Catholic Health Australia Submission: Private Health Insurance Amendment (Modernising the Private Health Insurance Rebate) Bill 2026
September 1, 2026
The Government’s decision to impose a real-terms funding cut on aged care providers across the country poses a serious risk to quality care for older Australians and must be revisited immediately, Catholic Health Australia said today.
The decision announced on Wednesday to lift the Australian National Aged Care Classification (AN-ACC) price by only 2.55% from 1 October is well below inflation and fails to meet the rising cost of caring for older Australians.
“This is a significant real-terms funding cut which further jeopardises older Australians’ access to quality, sustainable care at a time when the sector is badly struggling,” said Alex Lynch, Director of Aged Care at Catholic Health Australia.
“Catholic providers are particularly concerned about the impact of this underfunding for regional Australia, where costs are growing beyond those in the cities.
“Many providers are already making an operating loss and this funding cut will put them in greater peril.
“They will have no choice but to scale back support services and delay or scrap many plans for providing new services, as well as capital works and investment in urgently needed new beds.
“The funding cut undermines the new Aged Care Act, which was designed to keep older Australians safe, leaving providers unable to absorb the significant compliance, governance, and administrative costs of implementation.”
CHA is calling on the Government to work with the sector and urgently revisit this decision and increase funding indexation to reflect real costs.
“The Government has made significant decisions to support the aged care system but this funding cut is a major step in the wrong direction,” said Mr Lynch.
“It goes directly against the Government’s aim to ensure Australians have access to a quality, affordable and safe aged care system and must be reconsidered.
“Providers are being clear that this move will jeopardise critical services that directly impact older Australians.
“This includes non-clinical staff, compliance teams whose job is to respond to resident and family feedback, workforce development and innovation.”
