Budget 2025: Focus on Aged Care Wages and Aged Care Assessments
by Lilly Sorensen, Sector Support Administrator
Tuesday’s Federal budget announcement includes key measures impacting the aged care sector and older people receiving services. These measures comprise funding commitments for aged care wage increases, additional funding for aged care assessments, and initiatives aimed at improving high quality care.
Service Delivery
$187.8 million over five years to increase funding for the Home Care Packages program (which will transition to Support at Home program on 1 July 2025)
$76.8 million over five years for additional in-home aged care services through both the Commonwealth Home Support Program and the Support at Home program
$4.2 million over five years for specialist aged care programs
$2.4 million in 2025–26 to extend the Care Together Program to support the start-up and development of cooperative and mutual enterprises, and deliver business resources and professional support to the aged, disability and veterans’ care sectors
Aged Care Wages
$2.6 billion over 5 years to fund wage increases for aged care nurses
$35.5 million over two years to fund eligible aged care providers for higher cost of historical leave entitlements associated with the Fair Work Commission decision
$30.1 million will be invested to revise the approach for funding for Commonwealth Home Support Program providers to deliver funding through an uplift in indexation for the Fair Work Commission Stage 3 decision on the Aged Care Work Value Case.
Quality
The Aged Care Quality and Safety Commission will receive $116.1 million in 2025–26 to support its regulatory functions under the Aged Care Act 2024 from 1 July 2025.
$27.7 million in 2025–26 will be raised through the introduction of cost recovery arrangements. (Registration and renewal Fees paid by provider to cover the Commission’s costs) The consultation on the proposed fees for registration and renewal is open until 1 April 2025. (here)
$37.8 million for the Aged Care Quality and Safety Commission to support staged digital implementation
Aged Care Assessments
$47.6 million over four years from 2025–26 (and an additional $12.7 million in 2029–30) to fund Aboriginal Community Controlled Organisations and service providers to deliver culturally appropriate aged care assessments for Aboriginal and Torres Strait Islander people from July 2025.
$24.4 million in 2024–25 for additional Commonwealth Home Support Program assessments to meet new requirements under the Aged Care Act 2024. Further reading on how to ensure unregistered and unassessed CHSP clients do not lose their services on 1 July 2025 here.
$53.2 million to continue implementation of Single Assessment System and support the staged digital implementation
What is missing from this year’s budget?
Care Management & Care Partners
Under Support at Home, Care management activities will be delivered by care partners. Care management needs to be properly funded at 20% of Support at Home package amount. The transition to Support at Home will bring emerging challenges which older people and care partners will need to navigate together. Quarterly budgets, overspends, underspends, new pricing, consumer contributions, invoicing, a new service list and a greater emphasis on person-centred choice and control brings a huge paradigm shift, and the onus of explaining these changes for informed decision making, and grounding this communication in a person-centred framework will largely sit with the care partner.
Preventative care such as everyday living services tend to be more price elastic, so how will client contributions affect perceived value and consumer demand? A new set of risks may arise when demand for services shift. The role of care partners to walk alongside the older person and adjust the care plan to ensure they continue to receive the right services will be more important than ever.
Operational Costs: Reform implementation and embedding high quality care
There is no indication of a budget allocation for provider’s operational costs of transitioning to Support at Home and meeting new governance reporting and Quality requirements. Providers will need to include this in their Support at Home pricing arrangements. The Guidance for setting Support at Home Prices states “prices can also reflect the costs of transitioning to Support at Home where they relate to the delivery of that service.” The document contains an example of how to calculate a unit price, and what costs can be included.
Aged Care Workforce
Aged care wage rises alone will not solve the aged care workforce shortages, and with demand for aged care only increasing it was surprising to hear no budget initiatives to address the growing workforce shortages.
Properly funding aged care delivery ensures that Support at Home can deliver on its promise of high quality, person centred and equitable aged care now and in the future.