The Budget builds on the Government's first-term aged care reforms, which codified the rights of older Australians in law, increased minimum minutes of care delivered per resident per day, lifted aged care worker wages by 15 per cent, and strengthened regulatory oversight in response to the Royal Commission into Aged Care Quality and Safety. The 2026-27 package focuses on closing the gap between aged care supply and demand, removing financial barriers to personal care, and stabilising sector quality and viability.

Residential Aged Care Beds

$1.7 billion is allocated to incentivise the construction of up to 5,000 aged care beds per year. The investment includes:

• $606.5 million in new capital subsidies for aged care providers building or expanding residential accommodation.

• Up to 20 additional Specialist Dementia Care units.

• Expansion of the Hospital to Aged Care Dementia Support program from 11 to 20 locations nationally.

• $1.1 billion provisioned for future spending to increase and restructure the Accommodation Supplement, including an additional payment for facilities where more than 60 per cent of residents are low-means.

The capital subsidy approach is designed to address declining new bed approvals in recent years. Industry analysts have noted that aged care construction has lagged demographic demand, contributing to longer waitlists for residential places.

Support at Home Packages

$389.8 million is allocated to accelerate the release of Support at Home packages and to make the program fairer and more affordable. The investment includes improvements to assessments, hardship applications, and the end-of-life care pathway.

Support at Home replaces the Home Care Packages program and is intended to provide more flexible, individualised support to older Australians living in their own homes. Demand for in-home care has consistently outpaced supply, with waitlists for Home Care Packages averaging several months under the previous program. A separate $1.4 billion is provisioned over the forwards to support the transition between the two programs.

Fully Subsidised Personal Care

$1 billion is committed to fully subsidise and remove co-contributions for personal care services through the Support at Home program. Personal care covers tasks such as showering, dressing, and toileting. Removing the co-contribution means older Australians will not face out-of-pocket costs for these essential services, regardless of means.

Sector Quality, Safety and Viability

A further $565.1 million is allocated to improve sector quality, safety and viability. This builds on first-term measures including the increase in minimum care minutes, the 15 per cent wage increase for aged care workers, and strengthened oversight by the Aged Care Quality and Safety Commission.

Equity of Access

Several components of the package are framed as protecting access for older Australians who are less well off. The restructured Accommodation Supplement provides a higher payment for facilities where more than 60 per cent of residents are low-means, recognising that these providers operate on tighter margins and have been more likely to close or scale back in recent years. Removing the co-contribution on personal care benefits older Australians on lower incomes most directly.

Key Figures

• $3.7 billion total aged care investment

• $1.7 billion to support up to 5,000 new aged care beds per year

• $1 billion to fully subsidise personal care through Support at Home

• $606.5 million in capital subsidies for residential aged care construction

• $1.1 billion provisioned for Accommodation Supplement increases

• $565.1 million for sector quality, safety and viability

• $389.8 million to accelerate Support at Home package releases

• $1.4 billion provisioned for the Home Care transition over the forwards

• 20 additional Specialist Dementia Care units

• Hospital to Aged Care Dementia Support expanded from 11 to 20 locations

Sources

[1] Budget 2026-27 Overview: Better care for older Australians

[2] Budget 2026-27 Overview: Strengthening care and broadening opportunity