Federal Budget 2020 - Member Briefing & Resources


Viability Agreements: This year has seen incredible fluctuations in the Australian health system, exposing gaps and challenges as well as strengths and new partnerships that highlight the importance of integrated and cooperating sectors. The anticipation of hospital capacity shortages due to COVID-19 as well as restrictions on elective surgeries led to the establishment of Viability Agreements between private hospitals and state and territory governments, and a new wave of cooperation and collaboration between public and private hospitals. The Commonwealth Government has contributed an estimated $1.7 billion to the viability agreements.

Telehealth: To protect the public and clinicians from disease transmission, we have seen the rapid expansion of telehealth services with over 30 million telehealth consultations delivered this year and a $2.4 billion commitment to continue these MBS-funded services until March 2021, while the long term design is developed in conjunction with medical groups and the community.

Private Health Care and Private Health Insurance: CHA is pleased that the Government has adopted its recommendation to encourage the uptake of private health insurance by young people. Insurers will be able to increase the age of dependants on their family policy– from 24 to 31 – to encourage continuity of cover, and will also allow people with a disability to remain on their family policy without an age limit. 

..... And $2.4 million has also been allocated to review the appropriateness of Lifetime Health Cover (LHC) and Risk Equalisation to determine whether changes could improve value and effectiveness for consumers. This budget measure to review LHC was also recommended by CHA.

Out-of-Hospital care: It is welcome news that the Government has committed to work towards the expansion of out of hospital care, following on from CHA’s major report on the sector released last month. Services will begin with mental health and rehabilitation (focused initially on orthopaedics), with the implementation of reforms to start on 1 April 2021. CHA will continue to work with Government and other stakeholders on the implementation of these report findings.

Out of pocket costs: The transparency of out-of-pocket costs for more than 13.6 million Australians with private health insurance will be assisted by the Medical Cost Finder website. This Budget commits $17.1 million to enhance the website which collects, validates and publishes individual non-GP medical specialist fees for consumers. This funding is intended to improve consumer choice and transparency in out-of-pocket costs associated with specialist care.

Here is a breakdown of other key measures announced in the Budget: 

Mental Health and Telehealth 

  • $5.7 billion to be spent on mental health in 2020–21, including doubling of the number of Medicare-funded psychological services from 10 to 20 through the Better Access Initiative. 
  • $2.4 billion investment in continuing MBS telehealth services to 31 March 2021, while the long term design is developed in conjunction with medical groups and the community. 
  • $43.9 million in additional assistance to Victoria for mental health support. 
  • $76 million in mental health support for those impacted by the bushfires. 

Vulnerable Populations 

  • $4 billion towards Aboriginal and Torres Strait Islander health funding including a new funding model for primary care services. 
  • $0.8 million towards programs that ensure eligible homeless people have access to essential PBS medication at no cost.
  • $2.6 billion to provide two separate Economic Support Payments at $250 each to age pensioners, disability support pensioners, eligible veterans, concession cardholders, and other social security recipients. 
  • Changes to Youth Allowance and ABSTUDY mean that young applicants will automatically be deemed to have worked over the six month period from 25 March to 24 September 2020 to assist those seeking to meet the workforce participation criteria. 
  • Support for new parents whose employment was interrupted by the COVID-19 pandemic to have an alternative to the Paid Parental Leave work test period. 
  • $84.5 million for the next three years to maintain critical frontline community service workers that run programs for the Department of Social Services. This accounts for more than 500,000 people with women representing 84% of the workforce. 


  • New 2020-25 National Health Reform Agreement, $133.6 billion investment in hospitals over five years, an increase of $33.6 billion. The additional funding will help support new immunotherapies, hospital care in the home, and treatment for rare conditions. This will also ensure equitable access to care by removing incentives that preference private patients in public hospitals. 
  • $4.8 billion over two years in the National Partnership Agreement that includes $3.1 billion to states and territories and $1.7 billion for the private hospital viability guarantee, which will remain over the course of the pandemic. 
  • $3.3 billion to support the COVID-19 National Medical Stockpile including a detailed list if items contributed to the stockpile. 


  • $30 million to fast-track e-prescribing implementation by extending the COVID-19 Home Medicines Service until 31 March 2021. This will allow patients to continue to receive their medications in the protection of their own homes. 
  • $1.1 billion in new PBS listings, amounting to approximately 30 new medicines per month, to continue to provide access to affordable medicines for patients. 


  • $6.6 billion over the next four years for medical research and clinical trials including: 
  • Medical Research Futures Fund ($2.5 billion) 
  • National Health and Medical Research Council (NHMRC) ($3.6 billion) 
  • Biomedical Translation Fund BTF ($500 million) 
  • $424.3 million for new research grants and new program openings. 
  • $2.3 billion for COVID-19 vaccine research and manufacturing doses to fast-track the development of treatments. 
  • An additional $22.5 million towards the Antimicrobial Use and Resistance in Australia surveillance system (AURA) to monitor the threat of antimicrobial resistance.


The 2020-21 Budget contributes little in the way of reform of the aged care sector. Perhaps not unexpectedly, the indications are that a substantive reform program will await the Government’s response to the Final Report of the Royal Commission, most likely in the 2021-22 Budget context. The Budget Speech makes reference to this by noting that “the Government will provide a comprehensive response to the final recommendations following receipt of that report. This will involve significant additional investment”.

The aged care Budget’s focus is strongly on responding to the COVID-19 pandemic, with the major reform measures being the release of a further 23,000 home care packages, and funding for the continued development of a single home-based care program and a new residential care funding model to replace ACFI.

Disappointingly, the current financial pressures facing residential care are not addressed. The only hope looking forward is the implementation of the new funding model and the creation of an independent pricing authority for aged care, as proposed by the Royal Commission. In the meantime, the Government has responded to the financial pressures facing residential providers by providing additional funding under the Business Improvement Fund i.e. it has opted to facilitate business improvement or the exit of poor financial performers rather than provide additional across the board funding pending the implementation of the new funding model.


There were a number of previously announced measures included in the 2020-21 Budget, including a large number of COVID-19 related measures. 

  • $29.8 million for the introduction of the Serious Incident Response Scheme from early 2021, subject to legislation.
  • $10.8 million over five years from 2020-21 to enhance the skills and competencies of Enrolled Nurses and Registered Nurses working in aged care by expanding the Australian College of Nursing Scholarship Program and establishing an Aged Care Transition to Practice Program to help graduate nurses transition to the aged care workforce, and to establish a skills development program for nurses and personal care workers working in residential aged care.
  • $10.6 million over three years from 2020-21 to establish a network of care coordinators to assist younger people in residential aged care or who are at risk of entering residential aged care to look for more age-appropriate accommodation and supports.
  • $245.0 million in 2020-21 for a COVID supplement to assist all Commonwealth-funded residential aged care providers and home care providers with the cost of operating during the COVID-19 pandemic. This assistance includes a further lump sum payment paid to every residential aged care provider, as well as continuation of the 30 per cent increase to the viability and homeless supplements for eligible residential and home care providers. Under this funding, trained infection control officers will be mandated, responding to the recommendation of the Aged Care Royal Commission COVID-19 report. 
  • $205.1 million over two years from 2020-21 ($159.0m including income tax revenue impacts) to support the direct care workforce through a third instalment of the workforce retention bonus and additional funding for the second instalment. 
  • $103.4 million in 2020-21 to continue the COVID-19 aged care preparedness measure that supports aged care providers to manage and prevent outbreaks of COVID-19, including infection control. This includes a number of measures to directly support the aged care workforce 
  • $92.4 million in 2020-21 to expand support under the Supporting Aged Care Workers in COVID-19 Grant Opportunity for aged care providers in designated COVID-19 ‘hotspots’ 
  • $71.4 million in 2020-21 to support residents of aged care facilities who temporarily leave care to live with their families 
  • $9.1 million in 2020-21 to support the operation of the Victorian Aged Care Response Centre
  • $9.0 million in 2020-21 for the Department of Health and the Aged Care Quality and Safety Commission to support the ongoing regulation of the aged care sector.
  • $146m to fund COVID-19 testing for aged care residents and workers to help limit and prevent potential outbreaks in residential aged care facilities.


  • $1.6 billion over four years from 2020-21 for the release of an additional 23,000 home care packages across all package levels to be released from 2020. This is in addition to the $325.7m announced on 8 July 2020 to fund an additional 6,105 home care packages (2,035 at each of levels 1, 2 and 3) that commenced in July 2020. 
  • $125.3 million over three years from 2020-21 to replace the Commonwealth Continuity of Support Programme with a new Disability Support for Older Australians program to ensure that older Australians with disability who were not eligible for the National Disability Insurance Scheme (NDIS) continue to receive the supports they need. The new program will start from 1 July 2021. It will be more in line with the NDIS, and provide a more client-centred program. It will help to meet growing demand, from providers and consumers, for funding higher needs.
  • $91.6 million over two years from 2020-21 to continue the reform of residential aged care funding using the Australian National Aged Care Classification (AN-ACC).
    • It includes the development of a new residential aged care payment system and modifications to the My Aged Care IT system, as well as funding to undertake one year of ‘shadow assessment’ starting in the first half of 2021.
    • During this year of shadow assessment, all residents will be assessed by an independent assessor using the AN-ACC assessment tools, though funding will continue to be provided through the existing Aged Care Funding Instrument during this period.
    • The Government will continue to consult with the sector on implementation matters before final decisions on the commencement of AN-ACC and an ongoing assessment workforce are finalised. 
  • $35.6 million over two years from 2020-21 to provide additional funding for the Business Improvement Fund to continue assisting eligible aged care providers “to improve their financial operations”.
    • The Fund supports eligible residential aged care providers that are experiencing financial difficulty to undertake business improvement activities; assist with the sale or transfer of a facility to another provider; or close a facility in a safe and orderly way.
    • The Government has opted to facilitate business improvement or the exit of poor financial performers rather than provide additional across the board funding pending the implementation of the new funding model.
  • $26.9 million in 2020-21 to support the operation of the My Aged Care system.
  • $26.0 million in 2020-21 to maintain the capacity of the Aged Care Quality and Safety Commission in its ongoing regulation and compliance of the aged care sector Health.
  • $21.0 million over four years from 2020-21 as a result of the delay in the implementation of payment in arrears and on invoice for home care services, as well as to provide transition support to providers to adjust to these arrangements. The payment of home care subsidies in arrears will now occur from February 2021, subject to legislation. 
  • $4.6 million over two years from 2020-21 to review the support care needs of senior Australians who live in their own home and determine how best to deliver this care in the home. This will include the continued development of a single in-home care program, and will include further research and consultation with the sector, consumer representatives and peak bodies.
  • $11.4 million in 2020-21 to defer the introduction of a cost recovery levy for unannounced site visits.
  • $11.3 million in 2020-21 to provide additional dementia services and training programs. This will include support for carers of people experiencing behavioural and psychological symptoms of dementia through increased psycho-social support services across the health and aged care sectors.
  • $10.3 million over three years from 2020-21 to support the Aged Care Workforce Industry Council to implement the Aged Care Workforce Strategy. 
  • $4.1 million in 2020-21 to support the Department of Health and the Aged Care Quality and Safety Commission to respond to requests from the Royal Commission into Aged Care Quality and Safety.


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