The 2026-27 Federal Budget: What It Means for Aged Care and Your Family
- Bill Savellis
- May 15
- 3 min read
Right now, more than 3,000 older Australians are waiting in hospital - because there is nowhere for them to go. No aged care bed available. No package in place.
It is one of the most sobering indicators of a system under acute pressure. And this month, the Federal Government responded with its 2026-27 Federal Budget - committing $3.7 billion in new funding for the aged care sector.
Here is what was announced, where the gaps remain, and what families need to think about right now.
What the Budget Includes
The $3.7 billion commitment is spread across five key areas:
Measure | Funding |
|---|---|
New residential beds & Dementia Care units | $606.5 million |
Accommodation Supplement reform (provisioned) | $1.1 billion |
Personal care fully subsidised (showering, dressing, continence) | $1.0 billion |
Support at Home packages & end-of-life pathway | $389.8 million |
Sector quality, safety & viability | $565.1 million |
TOTAL | $3.7 billion |
New residential beds and Dementia Care
The $606.5 million allocation covers capital subsidies for providers who build or expand aged care accommodation, the delivery of up to 20 additional Specialist Dementia Care units, and the expansion of the Hospital to Aged Care Dementia Support program from 11 to 20 locations nationally. A further $1.1 billion has been provisioned for a future restructure of the Accommodation Supplement, including an additional payment for facilities where more than 60 per cent of residents are low-means.
Personal care fully subsidised
The Government has committed $1 billion to remove co-contributions for personal care services - including showering, dressing, and continence support - through the Support at Home program. For families managing care costs, this is a meaningful change. These services were previously subject to fees that could add up significantly over time.
Support at Home packages
An additional $389.8 million has been allocated to bring forward the release of Support at Home packages, extend the end-of-life care pathway, and make the program fairer and more affordable - including a review of the Integrated Assessment Tool and digitisation of the financial hardship assistance process.
Where the Gaps Remain
While industry bodies welcomed many of these measures, important concerns have been raised.
Ageing Australia - the peak body representing aged care providers - has acknowledged that the $389.8 million allocation addresses many of the changes the sector has been advocating for, but has expressed concern that the funding falls short of what is needed to meaningfully address current wait times.
Notably absent from the Budget was any new funding for the Commonwealth Home Support Program - the entry-level home care program accessed by many older Australians before they transition to higher-level support.
The Hospital Discharge Crisis
The number of hospital patients ready for discharge but unable to move to aged care has grown - and the trend is worsening. The Federal Health Minister has described the scale of the shortfall as the equivalent of opening a new aged care home every three days for the next 20 years.
The table below shows the estimated number of patients waiting for aged care placement at the time of the Budget, compared to October 2025.
State / Territory | Oct 2025 | May 2026 |
|---|---|---|
Queensland | 837 | 1,072 |
New South Wales | 878 | 829 |
Victoria | 246 | 246 |
South Australia | 348 | 370 |
Western Australia | 315 | 300 |
Tasmania | 84 | 94 |
Australian Capital Territory | 70 | 63 |
Northern Territory | 80 | 52 |
TOTAL | 2,858 | 3,026 |
What This Means for Your Family
The Budget announcement represents genuine progress, but the supply of aged care beds and packages will not catch up overnight.
Here is the practical reality:
Beds will remain difficult to find, particularly for low-means residents or those with specialist dementia needs.
Assessment wait times will continue - delays are occurring not just in finding a bed, but in accessing an aged care needs assessment in the first place.
Planning ahead is critical. The families who navigate this system with the least stress are those who begin conversations - and the assessment process - before a crisis forces the decision.
Understanding your financial position matters. How the accommodation supplement, means testing, and Support at Home changes interact with your assets and income can significantly affect your family's costs and entitlements.
If you or a family member are beginning to think about aged care - even as an early, exploratory conversation - now is the right time to understand your options. Waiting until a medical event forces the decision limits the choices available.
