Aged Care money is already there
No need to cut health insurance rebate to find money for Aged Care – it’s already there!
This week, the Federal Treasurer, Jim Chalmers, and Finance Minister, Katy Gallagher, announced the 2025/26 Final Budget outcome was $6 billion better than estimated, due to $4.6 billion in additional tax collected, and $1.4 billion in savings.
Shockingly, the entirety of this $1.4 billion in unspent money, which also enabled the Federal Government to retain its AAA Credit Rating, came from the Aged Care sector.
With tongue firmly planted in cheek, Well done older Australians!
In a time when there are insufficient funds to support vulnerable older Australians with Support at Home packages rationed, increasing numbers of older Australians awaiting Support at Home Services, and thousands more stranded in public hospitals – how does the Aged Care Minister, Sam Rae, allow $1.4 billion of approved funding for Aged Care to be returned to Treasury as savings?
If not for Australia’s most vulnerable who have worked, saved, contributed to, and built this country – what and who is the $1.4 billion being ‘saved’ for?
What makes this even harder to justify is that the Government’s own figures this week show the problem is not simply a lack of money. The 2025–26 Final Budget Outcome confirmed Commonwealth payments were $1.4 billion lower than forecast, with Finance Minister, Katy Gallagher, identifying lower-than-expected spending in aged care as one of the contributors.
At the same time, the Aged Care Minister has acknowledged around 100,000 people are in the Support at Home national priority system, with some people assessed as standard priority waiting six to eight months for support. That is the disconnect older Australians will struggle to understand: money is coming in below forecast while demand for care is still visibly unmet.
Significantly, aged care was one of the areas where spending came in below forecast, alongside the PBS, childcare and some national partnership payments.
National Seniors Australia (NSA) believes the $1.4 billion in savings could have been invested in showers and incontinence management delivered through the Support at Home program, instead of taking from the pockets of older Australians (1.2 million estimated to be pensioners) with Private Health Insurance (PHI) – many of whom have paid into it for four, five, up to six decades.
The cut to private health insurance rebate comes at a time when continued cost-of-living pressures will likely push many with PHI cover to drop or downgrade their cover, placing further pressure on already stretched public health systems.
If passed, the cut would take effect on 1 April 2027 – the same day as the annual government-approved premium increases. The change is estimated to raise more than $870 million in the first year of operation alone.
Rather than make Private Health Insurance more expensive on the guise it is to raise money for Aged Care, the government should spend the money it has already budgeted for Support at Home packages – and still save $530 million for the budget bottom line.
Here is another bottom line – the government doesn’t need to cut the health insurance rebate to find money for aged care – it’s already there!
My question to these ministers is this – How can the government sleep well at night knowing there are thousands of older Australians waiting for Support at Home or stranded in hospital who can’t? While also knowing there is $1.4 billion allocated for Aged Care in the budget, and just like its intended beneficiaries, it is just sitting there…
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