Federal Budget 2026-2027: health, aged care, disability and lifesciences snapshot

Some highlights from the health, aged care and disability portfolio of the 2026-27 Budget include:

• An additional $25 billion will be provided to public hospitals, including $24.4 billion through the 2026-31 National Health Reform Agreement (NHRA).
• The Australian Government’s Medicare Urgent Care Clinics will be funded as a permanent feature of Australian health care, reducing pressure on hospital emergency departments.
• Six new fully bulk billed GP clinics in the Newcastle, Central Coast, Lake Macquarie and Lower Hunter region.
• Additional funding for healthcare for First Nations, including birthing services, and further support for dialysis and kidney disease.
• All patients receiving intravitreal eye injections (IVI) will continue to access MBS rebates, regardless of whether they have their injections in or out of a private hospital.
• Integrity reforms will crack down on fraud and non-compliance under Medicare and the PBS.

• $5.9 billion in funding for new and amended PBS listings.
• The Commonwealth will commence consultations to consider if biosimilar medicines should be the default for new prescriptions.
• Increase in the Medical Research Future Fund (MRFF) each year from 2026-27 up to $1 billion annually by 2030-31.
• Establishing the National One Stop Shop, a national platform to support health and medical research/clinical trials, which is a great idea.
• Continued support for the Precision Oncology Enabling Clinical Trials (PrOSPeCT) Program.

• The Government is investing $1.7 billion to incentivise construction of up to 5000 aged care beds a year and protect equity of access for those less well off. 

• This investment includes $606.5 million to:

  • introduce new capital subsidies for aged care providers who build or expand residential accommodation.

  • deliver up to 20 additional Specialist Dementia Care units.

  • expand the Hospital to Aged Care Dementia Support program from 11 to 20 locations nationally.

It will be interesting to see if that makes a difference, with many aged care providers operating at a loss. The additional investment in dementia care is most welcome.

• Supported residents who don’t have the means to pay for their care will have access to more aged care homes and more beds thanks to two new building subsides for providers:
  • New homes will receive a new payment of $30 per supported resident per day.
  • Existing homes that undergo a significant expansion – increasing the number of beds by 40 per cent or more – will receive an extra $15 per supported resident per day.
  • Supported residents will also benefit from increases to the accommodation supplements paid to providers from 2027.
  • Homes that have more than 60 per cent supported residents will get an additional top-up payment from 2028.
  • The government is consulting on options to further boost the number of aged care beds. Options include an interest free or low interest loans scheme, increased accommodation pricing flexibility for higher means residents and an expanded Aged Care Capital Assistance Program.
  • More dementia support:
    • The successful Hospital to Aged Care Dementia Support Program will be expanded to 20 locations.
    • National registration scheme for personal care workers, including options for mandatory minimum qualifications.

The government will introduce the National Disability Insurance Scheme Amendment (Securing the NDIS for Future Generations) Bill following the release of the 2026-27 Budget implementing critical recommendations of the Independent Review into the NDIS and the Royal Commission into Violence, Abuse, Neglect and Exploitation of People with Disability.

Treasurer Jim Chalmers acknowledged that changes to the NDIS will do ‘much of the heavy lifting’ in this Budget, citing a significant reduction in spending of more than $37.8 billion over the next four years with ‘ambitious’ projections aimed to slow the growth of the scheme from 10 per cent to 2 per cent and move 160,000 participants off the scheme. The messaging is that the reforms are ‘saving the NDIS from itself’. 

Although media attention and government messaging has been focused on ‘fraudsters’, ‘shonks’ and abuse of the system by unregistered providers, the detail tells a much bigger story for participants, registered providers and workers in the industry. This is not a policy change; it's a fundamental reset.

Future eligibility for the NDIS will be based on a standardised, evidence-based assessment of a person’s functional capacity, rather than diagnosis. Access will be based on a substantial reduction in a person’s functional capacity that impacts their day-to-day living. These changes will commence 1 January 2028. The Government will establish a Technical Advisory Group and consult with the disability community, sector and states and territories on development of the assessment model.

To improve service quality, integrity standards and reduce fraud, the National Disability Insurance Agency will commission a limited number of plan managers and the NDIS Quality and Safeguards Commission will expand mandatory registration to high-risk providers. Upgrades to the NDIS payment system will improve integrity and user experience. Plans will no longer automatically rollover and unspent funds will stop being carried forward.

The National Disability Insurance Agency, which runs the scheme, also faces cuts, and its headcount will be reduced.

But the NDIS Quality and Safeguards Commission will gain almost 200 more staff as the government widens registration requirements for providers.

The Government will implement reforms across four pillars to secure the future of the NDIS.

1. To ensure quality services and supports that meet the needs of participants, the Government will commission plan management and support coordination and consult on a commissioning approach for home and living supports for Supported Independent Living participants so they receive the best supports and address provider viability challenges.

2. To set clearer eligibility requirements, the Government will put standardised, evidence‑based assessments of functional capacity at the core of determining access to the NDIS.

3. To slow cost increases, the Government will tighten criteria around plan reassessments and strengthen guidance about what are reasonable and necessary supports. Budgets for social, civic and community participation and capacity building daily activities will be reset, and New Framework Planning will deliver more equitable, consistent and sustainable participant plans from April 2027.

4. To fight fraud and stop rorts, the Government will increase oversight of providers and payments, strengthen the National Disability Insurance Agency’s investigative and enforcement capabilities, and introduce new regulatory controls to protect participants and the NDIS from exploitation.

It will be interesting to see how this pans out in practice and who misses out as the reforms will limit who has access to NDIS.

With many NDIS providers already under financial pressure, we anticipate, with the increased regulation under legislative reform and the cuts to NDIS reducing services , we expect to see more consolidation in the disability sector and workforce impacts including restructures and redundancies.

Children aged eight and under with developmental delay and/or autism with low to moderate support needs will benefit from Thriving Kids. The program will progressively roll out from 1 October 2026, with full rollout of services by 1 January 2028 providing additional supports for children with autism.

A Medicare-subsided health assessment will be available for GPs to assess the health and development of a child at three years of age and refer them to appropriate supports, including Thriving Kids.