he Federal Government has pledged nearly a billion dollars in new funding. The money is designed to improve the quality and accessibility of aged care across Australia. The investment comes at a critical time for the sector, which has faced mounting challenges in meeting the needs of an ageing population while dealing with ongoing workforce shortages and rising costs. With more Australians entering residential care each year, this funding aims to deliver greater certainty for both providers and families.
What does the funding include?
From 1 October 2025, the daily allowance to support each resident paid to providers of aged care will rise to $295.64 from $282.44. The increase is to fund greater staff wages and rising living expenses.
Additionally, from 20 September 2025, the hotelling supplement will see a 42 per cent increase. It will increase from $15.60 to $22.15 per resident, per day.
This financial injection includes a 42 per cent increase in the hotelling supplement. It is designed to empower providers to improve daily essentials such as food, cleaning, and laundry, ensuring residents receive safe, high-quality care.
The government has also extended its AN-AC funding for another year to provide support to small rural aged care facilities that are facing higher workforce shortages. These regional services often struggle the most to recruit and retain staff. This funding is designed to ensure all Australians have equal access to aged care services, regardless of their geographical location. It is also designed to help secure the long-term viability of smaller providers.
What has been the reaction?
Aged care experts have welcomed the additional funding. However, they warn that the added funds will still not cover the full cost of meals, cleaning and other in-room services. Financial modelling by Stewart Brown estimates that these areas will still be short of funding by around $8 a day, even after the increases.
Advocates say that the funding will ensure providers are better placed to maintain staffing numbers and lift standards of living. At the same time, they argue that many aged care facilities maintain significant financial challenges. Many are operating on a break-even basis or relying heavily on reserves. For some smaller providers, particularly in regional areas, the added support may provide temporary relief but not long-term sustainability. Sector leaders stress that continued reform and investment will be necessary. This is to keep pace with community expectations and changing regulatory standards.
What does this mean for the workforce?
The funding boost has been broadly welcomed. However, ongoing financial challenges highlight the growing demand for skilled professionals in aged care. With providers under pressure to maintain quality standards and staffing levels, opportunities are increasing for those seeking a rewarding career in aged care. Jobs in nursing, personal care, allied health, and support services are all expected to expand as the sector works to meet both resident needs and regulatory requirements. For job seekers, this represents a chance to enter a secure industry that plays a vital role in the wellbeing of older Australians.
Thinking about a career in aged care?
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Article References
Aged Care Guide (16 September 2025) ‘Aged care funding boost to bring enhanced services, but concerns remain’, Aged Care Guide, accessed 19 September 2025.
Schultz, S (18 September 2025) ‘Australian aged care sees $951m govt investment surge’, Aged Care Insite, accessed 19 September 2025.