Health Minister Mark Butler has announced a $3 billion investment in aged care as part of the 2026/27 federal budget. The move is aimed at delivering more aged care beds, more home care packages and improved services for older Australians.

The move comes amid growing concerns that the sector lacks the resources needed to meet demand from the country’s rapidly aging population.

Estimates are that Australia would need an extra 10,000 aged care beds per year to keep up with current demands.

With pressure continuing to build on the system, the funding is being positioned as a key step towards addressing these challenges.

So, what impact will the extra funding have?

What impact will the extra funding have?

The government says the funding will be used to support the construction of an extra 5,000 aged care beds. Of particular focus will be delivering more aged care beds for supported residents.

This will include targeted capital subsidies for residential aged care. This will provide support for newly constructed or refurbished homes.

There will also be an increase to the accommodation supplement and additional payments. This will apply to homes with more than 60 per cent supported residents.

In addition, there will be $200 million invested to deliver 20 additional Special Dementia Care Units to expand the Hospital to Aged Care Dementia Support Programs.

$1 billion in funding has also been allocated for the reclassification of showering, dressing and continence services as essential services. This means aged care residents won’t be required to make co-payments for these services.

To help fund these changes, the government confirmed it would scale back the private health insurance rebate for older Australians. Some of that funding will be redirected into aged care.

What has been the reaction?

Aged care providers have welcomed the decision to introduce targeted capital subsidies and increase to the accommodation supplement.

Alex Lynch is the Director of Aged Care at Catholic Healthcare Australia. He said this additional support is vital for aged care homes caring for vulnerable residents.

“Providers caring for higher numbers of supported residents face significantly greater financial and operational pressures, driven by higher care costs and lower accommodation revenue,” he said.

The Australian Nursing & Midwifery Federation welcomed the announcements. Federal Secretary Annie Butler said it shows the government acknowledges the pressures the aged care system is under.

“While we’ve seen some significant reforms in aged care since the Royal Commission, our members continue to tell us that the system is still not fixed,” Ms Butler said.

“The Budget funding package is an important acknowledgment from the Government that the aged care is struggling under ever-increasing demand for services – and we welcome its commitment to structural improvements to the system, especially the changes to funding for in-home personal care services.”

As the government looks to expand capacity and improve care, the changes also highlight the growing demand for skilled workers across the aged care sector. From residential facilities to in-home support, increased investment is likely to create more opportunities for those looking to enter the industry or take the next step in their career. Ensuring your application reflects the needs of a changing sector can help you stand out.

Are you looking for a new career? Aged Care Resumes can help. We are pleased to offer various services including our resume writing service and selection criteria writing service.

Article References

Australian Nursing & Midwifery Foundation (23 April 2026) ‘ANMF welcomes Albanese Government’s $3 Billion funding for aged care’, Australian Nursing & Midwifery Foundation, accessed 24 April 2026.

Lloyd-Jones, K (22 April 2026) ‘Butler announces extra $3b for aged care’, Australian Aging Agenda, accessed 24 April 2026.