Total Government Expenditure on Aged Care Services

IBISWorld forecasts government expenditure on aged care services to increase 23.0% during 2023-24, to reach $34.8 billion. The proportion of the population aged 70 and over continues to grow as the baby boomer generation enters retirement. Furthermore, the Royal Commission into Aged Care Quality and Safety has established widespread issues within the aged care sector as part of its interim report. In response, the Federal Government has allocated significant additional expenditure over the past few years to address the issues raised by the commission. The 2023-24 budget includes initiatives like investing in a new regulatory and prudential framework which will be reflected in a new Aged Care Act, as well as providing more than 250,000 aged care workers with a substantial pay increase of 15%. To meet the growing preference for older people to live in their own homes, an additional 9,500 home care packages will be made available in 2023-24. This additional funding has supported growth in expenditure in the current year.

Public expenditure on aged care is predominantly funded by the Federal Government under the Commonwealth Home Support Programme (CHSP). Funding, administration and policy for aged care services were previously the responsibility of the states and territories under their respective Home and Community Care (HACC) schemes. Most states and territories transferred responsibility for HACC services to the Federal Government under the CHSP from 1 July 2012. The two exceptions were Victoria, which transitioned to the CHSP on 1 July 2016 and Western Australia, which transitioned on 1 July 2018. However, states continue to contribute funding for younger people who need to access aged care services.