About the review
We are reviewing the current funding model of the MPSP to develop a new and sustainable funding model that reflects the cost of delivering services in rural and remote locations in an integrated health and aged care service environment.
The review will explore:
- how aged care services are delivered under the MPSP, including in different local contexts with specific challenges
- if the current funding model reflects the costs of aged care service delivery under the MPSP
- subsidy features required to retain the flexibility of the MPSP
- ways to simplify subsidy components and improve transparency
- if any interim funding uplifts are required in advance of a new model
- further adjustments to consumer contribution arrangements in the MPSP
The department is also working with the Independent Health and Aged Care Pricing Authority (IHACPA) who will provide specialist pricing and costing advice for services delivered through the MPSP.
The review will also consider other work underway in aged care including:
- the National Aboriginal and Torres Strait Islander Flexible Aged Care Program (NATSIFACP) funding model review
- the review of the remoteness classification system
- the Regional, rural and remote aged care policy framework and workplan
- pricing reviews for residential care and Support at Home (e.g. annual reviews and the Accommodation pricing review)
Why it is important
The review is being conducted in response to Recommendation 55 of the Royal Commission in Aged Care Quality and Safety, and Recommendations 18 and 23 of the Aged Care Taskforce Final Report.
The MPSP delivers valued integrated health and aged care services for rural and remote communities.
Ensuring the flexibility and sustainability of the MPSP is critical to meet the changing needs of communities and delivering safe quality aged care services in rural and remote locations.
How the review will be conducted
The review will be conducted over the next 3 years through 6 overlapping stages:
A new funding model is targeted for mid-2028, subject to activities and agreed consultation timeframes. Interim adjustments to existing funding arrangements will also be considered during this period where warranted and agreed to by Government.
What we’ve done so far
The department has completed the following activities for the first stage:
- engaged with MPSP jurisdictions, providers and sites through monthly working groups and quarterly sector webinars.
- online and in-person consultations with a selection of sites across states and territories to collect baseline information about site characteristics, challenges and barriers to deliver aged care services in rural and remote locations.
IHACPA also completed interviews with providers across the country to understand what it costs to deliver services and to understand the best method to collect activity and cost data. This was completed as part of IHACPA’s consultations on the Pricing Framework for Australian Residential Aged Care Services 2026-27.
This work between the department and IHACPA will inform the next phase of the review.
Get involved
We will keep you updated with ways to become involved in future consultations.
Contact
For more information about the MPSP Funding Model Review contact the Project Team via MPSReforms@health.gov.au