Federal Budget 2026-27: Health & aged care

The Budget represents a significant investment in health and aged care, anchored by a renewed National Health Reform Agreement providing $220.3 billion over five years for public hospitals, $5.9 billion in new Pharmaceutical Benefits Scheme listings, and $2.1 billion to strengthen Medicare. In aged care, $1.4 billion is allocated to improve access to home care support and $606.5 million to stimulate residential bed supply.

National Health Reform Agreement

• $220.3 billion will be invested over five years in public hospital services and the implementation of the 2026–2031 Addendum to the National Health Reform Agreement (NHRA), including:
  • $24.4 billion over five years from 2026–27 in additional NHRA funding
  • $221.0 million in additional funding to the Australian Capital Territory, Northern Territory, and Tasmania to support public hospitals until the Independent Health and Aged Care Pricing Authority (IHACPA) completes its review of small jurisdictional price weighting and
  • $200.0 million over five years from to states and territories for the NHRA Better Health Outcomes for Aboriginal and Torres Strait Islander People Schedule, with funding to be matched by the states and territories.
• The Budget also provides $210.6 million over eight years to fast‑track the delivery of new national digital health infrastructure, implement and monitor activities under the NHRA and MBS, and maintain access to cancer treatments while public prices in radiation oncology are reset.

Pharmaceutical Benefits Scheme (PBS) listings

$5.9 billion will be provided over five years for new and amended listings on the PBS and the Repatriation Pharmaceutical Benefits Scheme.

Modernising private health

• $3.0 billion in savings over four years will be provided by removing the age‑based uplift of the Private Health Insurance Rebate (the PHI Rebate) from 1 April 2027, to enable a simplified and more equitable distribution of the PHI Rebate.
• The savings from this measure will be invested in the aged care sector to deliver more residential aged care beds and improve affordability and access to home care supports.

Strengthening Medicare

• $2.1 billion will be provided over five years (and $599.6 million per year ongoing) to promote access to high quality primary and specialist health care services and to increase access to bulk billing. Funding includes:
  • $1.8 billion over five years (and $580.2 million per year ongoing) to fund Medicare Urgent Care Clinics for urgent, but not life‑threatening, conditions and
  • $119.3 million over three years to extend the Practice Incentives Program Quality Improvement Incentive for two years until 30 June 2028 to support general practices to achieve continuous quality improvement.
• The Budget will also extend contingency arrangements to support a nationally consistent rollout of the free, nationwide 24/7 telehealth service 1800MEDICARE, and will extend the current Specialist Training Program grant agreements with specialist medical colleges by one year from February 2027.
• $745.1 million will be provided over four years (and $17.6 million per year ongoing) to strengthen the integrity and functionality of critical Medicare systems and infrastructure to ensure health services in Australia are delivered efficiently and effectively. Funding includes:
  • $598.3 million over two years to support the continued operations and enhancement of My Health Record, including delivering targeted system improvements that will underpin implementation of further legislative reforms to expand sharing by default requirements under the Modernising My Health Record (Sharing by Default) Act 2025 (Cth) and
  • $146.8 million over four years (and $17.6 million per year ongoing) to establish enhanced, expanded, and ongoing Medicare integrity capabilities to improve non‑compliance and fraud detection, disruption, and prevention efforts in relation to the MBS and PBS.

Securing the NDIS

• The Budget will provide $1.7 billion over five years (and $110.9 million per year ongoing) to support people with disability and to improve the quality of supports delivered through the National Disability Insurance Scheme (NDIS). Funding includes:
  • $358.5 million over five years to develop and implement a new enrolment and digital payment system to improve payment integrity and reduce fraud and non‑compliant payments
  • $280.1 million over five years (and $53.0 million per year ongoing) to continue the Fraud Fusion Taskforce and invest in detection of and response to fraud and non‑compliant payments
  • $270.1 million to prepare for the roll‑out and implementation of new framework planning from 1 April 2027 and
  • $182.6 million over four years (and $46.1 million per year ongoing) to introduce mandatory registration of high‑risk NDIS providers, with costs partially offset by $27.1 million over three years (and $5.4 million per year ongoing) in receipts from expanded cost recovery arrangements.
• This measure is projected to reduce growth in NDIS payments by $37.8 billion over four years, relative to the NDIS Actuary's updated projections. NDIS payments are projected to be below the 2025–26 MYEFO estimates by $23.9 billion over five years from 2025–26.
• $200.0 million will be provisioned over three years to establish an Inclusive Communities Fund to support community organisations to deliver group-based social and community participation activities and individual capacity building support for NDIS participants.

Improving access to home care

$1.4 billion will be provided over four years (and $377.3 million per year ongoing) to improve affordability and access to home care supports, including:

• $1.0 billion over four years (and $336.8 million per year ongoing) to ensure 'personal care' (including showering) is fully funded and
• $389.8 million over four years (and $40.5 million per year ongoing) to implement Support at Home program refinements, including to assessments, hardship applications and the end‑of‑life pathway, and to bring forward the release of Support at Home program places in 2026–27.

Residential aged care supply

• $606.5 million will be provided over four years (and an additional $3.0 billion from 2030–31 to 2035–36) to respond to the Residential Aged Care Accommodation Pricing Review to increase bed supply. Funding includes:
  • $348.4 million over four years (and an additional $2.7 billion from 2030–31 to 2035–36) to introduce capital subsidies for residential aged care providers, including:
    • $30.00 per supported resident per day upon commencement of newly constructed homes, payable for up to 25 years
    • $15.00 per supported resident per day upon commencement of significantly expanded homes, payable for up to 15 years
    • $224.3 million over four years (and an additional $317.5 million from 2030–31 to 2035–36) for dementia care support, including the expansion of the Hospital to Aged Care Dementia Support program from 11 to 20 locations nationally and up to 20 additional Specialist Dementia Care Program units.
  • $1.1 billion will be held in the Contingency Reserve for future spending to increase the Accommodation Supplement and introduce an additional payment for high supported resident ratios.

Better care for older Australians

The Budget will provide $565.1 million over four years (and $2.1 million per year ongoing) to increase regulatory, governance and quality arrangements, sector viability and workforce supports to provide better care for older Australians. Funding includes:

• $259.9 million in 2026–27 for technology systems and
• $120.3 million in 2026–27 in additional funding for the Aged Care Quality and Safety Commission.

Improving access and uptake of medicines and vaccines

The Budget will provide $590.7 million over five years from 2025–26 (and $60.9 million per year ongoing) to improve access to medicines, vaccines, and health technology.

• $449.3 million over five years (and $60.9 million per year ongoing) to support the addition of the Respiratory Syncytial Virus (RSV) vaccine Arexvy® to the National Immunisation Program (NIP) for older Australians aged 75 and over and Aboriginal and Torres Strait Islander peoples from the age of 60
• $71.0 million over three years to continue the Precision Oncology Screening Platform Enabling Clinical Trials program to give patients with advanced or poor prognosis cancer access to comprehensive genomic profiling to identify matches to potential clinical trials
• $41.2 million over four years to improve vaccination rates amongst children under five and
• $0.5 million in 2026–27 to support revised Strategic Agreements with the medicines industry to sustain continued access to new medicines.

Preventive health

• $488.2 million will be invested over five years (and $107.8 million per year ongoing) to improve health outcomes through preventive health, equitable access and early intervention. This includes $431.0 million over four years (and $107.8 million per year ongoing from 2030–31) to extend the Federation Funding Agreement for Public Dental Services for Adults.
• The Budget also extends access to the Child Dental Benefits Schedule to state and territory dental services on an ongoing basis from 2026–27.

Health protection

The Budget provides funding of $447.9 million over five years (and $96.5 million per year ongoing, including $299.9 million in capital funding over five years from 2025–26 and $74.2 million per year ongoing) for health care preparedness and prevention measures. This includes $379.4 million over five years (and $96.5 million per year ongoing) to provide funding certainty for the National Medical Stockpile for pandemic preparedness and response to health emergencies, including $20.0 million in 2025–26 for an Emergency Health Resilience Preparedness Fund to respond to supply chain shocks or disruptions due to ongoing conflict in the Middle East.

Mental health

The Budget provides $283.2 million over four years to continue to strengthen Australia's mental health and suicide prevention system, including $277.5 million in 2026–27 to extend the National Mental Health and Suicide Prevention Agreement (the Agreement) to 30 June 2027.