What the Budget means for the health, aged care, disability and life science sectors

By Alison Choy Flannigan

The Federal Government's 2020-21 Budget includes a record $115.5 billion in 2020-21 and $467 billion over the forward estimates to deliver essential health services under the Long Term National Health Plan.


The Budget has been expanded to cater for extending key COVID-19 health initiatives, including the COVID-19 vaccine and treatment strategy; however, the future cost of COVID-19 is unpredictable.

$3.3 billion has been allocated for the National Medical Stockpile.

Mental health

The Budget has seen a significant increase in funding to $5.7 billion for mental health programs from 10 to 20 Medicare-funded psychological services.

Aged care

Aged care has seen an increase in funding to $23.9 billion, an increase of $2.2 billion, including $1.6 billion for 23,000 additional home care packages. 2000 of the packages at level four – the highest level of care – with 8000 at level three, 8000 at level two and 5000 at level one.

This includes $1.6 billion for the aged care pandemic response, $81 million for additional surge workforce and increased training for aged care workers, $8.4 million for supplementary payments to help cover quarantine costs and interstate staff, $205.1 million to extend the Aged Care Workforce Retention Bonus payment. Unfortunately, residential aged care remains significantly under-funded.


The Budget includes a further $3.9 billion for the National Disability Insurance Scheme. The Government is delivering on its commitment to implement a Participant Service Guarantee and setting clear standards and timeframes for decision making by the National Disability Insurance Agency (NDIA).

This will make it easier for people with disability and their families to navigate the NDIS. The Government is providing an additional $799 million over four years to the NDIA and the NDIS Quality and Safeguards Commission.


Hospitals are funded with 2020-21 funding of $23.6 billion, with $133.6 billion over five years through the new five-year National Hospital Funding Agreement.

Medicare and MBS

The Government continues to support Medicare with $119.3 billion over the forward estimates, including $2.4 billion in telehealth. Telehealth has been extended for six months with the long-term design in development. Telehealth should continue to provide Australians access to health care services in an efficient manner. Telehealth for specialists and allied health has been extended.

$41.5 billion has been allocated to Pharmaceutical Benefits Scheme (PBS) medicines funding over four years including the creation of the PBS New Medicines Funding Guarantee, allowing for new medicines to be funded.

Private health insurance

Private health insurers will be able to increase the age of dependants from 24 to 31 to encourage continuity of cover and also allow people with a disability to remain on their family policy.

Rural Health Strategy and Indigenous health

$550 million has been allocated as part of the Stronger Rural Health Strategy to give doctors more opportunity to train and practice in rural and remote Australia and bring much-needed health services to those communities. Indigenous health funding has been funded for $975.5 million in 2020-21, which is great, including for point of care testing in rural and remote areas.

Health and medical research

It is pleasing to see the increase in funding to support Australia’s health and medical research sector at this time. The NHMRC has been allocated $3.5 billion over the next four years and the Medical Research Future Fund has $424.3 million in new grants and opportunities.

Sport and preventative health

There is $230.8 million funding for sport and preventative health, including the sporting schools program.


Overall, the Budget includes much-needed funding for COVID-19 and home care packages; however, residential aged care remains significantly underfunded.

An infographic with ten small circles connected to a large central circle, illustrating what the Federal Budget 2020-21 will mean for the health and life sciences sector


Alison Choy Flannigan

Alison Choy Flannigan

Partner & Co-Lead, Health & Community

Alison specialises in advising clients in the health, aged care, disability, life sciences and community sectors. 

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