In a landmark move, the Albanese Government has unveiled a comprehensive $5.6 billion aged care reform package, marking the most significant overhaul of the sector in three decades.
This sweeping initiative aims to revolutionise care for older Australians, focusing on enhancing home care services, improving residential care quality, and strengthening legal protections for the elderly.
The centerpiece of the reforms is the new Support at Home program, slated to launch on 1 July 2025. With a $4.3 billion investment, this program aims to support approximately 1.4 million Australians to age in place by 2035. Prime Minister Anthony Albanese underscored the importance of this shift: “Older Australians built this country, shaped our economy, did the hard yards. They embody the strength and the spirit of our nation. Our government is working to ensure that the aged care system that supports them is stronger now and sustainable into the future.”
Minister for Aged Care Anika Wells elaborated on the program’s benefits: “Support at Home will help around 1.4 million older Australians do just that, with shorter wait times, more levels of support, and funding for home modifications.” The program will provide support across three key areas: clinical care, independence, and everyday living. Notably, the government will cover 100% of clinical care costs, with means-tested contributions for other services.
The reforms also address the pressing issue of residential aged care sustainability. As Treasurer Jim Chalmers explained, “This is how we Budget for better care. This is how we fund the care Australians need and deserve as they age.” The package includes measures to improve funding and viability of residential care, including larger means-tested contributions from new entrants and a higher maximum room price that is indexed over time.
Crucially, the reforms introduce robust legal protections for older Australians in care. The new Aged Care Act will establish a Statement of Rights for older Australians in aged care, introduce new duties to hold providers accountable, and empower a regulator with stronger investigative powers. A new, independent statutory Complaints Commissioner will also be established to address concerns more effectively.
The government has been careful to ensure that current aged care recipients are not disadvantaged by these changes. A ‘no worse off’ principle will be applied, guaranteeing that those already in the system won’t face increased contributions to their care.
While the reforms represent a significant upfront investment, they are designed to strengthen the budget over time. The net impact is projected to be a $930 million spend over four years, followed by a $12.6 billion save over the subsequent eleven years. By 2034-35, aged care spending as a share of GDP is expected to moderate from 1.5% to 1.4%, even as the number of participants and quality of care increase.
These reforms come in response to the recommendations of the Aged Care Taskforce and have received bipartisan support, underscoring their critical importance to Australia’s future. As Prime Minister Albanese concluded, “Reforms like this do not happen every day. They are once-in-a-generation, and my Government is proud to deliver them, as we said we would.”
Ritchelle is a Content Producer for Healthcare Channel, Australia’s premier resource of information for healthcare.
