2024/25 Federal Budget Breakdown: NDIS and Aged Care

At a glance

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• The federal government announced the budget for the 2024-25 financial year
• Major changes will come into play, especially for the NDIS/disability and aged care sectors
• NDIS participant payments will be curbed by $14.4 billion, and automatic top-ups will no longer be available once funds are exhausted
• The NDIS will see the establishment of an Evidence Advisory Committee and a new disability employment program
• $2.2 billion will be spent on aged care to deliver more reforms and improve care
• The majority of the 2024-25 budget package will focus on home care and reforms to the Aged Care Quality and Safety Commission

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Introduction

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On Tuesday, 14 May, the Albanese government announced its third budget in its tenure, this time for the 2024-25 financial year.

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Treasurer Jim Chalmers handed down the budget, which primarily sought to ease the pressure created by rising living costs. The Treasurer says the budget “strikes the right balance between supporting the economy and households while not adding to inflation.”

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We won’t explore all the areas covered, but we will focus on changes in spending on the disability and aged care sectors. 

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Let’s look at some of these changes in more detail.

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NDIS/Disability Sector

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What are the changes?

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In the 2023-24 financial year, government spending on the National Disability Insurance Scheme (NDIS) surged by 21%. This meant the government spent $44.3 billion on the NDIS, exceeding the budget’s forecast by $2.4 billion.

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To curb this growth, the government will moderate NDIS participant payments by $14.4 billion and stop automatic top-ups when funds are exhausted. The government seeks to implement these changes over the next four years to keep “intra-plan inflation” within the NDIS in check.

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The government will build on the 2023-24 financial year’s budget of $732.9 million, providing more funding in the following areas:

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• $468.7 million to establish an Evidence Advisory Committee, implement pricing reforms, and invest in fraud detection
• A $227.6 million investment in a new disability employment program
• $214 million over two years to combat fraud and design NDIS reforms
• $160.7 million to upgrade the NDIS Commission’s information technology
• $20 million for consultation and design on the NDIS reforms

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This means the total funding for the NDIS over the next five years will be $5.4 billion.

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What does it mean for the sector?

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The government has been steadfast in its messaging: the NDIS remains committed to improving the experiences of people with disability and restoring the original intent of the scheme. However, the true impact of the budget changes remains to be determined. 

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Here are some potential outcomes we've identified:

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• Participants may lose out or be forced to fund expenses out-of-pocket, particularly when their funds are exhausted
• The budget may set in motion potential reforms identified in the 2023 NDIS Review, which will see the involvement of people with disability in the design
• More employment opportunities will be created in the short and long term for people with disability due to consulting and the new employment program
• Participants will have a better navigation and understanding of the NDIS with the establishment of the Evidence Advisory Committee
• Longer wait times for much-needed services and supports due to budget constraints or faraway dates, e.g. employment is needed now, but the new program will only come into existence by 1 July 2025
• More uncertainty within the sector as the budget outcomes are unclear, and reforms are yet to be implemented

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Aged care sector

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What are the changes?

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The aged care sector will see the government focus on improving the sector by spending an additional $2.2 billion to deliver reforms, provide more home care packages, and raise wages for aged care workers.

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The total package promises to deliver the following:

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• $531.4 million to provide 24,100 more home care packages next year
• $111.0 million to enhance the Aged Care Quality and Safety Commission
• $610 million to help long-stay older patients leave hospitals sooner
• $190 million to extend and redesign the Transition Care Programme for short-term care after hospital stays
• $88.4 million for workforce retention and staffing solutions

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What does it mean for the sector?

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The current reforms, particularly the implementation of the strengthened Aged Care Quality Standards, have been delayed from 1 July 2024 to 1 July 2025—a point of frustration for older people, carers, families, aged care workers, and providers, as many have been looking forward to the reforms.

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Most notably, the promise of increased wages/more wage growth has been a sore point for aged care workers, who have been “bitterly disappointed” at the delays in pay rises—which are only set to grow in 2026.

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However, the additional funds from the budget could mean:

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• Tougher reforms on the Aged Care Quality and Safety Commission and Quality Standards 
• Sounder benefits for older people, their carers and families, and aged care workers
• Reduced wait times/more availability of home care services
• Fewer hospital/medical costs as older people will be supported to be discharged from hospitals
• Increased wages/more wage growth (although this is only set to begin in 2026, despite the need for better wages now)

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Final thoughts

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The budget forecast looks somewhat promising, with increases in funding. However, delays to reforms and the implementation of wage increases remain ongoing challenges that the government has yet to address.

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