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Aged care initiatives

The total federal government funding for aged care is increased by $2.2 billion to $23.9 billion in 2020-21. 


  • The bulk of this year’s budget allocation is a $1.6 billion allocation for an additional 23,000 Home Care Packages. This is aligned with the government’s broader policy to support Australians to live in their own home for longer. 
  • There is an additional allocation of $11.3 million in funding for aged care providers for training and support of their workers and carers who care for people with dementia.
  • The government has announced a target of no people under the age of 65 years will be living within residential aged care homes by 2025. To support this, the budget allocates $10.6 million to help connect young people with disabilities currently living in aged care homes with age appropriate accommodation. 
  • A Serious Incident Response Scheme, with funding of $29.8 million, has been announced with the objective of better managing the response and management of reported serious incidents and hence better protecting people in residential aged care from abuse. 
  • The government is already reforming the system for how aged care is funded and has allocated a further $91.6 million in this budget to fund the second stage of implementation of this new Australian National Aged Care Classification system.
  • The government has topped up funding by $35.6 million as capacity to provide grants to eligible residential aged care operators which are experiencing financial difficulty.
  • The Budget also includes previously announced measures in support of the aged care industry and people relying on it in response to challenges resulting from COVID-19, such as the aged care workforce retention bonus payment, support for providers implementing single site workforce arrangements in hotspots, and funding for surge workforce and emergency training. 



Federal Budget

Mercer’s Perspective


As with last year’s Budget, we are concerned that the fiscal allocation and policy implications don’t go far enough. The Australian aged care industry and the challenges older Australians, and their families, are living with are significant and require major systemic reform. The Treasurer opened his commentary on aged care funding within this budget highlighting that the government is waiting until the final report of the existing Royal Commission into Aged Care Quality and Safety, which is due to be submitted in February 2021. This is now over three years Australians have known major system, policy and funding changes are required for the aged care industry, however must wait for the recommendations and decisions linked to the Aged Care Royal Commission. 


The additional 23,000 Home Care Packages is commendable in light of it being the largest single increase in additional package from the federal government in recent years. However, it is against the backdrop of over 75,000 or more Australians, who have already been assessed as eligible for a certain level of Home Care Package. This boost by the government in this year’s Budget is a precursor to the likelihood of significantly large policy and funding reforms in the future.



Implications for employers 

  • There is incremental support for employers within the aged care industry within this budget. Much of this additional funding has already been announced in response to the impact of COVID-19 and the sad health situation for residents in residential aged care homes.

  • There is an absence in support for employers supporting their workforce who have had to take on additional carer responsibilities during COVID-19, particularly for elderly parents. 


Implications for individuals

  • More Home Care Packages are being made available which will bring relief and much needed care support for 23,000 Australians, and indirectly their family carers.
  • Young Australians who have disability which requires specific care support and living arrangements are receiving much needed support for age appropriate living arrangements, rather than being comingled into residential aged care homes. This is in response to a clear recommendation by the Aged Care Royal Commission in its Interim Report entitled “Neglect” released on 31 October 2019. 







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