The Federal Budget 2026–27 includes significant new funding and reforms aimed at improving aged care services, increasing residential aged care capacity and making home care more affordable for older Australians.
The Budget focuses on:
- Increasing aged care bed availability
- Improving access to home care services
- Expanding dementia support programs
- Strengthening aged care quality and regulation
These measures are designed to support Australia’s ageing population while improving access, affordability and quality of care.
Increased Funding for Residential Aged Care
From 1 July 2026
The Government announced additional funding to increase the number of residential aged care beds by 5,000 each year.
The funding is aimed particularly at improving access for Australians with limited financial means.
Supporting Equity of Access
The Budget measures include:
- Building subsidies for aged care providers
- Increased and restructured Accommodation Supplement payments
- Measures to protect access for supported residents
The reforms are intended to encourage additional aged care facility construction while helping ensure financially disadvantaged Australians can continue accessing residential care.
Dementia Care Support Expansion
Additional funding will also be directed towards dementia care services.
This includes expanding the Hospital to Aged Care Dementia Support Program to assist older Australians with complex dementia care needs.
With dementia cases expected to increase significantly over coming decades, additional support services are likely to become increasingly important for families and care providers.
Improving Access to Home Care
From 1 July 2026
The Government also announced measures designed to improve affordability and accessibility of home care support services.
The reforms aim to help older Australians remain living independently at home for longer.
Fully Funded Personal Care Services
Under the proposed changes, personal care services will be fully funded under the Support at Home program.
Examples of fully funded personal care services include:
- Showering assistance
- Dressing support
- Incontinence aids
- Other daily personal care needs
These services will be funded in a similar way to clinical care services.
Faster Access to Home Care Support
The Budget also includes measures to:
- Improve access times for Support at Home places
- Streamline aged care assessments
- Improve hardship application processes
- Enhance end-of-life care pathways
These reforms are intended to reduce waiting times and simplify access to care services for older Australians and their families.
Previous Support at Home Changes Confirmed
The Budget commentary also confirmed a previously announced change scheduled to commence from 1 October 2026.
Under those reforms:
- Personal care services will move from the “independence” category to the “clinical supports” category within the Support at Home system.
This change is expected to reduce out-of-pocket costs for many aged care recipients receiving personal support services at home.
Better Care for Older Australians
From 1 July 2026
Additional funding will also be provided to strengthen:
- Aged care regulation
- Governance standards
- Service quality frameworks
- Workforce support programs
- Sector sustainability initiatives
The Government stated the funding is intended to improve overall standards of care and strengthen long-term viability across the aged care sector.
What These Changes May Mean for Older Australians
The aged care reforms may provide several benefits for older Australians and their families, including:
- Improved access to residential aged care beds
- Reduced waiting times for home care support
- Lower personal care costs at home
- Enhanced dementia support services
- Improved quality and oversight of aged care providers
The measures may also provide additional support for financially disadvantaged Australians requiring residential aged care services.
Key Takeaways
The Federal Budget 2026–27 delivers substantial investment into Australia’s aged care system, with a strong focus on affordability, accessibility and care quality.
Key aged care measures include:
- Funding for 5,000 additional aged care beds annually
- Expanded dementia care support programs
- Fully funded personal care services under Support at Home
- Faster access to home care services
- Additional funding for aged care regulation and workforce support
As Australia’s population continues to age, these reforms aim to improve care outcomes while supporting older Australians to remain independent and receive appropriate care support.
As with all Budget measures, legislation and implementation details may still evolve over time.
Individuals and families considering aged care options may benefit from obtaining professional financial and aged care advice to understand how the reforms may affect their personal circumstances.
Source: Federal Budget 2026–27 FirstTech Briefing Paper.
Visit our Contact Us page to make time to discuss.
Disclaimer and Warning
The information above is of a general nature only. It should not be used as a source to make financial decisions. It’s also important to note that the legislation and figures related to this topic tend to change regularly and therefore the information above may not reflect the current status. We recommend that if you are looking for advice on this matter, you should contact us.