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2020-21 Federal Budget Analysis

The 2020-21 Federal Budget was handed down on Tuesday 7 October 2020 by the Hon. Josh Frydenberg, Treasurer.

OTA has prepared a summary of those Budget measures most relevant to occupational therapists. Click on the links below to skip to the sections of most interest to you.

The Bottom Line

Extraordinary in every way, the Morrison Government’s 2020-21 federal budget was brought down last night, fully five months later than originally scheduled. Over that five months, the government has spent several hundred billion dollars addressing the immediate effects of the worst global pandemic in more than a century. This has included paying the wages of hundreds of thousands of Australians who would otherwise have been destitute.

The detail of the budget reflects the extraordinary times in which we find ourselves. Outside of the Treasury, Infrastructure, and the Health and Aged Care portfolios, there were few new spending initiatives. This reflects the key aims of the Coalition in a time of pandemic: to kickstart a stalled economy and to support those at the frontline of the fight against COVID-19.

Most problematic, however, is the fact that the budget’s forecasts are predicated on the rollout of an effective vaccine against the virus by the end of next year.

Last year’s balanced budget has blown out to a $213 billion deficit this year, with net overall debt approaching $1 trillion. Having fallen by 7 per cent since the pandemic struck, Australia’s economic growth is expected to rise by 4.25 per cent by the end of 2021.

Unemployment is expected to peak at 8 per cent by the end of the year before falling to 6.5 per cent in 2022 and 5.5 per cent in 2024. This is considerably more optimistic than earlier forecasts.

Treasurer Josh Frydenberg is hoping to stimulate economic growth and, with it, employment, by means of tax cuts for low and middle income earners. Costing $17.4 billion, the measure will provide tax relief of up to $2745 for individuals, and $5490 for dual income families in this financial year.

In a further attempt to encourage Australians to spend their way out of recession, there will be two separate cash payments of $250 to pensioners, veterans and concession-card holders — one in November and the next in March 2021. This will cost $2.6 billion.

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Medicare-subsidised telehealth, including allied health services, was extended to 31 March 2021. Significantly, the Government is developing options for the permanent adoption of telehealth beyond the COVID-19 Pandemic.

Funding of $17.3 million over two years will enable the continued implementation of recommendations of the Medicare Benefits Schedule (MBS) Review Taskforce. OTA members would be aware that the outcomes of the various MBS reviews were scheduled to be released earlier this year, but have been delayed by the COVID-19 pandemic.

Funding of $133.6 billion over 5 years will support public hospitals under the 2020-25 National Health Reform Agreement, delivering a $33 billion increase compared with the previous 5 years.

$3.3 billion will be spent on the National Medical Stockpile to provide ongoing access to medicines, Personal Protective Equipment and medical supplies and equipment.

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Mental Health

Funding of $100.8 million over two years will provide up to 10 additional psychological therapy sessions each calendar year under the Better Access Initiative.

$47.3 million over two years will support Victorians experiencing mental illness and distress as a result of the COVID-19 Pandemic. The measures, many of which have already been announced by the Federal Government, include:

  • 15 new mental health clinics across 6 Primary Health Networks;
  • $7 million for Beyond Blue, Lifeline and Kids Helpline to manage increased demand for crisis support services;
  • $5 million for headspace to increase outreach services to young people; and
  • $5 million to support digital and telephone services for vulnerable populations.

$62.1 million over four years will improve access to mental health services. The measures, some of which have already received partial funding, include:

  • $45.7 million to expand the Individual Placement and Support Program to assist young people with mental illness to participate in the workforce;
  • $6.9 million to support digital mental health services including the Australian Government’s mental health gateway Head to Health;
  • $5.0 million to provide parents, guardians and carers with mental health and career information for students in the context of the COVID-19 pandemic;
  • $2.3 million to enhance the national headspace network by upgrading the Mount Barker service in South Australia to a full centre; and
  • $2.1 million for the Prevention Hub led by the Black Dog Institute and Everymind to continue to advance research that targets people at heightened risk of mental ill-health and suicide.

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Rural and Regional Health

Funding of $3.3 million over two years will enable a trial of new primary care models across western and southern New South Wales, providing local health services to rural communities. Each model will take a multidisciplinary approach to create coordinated networks of GPs, nurses, and other health providers to deliver local services.

$50.3 million over four years will fund an expansion of the Rural Health Multidisciplinary Training Program. Expansion of the program will involve:

  • Funding five projects to enhance aged care training;
  • Funding a new University Department of Rural Health (UDRH); and
  • Increasing training in five remote communities through existing UDRHs.

$125 million over four years will support the Rural, Regional and Remote Clinical Trial Enabling Infrastructure Program. The program aims to remove barriers to participating in clinical trials in rural, regional and remote Australia.

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Aboriginal and Torres Strait Islander Health

Last night’s Budget provides $4 billion in Indigenous health funding over the coming four years, including $975.5 million in 2020–21. COVID-19 response measures in the Budget continue work undertaken to protect Aboriginal and Torres Strait Islander people, and include funding to extend the 86 Point of Care testing sites in rural and remote areas, support to the National Aboriginal Community Controlled Health Organisation and enabling access to culturally safe assessment and testing across urban and regional areas, with Aboriginal and Torres Strait Islander community controlled health organisations operating 23 of the up to 150 GP-led Respiratory Clinics.

From 1 July 2020 the Government has also provided an additional $90 million to Aboriginal and Torres Strait Islander community controlled health organisations under a new funding model, which provides three-year funding agreements and annual indexation. The Government has also announced the investment of almost $35 million in 42 projects in areas such as ending avoidable Indigenous deafness, ending avoidable Indigenous blindness, and helping to 10 eradicate chronic kidney disease (including investment of $14.4 million provided through the first grant round of the Indigenous Health Research Fund).

A further $33 million is being provided through the Indigenous Australians’ Health Programme to expand Aboriginal and Torres Strait Islander primary health care services. In addition, work is under way to refresh the National Aboriginal and Torres Strait Islander Health Plan, and to develop a National Aboriginal and Torres Strait Islander Health Workforce Plan, both of which are being developed in partnership with Aboriginal and Torres Strait Islander representatives.

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Private Health Insurance (PHI)

$19.5 million over four years to improve access and affordability of private health insurance. Measures include:

  • Increasing the maximum age of dependents allowed under PHI policies from 24 to 31 years, and removing age limits for dependents with a disability; and
  • Expanding accessibility of home and community-based mental health and rehabilitation care through PHI. Formal consultation with the sector will begin in October 2020.

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Aged Care

Announcing additional expenditure of $408.5 million to improve the care and quality of the aged care system, the Government said this was in response to both the COVID-19 pandemic and urgent issues raised by the Royal Commission into Quality and Safety in Aged Care.

Aged care funding has increased from $13.3 billion in 2012–13 to $23.9 billion in 2020–21, and will rise to $24.5 billion in 2021–22, $25.9 billion in 2022–23 and $27.1 billion in 2023–24.

While trumpeting an additional 23,000 home care packages, at a cost of $1.6 billion, some aged care advocates noted this was over four years and would barely scratch the surface of a waiting list of approximately 100,000.

The new packages will start being released this year. The Government has now invested an additional $4.6 billion in more than 73,105 packages since the 2018–19 Budget. The Government has increased packages from 60,308 at 30 June 2013 to 155,625 at 30 June 2020 and an estimated 185,597 at 30 June 2021.

Building on COVID-19-specific support already provided, and its initial response to the recommendations of the Aged Care Royal Commission report on COVID-19, the Government has provided an additional $1.6 billion to support the aged care sector’s pandemic response.

The Budget addresses issues already identified by the Royal Commission. The misuse of chemical and physical restraints for people living with dementia will be targeted. More specialist counselling teams will be available to provide expert psychosocial services, including face-to-face and by video and telephone ($11.3 million).

A Serious Incident Response Scheme will provide nearly 70 extra staff to regulate the scheme, inspect services and provide safeguards for people in aged care. Providers will be held to account for managing and reporting incidents ($29.8 million).

A new national organisation, supported by up to 40 system co-ordinators, will connect young people to more age-appropriate facilities. This measure aims to reduce the number of people aged under 65 years in, or at risk of entering, residential aged care.  ($10.6 million).

The Budget funds the second stage in the implementation of the new Australian National Aged Care Classification system ($91.6 million). This aims to enable independent assessments to deliver more accurate funding to meet the care needs of residents.

The Government will continue the Business Improvement Fund and add funding capacity to provide grants to eligible residential aged care facilities that are experiencing financial difficulty ($35.6 million).

Funding of $10.3 million will support the Aged Care Workforce Council. This aims to build a workforce with the required skills, attitudes and flexibility to provide high quality consumer-focused care to older Australians, and increase recruitment and retention.

Funding of $25.5 million over four years will build on preliminary work to identify and evaluate options to assess, classify and fund the varied needs of older Australians and their carers, with one, simple, unified system. This measure funds further research and consultation with the sector, consumer representatives and peak bodies.

Funding of $11.3 million in 2020-21 will support carers of people experiencing behavioural and psychological symptoms of dementia through increased psycho-social support services across the health and aged care sectors. This commitment will also help reduce the inappropriate use of chemical restraints and enhance safer, effective non-pharmacological interventions for dementia care.

Aimed at supporting older Australians who cannot access the National Disability Insurance Scheme (NDIS), the Disability Support for Older Australians (DSOA) Program will replace the Commonwealth Continuity of Support (CoS) Programme on 1 July 2021. Older people with disability aged 65 years and over (50 years and over for Indigenous people) who are not eligible for the NDIS will be able to access DSOA’s specialist services. This funding will be more in line with the NDIS, and provide a more client-centred program ($125.3 million over four years).

The Greater Choice for At Home Palliative Care program will support access to end-of-life care for Australians, regardless of where they live, including in residential aged care facilities. Implementation of the program will be extended through 11 Primary Health Networks in rural, regional and metropolitan trial sites across Queensland, New South Wales, Victoria, Tasmania, South Australia and Western Australia. It is estimated between 80,000 and 140,000 people could benefit from palliative care each year ($3.6 million in 2020–21).

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Occupational therapists working with veterans have been disappointed yet again, with the Morrison Government failing to lift the rates paid to OTs by the Department of Veterans’ Affairs (DVA).

This is despite the fact that the number of OTs able to sustain DVA work has fallen sharply in Far North Queensland, which is home to a large number of veterans. Like their counterparts in the Northern Territory, these veterans must now seek occupational therapy at their nearest public hospital. They deserve better.

It should be a source of national shame that occupational therapists with longstanding clinical relationships with wounded, disabled and ageing veterans are having to cut these ties because DVA is unable or unwilling to pay them a living wage.

OTA will continue to advocate in this space and has recently been in touch with two government backbenchers on the issue.

Last night’s Budget provides $101.7 million over four years to boost mental health support for veterans. This includes:

  • $94.3 million over four years to improve mental health outcomes and ensure care for older veterans and their families, and to better support their transition to civilian life by increasing fees paid to mental health, social work and community nursing providers;
  • $2.4 million over four years to expand eligibility for the Coordinated Veterans’ Care program, which provides GP-led team-based care, to White Card holders with an accepted mental health condition; and
  • $5.0 million over four years to expand the 24/7 Open Arms – Veterans & Families Counselling (Open Arms), especially in regional and remote areas.

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There was nothing particularly surprising in last night’s Budget regarding the National Disability Insurance Scheme (NDIS). While funding of a further $3.9 billion sounds a lot, it is in line with forecast growth in a scheme that the Productivity Commission estimates will eventually cost around $22 billion per year.

In his media release yesterday, the Minister for the NDIS, the Hon. Stuart Robert MP, referred to “the most substantial package of reforms to the NDIS since its establishment” which includes implementation of the Government’s Response to the 2019 Independent Review of the NDIS Act (Tune Review) and the new NDIS Participant Service Guarantee. Significantly, the Minister made no mention of the highly controversial NDIS Independent Assessment model, which was announced on 28 August alongside the Government’s response to the Tune Review recommendations.

Indeed, the media release of 28 August can no longer be found on the Minister’s website.

The Government is also providing the NDIS Quality and Safeguards Commission with an additional $92.9 million over the next four years, to ensure it has the resources required to carry out its role in regulating NDIS providers. Occupational Therapy Australia, however, reiterates its strong belief that those NDIS providers registered by one arm of the Federal Government – the Australian Health Practitioner Regulation Agency (AHPRA) – should not be subjected to the trouble and expense of being registered by another arm of the Federal Government, the NDIS Quality and Safeguards Commission.

As part of a preventative care package, last night’s budget included funding of $44.9 million for the lifetime support of all recognised thalidomide survivors. The measure responds to the 11 recommendations of the Final Report from the Senate Inquiry into support for Australia’s thalidomide survivors.

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