Sustainable care for an ageing population

We are recognising the skilled work of Australia’s aged care workers and delivering the largest ever wage rise. We are also improving the aged care system to ensure the long-term sustainability for the future of aged care.

Increasing wages across the aged care sector

  • Fair Work Commission – Aged Care Work Value Case – $11.3 billion over 4 years.

The Australian Government will fund the outcome of the Fair Work Commission’s decision of a 15% increase to the award wages for many aged care workers, and will fund on-costs. Funding arrangements will be delivered through:

The Fair Work Commission interim decision to increase award wages will take effect from the start of the employee’s first full pay period on or after 30 June 2023.

This wage rise will benefit registered nurses, enrolled nurses, assistants in nursing, personal care workers, head chefs and cooks, recreational activities officers (lifestyle workers) and home care workers.

This funding must be passed to workers. We are working with the unions and providers to set clear guidance to ensure aged care workers start to receive fair wages, including through a published schedule of wages.

We will monitor how much providers spend on wages through:

Providers will also have to confirm in the QFR that they will pass on the full amount of funding for wages to workers.

Better pay will help attract more people to work in the sector. Fee-free TAFE, more university places, student clinical placements, and targeted training programs are also attracting new workers and helping to building the skills of current workers.

The wage rise reflects the intent of the Royal Commission into Aged Care Quality and Safety final report to increase award wages and improve remuneration for aged care workers.

Establishing a new Aged Care Taskforce

  • Aged Care Taskforce – $0.7 million in 2023-24.

We have established the Aged Care Taskforce to review funding arrangements for aged care, and develop options for a system that is fair and equitable for all Australians. The taskforce will build on Royal Commission into Aged Care Quality and Safety recommendations and review funding arrangements for aged care with a focus on:

  • contributions arrangements that will support a sustainable system
  • equity for older people needing aged care now and into the future, and for all Australians contributing to aged care funding through their taxes
  • making innovation the sector default
  • enhancing the elements of the system that Australians value, including putting people using aged care at the centre of the funding arrangements.

More funding for residential aged care services

  • AN-ACC price increase – $10.1 billion over 4 years, including $7.6 billion to meet the cost of the Fair Work Commission’s 15% pay rise.
  • New hotelling supplement – $116.3 million over 4 years.
  • Increase 215 care minute funding – $742.9 million over 3 years.
  • Increase 24/7 registered nurse supplement – $178.0 million over 4 years.
  • Expand AN-ACC Transition Fund – $6.0 million in 2023-24.

The Australian Government funds and regulates residential aged care providers to ensure they are well-staffed, financially viable, and deliver high quality, safe care.

We will increase residential aged care provider funding arrangements to ensure aged care workers receive the Fair Work Commission’s 15% award pay rise, including:

  • increasing the Australian National Aged Care Classification (AN-ACC) price
  • introducing a separate hotelling supplement for head chef and cook wages as well as catering, cleaning and gardening costs.

We are also providing additional grant funding to providers delivering services for isolated communities to transition to AN-ACC.

 Aged care residents will benefit from better staffing in their aged care homes, with access to:

The care minute requirements have been refined for each AN-ACC classification to ensure the right level of care is delivered to every aged care resident.

Expanding viability support programs for aged care providers

  • Viability Support Programs – $98.7 million over 2 years.

We are funding continued support for aged care providers to improve capability and better manage financial risk, including:

The Market Adjustment Program will be offered directly to aged care providers to help them to improve performance and adjust to reforms.

Older people, their families and carers will have greater confidence that aged care providers have the resilience to deliver continuous, high-quality services. This will particularly benefit First Nations elders, older people from culturally and linguistically diverse backgrounds, and rural and remote communities where specialised aged care services may be at higher financial risk.

Investing in a strong prudential regulator

  • Aged Care Prudential Reform – $12.9 million in 2023–24.

From 1 July 2023, the Aged Care Quality and Safety Commission (ACQSC) will commence enhanced functions as part of their role as the independent prudential regulator. This will address recommendations 130 to 137 of the Royal Commission into Aged Care Quality and Safety.

Additional funding will enable the ACQSC to better perform its prudential functions and to fulfil its new responsibilities, acting as a strong prudential regulator, including:

  • monitoring aged care providers for viability risks and mitigating the risk of potential insolvency when appropriate
  • developing further financial and prudential reforms under the new Aged Care Act, including undertaking consultation on changes to Financial and Prudential Standards.

A strong prudential regulator will help to better identify, prevent and respond to potential insolvency risks for aged care providers. This will help promote the sustainability of the aged care system and ensure providers have the financial stability to meet the needs of older people into the future.

Temporary changes to the residential aged care planning ratio

  • Improving Aged Care Support – savings $2.2 billion over 3 years.

The Government will temporarily reduce the residential aged care provision ratio from 78.0 places to 60.1 places per 1,000 people aged over 70 years over 3 years from 2024–25. The reduction in the ratio reflects the increasing preference of older people to remain in their homes.

The savings from this measure will offset the Government's commitments to aged care. This target ratio change does not affect how many people can come into residential care, nor does it change the funding amounts paid for individuals in care.

Date last updated:

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