What’s in store for aged care ahead of the 2024 Federal Budget?

The Federal Budget will be released on Tuesday evening with cost-of-living relief packages, stage 3 tax cuts and superannuation changes among the leading investments. But after two big budgets for the aged care sector, marquee budget announcements seem unlikely in 2024. 

2022 and 2023 improved aged care’s fortunes

Before we look at what could be coming for aged care, let’s reflect on what the last two years have looked like. 

With a change of Government in 2022 it was certainly a tale of two budgets. The Liberal Government first handed down a March budget that gave aged care very little. At the time it was labelled as something that would leave “dedicated workers on the edge of poverty and many older Australians without the services they need”. 

There was plenty of criticism for a Government seemingly disinterested in responding to the Royal Commission into Aged Care Quality and Safety.

But then the Labor Government was elected and in October 2022 it responded with its own budget. 

Almost $4 billion was committed to reforming the aged care sector, including:

• $2.5 billion to implement 24/7 Registered Nurse coverage and the provision of 215 care minutes per resident per day
• $43.8 million for transitioning to the new Australian National Aged Care Classification (AN-ACC) funding model
• $38 million for the introduction of an Inspector General for Aged Care, $23 million for research into home care reform and more

The investments were warmly welcomed after years of underfunding, although there was still plenty of trepidation over just how impactful they would be.

Last year’s budget was headlined by an $11.3 billion commitment to fully fund the 15% aged care pay rise. Tom Symondson, ACCPA CEO, said at the time it would help support aged care providers to meet their regulatory obligations.

Additionally, we saw:

• $310 million to continue implementing Royal Commission recommendations
• $200 million to improve aged care Star Ratings and Quality Indicators
• Extra funding for the creation of the Aged Care Taskforce, the move to a single assessment system and General Practitioner/aged care incentives

Looking ahead to the 2024 budget

After those notable investments into aged care, it would be remiss of anyone to say the sector is now perfectly funded and supported. No, more investments are certainly needed to help with the Support at Home transition, the new Aged Care Act, ongoing workforce challenges and requirements, etc. 

Anika Wells, Minister for Aged Care, was asked about what we can expect from the budget last week and her response was less than convincing. 

“You’re asking me to take my life into your hands to pre-announce ahead of the Treasurer having that privilege on Tuesday. What I would say is, you won’t be surprised to see or to hear me say that we’ve been doing a huge amount of work on aged care. Some of which is already in the public domain, and some of which will come out shortly, particularly with respect to home care,” she said.

“We are bringing in a whole new support system that will be a part of the new Aged Care Act, we’re hoping to introduce soon. An entirely new basis for the way that people will receive their care. We know that they want to receive it at home, we know that the system as it currently is set up, it’s not geared to do that, we know that people need better services, and they need to be able to stay at home much longer than they currently are able to do. We’ve been doing all of that work […].”

Major investments in the new Aged Care Act seem highly unlikely given the delayed timeline for its legislation, and the staggered phase-in of the full aged care pay rise. The lack of noise surrounding the Aged Care Taskforce’s recommendations also speaks volumes about short-term funding announcements. 

However, with eligible workers to receive a pay boost in January 2025 some level of commitment is likely. Similarly, Support at Home’s 2025 introduction could see the home care sector supported to help prepare for the transition. 

Otherwise, the focus has very much been on the broader healthcare sector which suggests the Labor Government is not yet ready for the next stage of aged care investment.