Australia's aged care industry plays a critical role in supporting and providing care for its elderly population.

As the nation's population continues to age, more strain will be placed upon this vital sector.

To understand the challenges, improvements, and future direction of the aged care industry, we must first examine its current status. In this article, we delve into and analyse key aspects of Australia's aged care sector, including;

  • Funding
  • Workforce
  • Quality of care
  • Regulatory reforms
  • Technology integration

Funding Challenges

One of the significant challenges facing the aged care industry in Australia is the issue of funding. The Royal Commission into Aged Care Quality and Safety began in 2018 and concluded in March 2021. The commission found significant funding shortcomings and emphasised the need for substantial investment. The commission made it clear that the existing funding model is inadequate to meet the growing demand for aged care services.agedcare

The current funding model relies on a mix of government subsidies and individual contributions. As a result, many older Australians face lengthy waiting times for home care packages. Some faced delays of up to 12 months before receiving the necessary care and support.

In response to the commission's findings, the Australian government promised to increase funding for aged care services. In the recent 2023-2024 Federal Budget, they set aside an extra $11.3 bn to improve the pay for aged care workers and supply more home care packages.

The government aims to establish a sustainable funding model through the Australian National Aged Care Classification. This model ensures equal access to care for all older Australians. It achieves this by giving subsidies to approved aged care providers based on the type of service and each person's individual needs. These needs will be assessed by an independent assessor.

Workforce Shortages

The aged care sector is grappling with another pressing issue: a shortage of skilled care workers. The demand for aged care services is steadily rising, driven by an aging population and increased life expectancy. As this demand grows it will place significant pressure on the existing workforce.

To ensure the delivery of high-quality care, aged care providers need to attract and retain qualified staff. This includes registered nurses, personal care workers, and allied health professionals. However, this is a difficult task when wages are comparatively low, career advancement opportunities are limited, and work conditions are demanding. These factors contribute to challenges in recruiting and keeping skilled workers.aged_care_industry_report

Addressing workforce shortages in Aged Care requires three key elements;

  • Strategic planning
  • Targeted recruitment efforts
  • Ongoing professional development opportunities

Recognising this, the government has committed to improving employment prospects in the sector. In the recent Federal Budget, the government increased funding for training and education programs. They are also raising wages for care workers and developing improved career pathways. The ultimate goal is to build a strong and sustainable aged care workforce. Industry stakeholders, educational institutions and government bodies will need to work together to achieve this goal.

Quality of Care

Ensuring quality care for older Australians is crucial. The Royal Commission’s findings revealed that the quality and safety of care provided to older Australians needs to improve. While many aged care facilities and service providers offer excellent care, instances of neglect and mistreatment revealed in the commission indicate the need for improvement. 

The commission made several recommendations to improve the quality of care, including:

  • Increased staffing ratios
  • Improved training and education
  • Enhanced regulatory oversight
  • Increased transparency

The government has accepted most of these recommendations and has begun implementing reforms. These will address the systemic issues identified by the commission. 

One key area of focus is improving the regulation and quality standards in the aged care industry. To achieve this, the government plans to introduce a new aged care act to replace the existing Aged Care Act 1997. This new legislation aims to:

  • Strengthen the rights of older Australians
  • Enhance transparency and accountability
  • Establish clearer quality standards

The Department of Health have set out the responsibility of aged care providers to provide a mandatory minimum level of care. With a registered nurse required to be on-duty and on-site 24/7 from 1 July 2023. An average 200 minutes of care delivered to residents from 1 October 2023.

These standards will be monitored closely through existing aged care reporting. Where the Aged Care Quality and Safety Commission (ACQSC) identifies a risk, they may issue a non-compliance notice. Providers who receive a notice will need to take specific actions and/or face proportionate enforcement action.

Furthermore, provider performance against care minute requirements is one of the measurable indicators. This will be used to inform the star rating system published on the My Aged Care website.

Reforms and Regulatory Framework

Recognising the need for significant reforms, the Australian government has committed $72.3m to transforming the regulatory model and prudential framework into a new Aged Care Act. This Act aims to create a person-focused and rights-based aged care system that prioritises the needs and preferences of older Australians.

The government's response to the Royal Commission's findings is divided into three phases: immediate actions, short-term measures, and longer-term reforms.

Immediate actions:

  • Increasing funding for home care packages
  • Implementing additional support for residential aged care providers
  • Addressing the waiting list for care services

Short-term measures:

  • Strengthening regulations
  • Improving workforce capacity

Longer-term reforms:

  • Implementing the AN-ACC funding model
  • Improved access to services
  • Better integration with the healthcare system

These longer-term reforms encompass significant changes to the aged care system. One of the key reforms involves establishing an Independent Health and Aged Care Pricing Authority. This authority sets pricing for aged care services based on transparent and objective criteria. This will ensure fair and sustainable funding for service providers.

Integration of Technology

Integrating technology into the aged care sector has the potential to revolutionise service delivery. Technological advancements can improve health outcomes and enable aging in place, allowing people to grow old in the comfort of their private residence. For example, telehealth, assistive devices and remote monitoring systems make it easier to access care outside of an aged care facility. Embracing innovative solutions and investing in digital infrastructure enhances efficiency, communication and overall care quality. 

Telehealth services have become increasingly important for older Australians to access healthcare consultations. This was especially important during COVID-19, as they allowed older Australians to communicate with medical professionals while avoiding exposure. Wearable sensors and smart-home technologies are other fantastic examples of how technology can enable seniors to live independently. 

The Australian government recognises the potential of technology in aged care and actively supports its integration. Initiatives include funding for digital health infrastructure, promoting digital literacy among older Australians and supporting research and development of innovative technologies tailored for aged care.


The aged care industry in Australia is undergoing critical change. 

Despite ongoing challenges such as funding issues, workforce shortages, and concerns about quality of care, the sector is undergoing significant reforms with the aim of improving the lives of older Australians. These reforms primarily focus on increasing funding, addressing workforce shortages, and enhancing quality and safety standards. Additionally, the integration of technology holds great promise for the future of the aged care industry. 

By prioritising the needs and well-being of older Australians, Australia can strive to build a sustainable and compassionate aged care system. This system will ensure that dignity and support are provided to the aging population. The successful implementation of these reforms, combined with continued collaboration and investment, will be crucial in shaping the future of aged care in Australia.


For more information reach out to your local RSM office today.