On 12 May 2026, Treasurer Jim Chalmers handed down the Albanese Government's fifth Budget, framing it as the most 'ambitious' Budget in decades.

Delivered against the backdrop of a major global oil shock, stemming from ongoing conflict in the Middle East, the Budget focuses on taming inflation, increasing productivity, and building resilience. The Treasurer described the Budget as delivering a fairer and stronger tax system for future generations which embraces intergenerational responsibilities, while responding to the pressures of the here-and-now.

The Budget provides significant investment in the aged care sector and fuel security, while introducing major cuts and reforms to the National Disability Insurance Scheme (NDIS).

We provide a high-level overview of the key takeaways for the human services sectors from the Budget.

Aged Care

• The Government announced a $3.7 billion funding package for aged care, with the aim of delivering more beds and Support at Home packages to deliver high quality care and services to older Australians.
• In an effort to help reduce hospital and waitlist 'backlog', from 1 July 2027, the Government will invest $1.7 billion to promote equity of access to residential care. It will achieve this by:
  • incentivising the construction of 5,000 residential aged care beds;
  • introducing new targeted capital subsidies and providing funding for supported residents in newly built or refurbished homes. $348.4 million over four years will be used to introduce capital subsidies including $30 per supported resident per day upon commencement of newly constructed homes, payable for up to 25 years and $15 per supported resident per day upon commencement of significantly expanded homes, payable for up to 15 years; and
  • establishing 20 new Specialist Dementia Care Program units and expanding the Hospital to Aged Care Dementia Support Program at a cost of $224.3 million.
• The Budget allows for an increase in the Accommodation Supplement, with structural reforms introducing new funding tiers and an additional payment for homes with over 60% supported residents.
• In the face of ongoing criticism, the Government will provide $389.8 million to accelerate the release of Support at Home packages, with the aim of making the program fairer and more affordable.
• The Government has committed $1 billion to fund changes to Support at Home pricing structures announced earlier this month. The Government will, from 1 October 2026, fully subsidise certain personal care services (showering, continence and dressing consumables). These services, previously payable by individuals, will form part of the clinical care service list.
• The Budget allocates $565.1 million over four years towards strengthening regulatory, governance and quality arrangements, sector viability and workforce support to promote the delivery of high quality care. The majority of this allocation will be directed to sustainable ICT systems for both the Aged Care Quality and Safety Commission (Commission) and providers, increasing funding for Commission regulatory activities and directing investment to ensure sustainability of smaller aged care programs.
• The Government aims to achieve savings of $133 million over three years through revised cost recovery arrangements under the new charging model of the Commission, although details about how this model will work remain unclear. The Department of Health, Disability and Ageing will partially meet the cost of this measure from within existing resources and from savings identified in the Health, Disability and Ageing portfolio.

NDIS

• The Government announced it will provide $1.7 billion over five years (and $110.9 million per year ongoing) to support people living with disability, and to improve the quality of supports delivered through the NDIS.
• The Treasurer has framed these reforms as restoring the NDIS to its 'original intent', to 'save it from itself' and secure it for future generations. To that end, the Government will focus on four key areas:
  • commissioning plan management, support coordination and home and living supports to improve service quality and provider viability;
  • introducing standardised, evidence-based functional capacity assessments to clarify eligibility;
  • tightening plan reassessment criteria, resetting participation and capacity building budgets, and rolling out New Framework Planning from April 2027 to control costs; and
  • strengthening provider oversight, National Disability Insurance Agency enforcement powers and regulatory controls to combat fraud.
• These NDIS reforms are expected to save $37.8 billion over four years, expanding to $152.5 billion over a decade. Notwithstanding these savings, the Government anticipates and acknowledges that the NDIS will continue to grow year on year and will remain Australia's largest social program outside the Age Pension.
• The Government is providing $2 billion to establish the 'Thriving Kids' program as part of the $5 billion Foundational Supports commitment to be matched by the states. Limited detail has been released in the Budget about how this money will be spent.
• In addition, the Government has signalled that it will consult on:
  • a commissioning approach for home and living supports for NDIS participants requiring 24/7 support;
  • further reforms to the market for participant supports for social and community participation and capacity building activities;
  • differentiated pricing; and
  • the design of functional capacity assessment tools and instruments.
• Importantly, changes to assessing access based on functional capacity are not slated to commence until 1 January 2028.

Healthcare

The Government announced major investments in healthcare, including:

• $1.8 billion over five years to make Medicare Urgent Care Clinics permanent, expanding the network of clinics to 137. This will mean that four in five Australians will live within a 20-minute drive of a clinic by July 2026. The clinics offer bulk billed urgent health care seven days a week across extended hours, while reducing pressure on local hospital emergency departments;
• $11.4 billion to incentivise bulk billing, with the national General Practitioner bulk billing rate rising to 81.4%following reforms commenced on 1 November 2025, targeting nine out of ten GP services bulk billed by 2030;
• $25.3 million in targeted funding to support up to six new fully bulk billing GP clinics in targeted regions;
• $25 billion in additional funding for state and territory hospitals;
• $169.7 million to increase allied health provider fees;
• $3.5 billion to strengthen Medicare, bringing the total to $27.8 billion since October 2022;
• $5.9 billion to list new medicines on the Pharmaceutical Benefits Scheme including treatments for cystic fibrosis, chronic kidney disease, various cancers and permanently subsidised COVID-19 antiviral medicines.

Further, the Government is maintaining a strong National Medical Stockpile, including a strategic reserve of medical supplies such as vaccines and personal protective equipment, and providing $20 million in 2025–26 for an Emergency Health Resilience Preparedness Fund to respond to immediate supply chain risks in the context of conflict in the Middle East.

Other considerations for the human services sectors

• The Government acknowledged that inflation rose to 4.6% in the 12 months to March 2026, driven by a 32.8% rise in fuel prices. The Government expects that higher fuel prices will continue, with the impact of those prices flowing through to other goods and services. In response, the Budget allows for short-term price relief and longer-term supply measures. The Government has allowed over $10 billion in the Budget to create an Australian Fuel Security and Resilience package to protect Australia's energy interests. The Government has more than halved fuel excise, reduced heavy vehicle charges to zero for three months, and is providing interest-free loans to support transport and logistics cashflow. For aged care and disability providers, these measures may moderate transport and delivery costs, particularly for workforce travel and service delivery, while broader actions to secure fuel supply and improve supply chains aim to reduce the risk of future price spikes and disruption.
• More broadly, the Government is reforming the permanent migration points test, to select better-educated, higher-skilled and younger migrants overall. This may assist providers in workforce recruitment.
• The Government will invest $1.2 billion for First Nations communities, including promoting investment in justice, health, water and digital connectivity, and expanded support for women's health and gender equality initiatives.
• The Budget allocates $583.4 million to advance the implementation of the Royal Commission into Defence and Veteran Suicide recommendations, including $29.8 million to establish a National Veterans' Data Asset.

We will continue to monitor the human services, aged care and healthcare developments arising from the Budget and provide further updates as relevant. Please do not hesitate to reach out if you have any questions.

For broader insights and analysis on the Federal Budget, visit our Australian Federal Budget 2026/27 hub.