State-managed aged care

Why this is important

State-managed aged care services play a vital role in supporting some of Victoria’s most vulnerable older citizens. 

This is especially relevant in regional and rural communities, where public sector residential aged care services (PSRACS) are often the sole provider of care. These facilities care for individuals with complex needs who private providers may not accept. 

The Victorian Department of Health is the largest provider of public sector residential aged care in Australia. Its budget in 2025–26 was 32.4 per cent more than it was in 2024–25, which reflects the growing cost of delivering services for aged and home care.

In the 2025–26 Budget the government allocated $34.6 million to improve PSRACS and an additional $7.6 million over 4 years to improve medication practices in residential aged care settings. This built on funding provided in previous budgets.

Despite significant government investment and ongoing reforms, including the new Aged Care Act 2024, there are performance gaps around service availability, workforce shortages and equitable access.

It is important that PSRACS meet the needs of regional and rural Victorians, provide value for public resources, and are transparent and accountable in their delivery of aged care.

What we plan to examine

We plan to assess if Victorian PSRACS provide efficient aged care services.

Who we plan to examine

Department of Health

A selection of PSRACS facilities in regional and rural areas

Further information

We looked at residential aged care services and the condition of their facilities in our reports:

Conditions of Public Sector Residential Aged Care Facilities (2006)

Aged Care (1993).