$115 million aged care bed boost welcomed, but sector says far more needed

The Federal Government’s announcement of $115 million to support the construction of new residential aged care beds has been welcomed by sector leaders, but advocates warn it is only a small step toward addressing Australia’s rapidly growing demand for care.

Health and Aged Care Minister Mark Butler and Aged Care and Seniors Minister Sam Rae confirmed the funding will be delivered through the Aged Care Capital Assistance Program (ACAPP) to help expand capacity in regions experiencing severe shortages.

The program will target four areas identified as aged care “hotspots”: the Illawarra region and Adelaide in the first tranche, followed by the Hunter and Perth in a second round.

Providers will be invited to submit proposals through an expression of interest process to build and open new beds within two years, with the aim of relieving pressure on hospitals where older patients are often unable to be discharged due to a lack of appropriate aged care places.

Pressure building across the system

Sector representatives broadly welcomed the funding, describing it as a positive step to address immediate shortages.

Ageing Australia CEO Tom Symondson said increasing the number of available beds is essential as demand continues to grow.

“We welcome any commitment that can help us build more beds quickly or bring beds back online,” he said.

But Symondson cautioned the investment would need to be part of a much larger plan if Australia is to keep pace with demographic change.

“We have called consistently for an expansion in federal funding for new beds and while this announcement helps, it is clearly not the full solution,” he said.

“Not only do we need thousands more beds than this fund will deliver, several regions with enormous demand will miss out this time round, including Brisbane.”

Australia’s population is ageing rapidly, with projections showing the number of people aged over 85 will triple over the next 40 years.

According to Ageing Australia, the country should be building around 10,000 residential aged care beds each year to keep up with demand. In contrast, only about 400 beds were built last year.

Hospital delays highlight the problem

Advocacy groups say the shortage of residential aged care places is already having real consequences for hospitals and older Australians.

Older Persons Advocacy Network (OPAN) CEO Craig Gear said the additional funding should help ease bottlenecks where older people remain in hospital despite being medically ready to leave.

“This funding will help address the shortage of aged care beds and the high demand we’re seeing across several regions,” he said.

“It’s a positive step that will support older people to move out of hospital care sooner and into more appropriate settings.”

Extended hospital stays can have significant health impacts for older people, including cognitive decline and reduced physical functioning.

A bigger system problem

While the funding may help increase capacity in targeted areas, sector leaders say the issue extends beyond residential care.

COTA Australia CEO Patricia Sparrow said the investment highlights the need for stronger coordination across health and aged care systems.

“Anything that provides older Australians with the care and support they need is a good thing, and increasing the supply of aged care beds is an important part of that,” she said.

“But more must be done to fix the growing pressures across Australia’s health and aged care systems.”

Sparrow said many older Australians remain in hospital beds not because they require hospital treatment, but because appropriate care options are unavailable.

“Every day in hospitals across the country, older Australians remain in beds they’re medically ready to leave, not because they need hospital care, but because the supports they need simply aren’t available when they need them.”

Reform still unfolding

The announcement follows recent commitments by state governments in South Australia and Western Australia to invest in additional aged care beds to reduce hospital pressure.

However, advocates argue that increasing residential capacity must be paired with broader improvements across the care system, including stronger home care support and faster access to services.

“Our advocates are hearing from older people who are cutting back on services due to rising costs and experiencing long waits for assessments and reassessments,” Gear said.

For many in the sector, the message is simple: new beds will help, but the scale of the challenge means much larger investment will be needed in the years ahead.