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on Thursday, September 19, 2024
The government is taking significant strides toward improving Australia’s aged care sector with a $3.8 billion investment over four years, aimed at delivering better care for older Australians. Beginning on 1 January 2025, this funding will facilitate pay rises for aged care workers, benefiting an estimated 340,000 workers across both residential and home care settings.
This financial boost stems from the Fair Work Commission’s (FWC) Aged Care Work Value Case Stage 3 decision, and builds on the government’s prior investments, including a $11.3 billion commitment in 2023 to fund a 15% wage increase for aged care workers. This latest tranche of funding follows the announcement of an additional $5.6 billion by the Prime Minister, reinforcing the government’s commitment to transforming the sector.
Starting 1 January 2025, aged care workers will experience a significant pay rise, with additional increases scheduled from 1 October 2025. This move recognizes the essential work of aged care staff, who have long been underpaid relative to the demands of their roles. The wage hike is expected to improve the retention and recruitment of skilled workers in the sector, ultimately enhancing the quality of care provided to elderly Australians.
Alongside the wage increases, the Albanese Government is introducing a suite of reforms aimed at improving the quality and viability of residential aged care services. From 1 October 2024, the Australian National Aged Care Classification (AN-ACC) price will rise to $280.01 per resident per day, a 13% increase in daily funding. This adjustment will support providers in meeting rising care and operational costs, including the mandated increase to 215 care minutes per resident each day.
Since the government came to power in 2022, total care funding has surged by 58%, demonstrating a robust response to the pressing needs of the aged care sector.
A key feature of the funding reforms is the adjustment to AN-ACC fixed and variable funding categories. These changes, informed by the Independent Health and Aged Care Pricing Authority (IHACPA), aim to better align financial support with the actual costs of providing care. This will particularly benefit aged care services in regional and rural areas, where the cost of delivering care is typically higher compared to metropolitan regions.
In addition to the direct care funding, the government is also addressing the rising costs of “hotelling” services—everyday living expenses for residents in aged care. From 20 September 2024, the hotelling supplement will increase from $11.24 to $12.55 per resident per day, with a further rise to $14.44 on 1 July 2025. These increases will cover the growing costs of meals, laundry, and other essential services, ensuring that providers can maintain the quality of living for residents.
The Albanese Government’s commitment to aged care extends beyond residential settings. For those receiving care at home through the Home Care Packages (HCP) Program, $400 million over four years has been earmarked to increase the Commonwealth subsidy. This will allow home care providers to pass on wage increases to staff without affecting the hours or quality of care received by elderly Australians.
Similarly, providers under the Commonwealth Home Support Programme (CHSP) will be eligible to apply for additional grant funding, ensuring that they can meet the wage increase requirements while continuing to provide crucial services to older Australians.
The government’s latest investment comes alongside a range of historic reforms announced in response to the Aged Care Taskforce’s final report. These changes, set to commence on 1 July 2025, aim to overhaul the funding structure, improve service quality, and secure the long-term viability of the sector.
The government’s $3.8 billion investment is a pivotal step toward addressing the challenges faced by the aged care sector. By focusing on worker pay rises, funding increases, and comprehensive sector reforms, the government is ensuring that older Australians receive the care and dignity they deserve while supporting the workforce that delivers these essential services.
How can I find a residential aged care home near me?
Residential aged care homes are located throughout Australia. To begin your search, simply click on your state below and then enter in your desired suburb (or the name of the aged care provider if you already have a home in mind):
Where can I access Home Care Packages?
Home Care Packages are available Australia-wide. To begin your search for home care providers in your area, simply click on your state below:
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