for each facility on the MyAgedCare website and will also be required to report to residents and their families on care delivered. This comes into force on 1 July 2022.

And from 1 July 2024, funding will be made available to increase choice for senior Australians receiving residential care with care packages assigned to consumers, not providers. The government says this will improve transparency, giving older Australians more choice, and encouraging providers to deliver better quality facilities and care.

Better access to quality care

A new star rating system will be introduced to better help families and older australians choose which provider is best for them.

The budget provides $200.1 million for the new system as well as the expansion of the Serious Incident Response Scheme to cover home care recipients.

The government is providing $630.2 million to help Aboriginal and Torres Strait Islander people and special needs groups, as well as people living in regional, rural and remote communities access aged care services.

The need for better access to primary health care for older Aussies has also been acknowledged by the government. $365.7 million has been set aside for improved access to General Practitioners and better coordination of health services.

Unpaid and family carers

The government will also be providing $798.3 million for unpaid and family carers. The money will go toward helping families get access to support they need and offer more targeted support for carers looking after people with dementia.


The budget states that an additional 33,800 training places will be provided through JobTrainer which will help deliver some of the 80,000 new HCPs. While $216.7 million is being provided for additional training and financial support to encourage registered nurses to choose a career in aged care.

"We will provide retention bonuses to keep more nurses in aged care," said Frydenberg.

"This package brings our record investment in aged care to over $119 billion over the next four years," Frydenberg said.

"We are committed to restoring trust in the system and allowing Australians to age with dignity and respect."

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