Federal Budget 2017: What it Means for Aged Care

The Australian federal budget for 2017-18, the third delivered by the incumbent coalition government was revealed to the public by Treasurer Scott Morrison at Parliament House Canberra on May 9th.

Amidst the heated political discussions this annual event inevitably generates and accusations the government is attempting to improve its polling numbers by emulating some of Labor’s more popular social policies, the overall result for the aged care sector was positive. Following a controversial $1.2 billion cut to the Aged Care Funding Instrument in the 2016-17 federal budget, peak sector bodies warmly welcomed the lack of any great changes to funding in this year’s statement, with one summing up the mood as “no news is good news”. So what exactly did the treasurer announce in federal budget 2017 that directly impacts the aged care sector? Our experts at Japara have pored over the figures to deliver you this bite-sized summary:




Perhaps the most important development for the aged care sector from the 2017 federal budget concerned what wasn’t announced on budget night more than what the document actually contains. Namely the fact there will be no reductions in funding for the sector, which sits under the expansive Department of Human Services portfolio. This news was particularly welcomed considering the Aged Care Funding Instrument was cut by $1.2 billion in the previous budget, despite Australia’s ageing population dynamic. Leading Age Services Australia CEO Sean Rooney said this year’s budget provides “near term funding stability” for the sector which should lead to an overall rise in confidence amongst all stakeholders.




Not only were spending cuts to the sensitive health portfolio avoided by the government this year, there was actually funding increases in a variety of targeted areas, designed to help the aged care sector better meet the challenges of an ageing population – driven largely by the baby boomer cohort entering retirement and nursing home facilities. On this front, $1.9 million has been allocated over two years to establish a taskforce which will develop an Aged Care Workforce Strategy, to fill the large forecasted shortages of registered aged care nurses and carers across the labour market.




Another popular announcement on budget night was the provision of $8.3 million over 3 years to 2020 for Primary Health Networks to better coordinate palliative care for the elderly at the end of their life. Palliative Care Australia chief Liz Callaghan welcomed this funding boost as helping primary health networks “bridge” the “data gap in the palliative care sector”, which will ultimately lead to a more comfortable experience for the elderly.




On the backs of these welcome boosts to the aged care workforce strategy and palliative care, the federal government will spend an extra $67.3 million over the following year to build an entirely new payment system for Australia’s health and aged care sectors – to be administered via Medicare. Procurement for this new ICT platform is expected to commence mid this year and once completed will enable “(aged care) consumers and families to have direct control over their home care packages” according to COTA chief Ian Yates.




The biggest single initiative (in terms of spending) affecting the sector is an additional $68.7 million funding to accelerate development of the sophisticated My Health Record system. This is on top of the $374.2 million the commonwealth has already allocated to build the system from scratch, which once complete will operate on an opt-out basis. As of 7th May 2017, 173 aged care providers are already registered, alongside 4,803,022 individuals, representing approximately 20% of the total national population.




Last but not least, the budget announced important changes to eligibility measures surrounding the aged pension. In particular, seniors will be able to divert the proceeds from the sale of their house into their superannuation or bank account at the lower concessional tax rate of 15%, up to $600,000 for couples and $300,000 for individuals. With extra money in their pockets from this big transaction, seniors will be able to spend this on downsized retirement living or aged care accommodation.


For more information on Japara, our quality aged care facilities or the aged care sector in general, please visit us at japara.com.au. Alternatively, call us today on (03) 9649 2100 to have a chat with a member of our friendly staff members.

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