Australia’s aged care sector is undergoing significant reform as 2025 begins, marking one of the most substantial changes to the system in decades. The Albanese Government's commitment culminates today, January 1, with multi-faceted investments aimed at revolutionizing pay and conditions for aged care workers, as well as support for service providers and older Australians.
The reforms feature increased wages for approximately 340,000 aged care workers across residential and home care services, recognizing the importance of their roles. Under these new measures, workers will see their award wages increase, with some experiencing their first wage boost today. A follow-up increase is slated for October 1, 2025, which builds on the previous commitments made to the aged care workforce.
According to Anika Wells, the Minister for Aged Care, “Today is a historic day for aged care workers, who will receive the award wage increases they deserve.” This sentiment reflects the government's long-term vision of creating equitable compensation for those dedicated to caring for older Australians. Alongside the wage adjustments, the federal government is investing $3.8 billion over four years to assist the aged care sector with this implementation—a notable addition to the earlier $11.3 billion promised for the prior wage increase.
These financial reforms are not merely about raising wages. They aim to bolster the aged care workforce sustainably by enhancing career pathways for aspiring nurses. The government has committed $18.4 million to the Aged Care Nursing Clinical Placements Program, supporting up to 8,000 nursing students as they explore the rewarding field of aged care. Further, $10.3 million will continue supporting nurses through the Aged Care Transition to Practice Program, helping nearly 2,125 new nurses gain the skills they need for successful careers.
But the changes don’t just touch the workers—they also extend to the service providers responsible for the care of older Australians. Starting today, all Commonwealth Home Support Programme (CHSP) meals providers will benefit from a 10% cost-of-living top-up to their meals funding. This measure aims to alleviate financial pressures on these service providers and is expected to inject $37 million over the next three years to support nutritious meal delivery, which is so pivotal for seniors’ health and community engagement.
The government has also allocated $157.8 million for continued COVID-19 support, ensuring residential aged care facilities have the resources necessary to deal with on-going challenges posed by the pandemic. This allocation includes funds for proactive outbreak management, bolstering workforce supply during peak periods, and improving vaccination rates among staff and residents.
Minister Wells emphasized the holistic nature of these reforms, stating, “Our investment is focused on delivering the largest improvement to aged care in 30 years, building and strengthening the aged care workforce with fairer wages, and improving care for over 500,000 older people seeking aged care every year.” With such expansive initiatives, the government hopes to modernize Australia’s aged care services significantly, ensuring they reflect the needs of both workers and the aging population.
This year marks not just increased funding but also wider changes as the government introduces various measures affecting Australians broadly. Alongside wage rises for aged care workers, welfare payments will increase due to indexation, positively impacting over one million Australians reliant on these supports.
Education Minister Jason Clare pointed out these changes as part of the government’s broader economic strategy, addressing cost-of-living concerns. “This year we’ve cut taxes, cut costs of childcare, and rolled out free TAFE courses across the country,” he noted. Clare highlighted the interconnectedness of these changes—a comprehensive response catering to the welfare of Australians as they navigate economic challenges.
With the dawn of 2025, Australia finds itself at the cusp of transformative change. The initiatives surrounding aged care signify a historic pivot, aiming not only to uplift the workers who provide necessary services but also to improve the wellbeing of elderly Australians. This decade may very well witness the regeneration necessary to address the challenges posed by demographic shifts, ensuring the aged care system evolves alongside the population it serves.