Govt Launches Major Aged Care Reform with New Advisory Group for Sustainable Future

Associate Health Minister Casey Costello and Health Minister Simeon Brown jointly revealed plans to establish a Ministerial Advisory Group tasked with recommending an updated funding model and system-wide improvements.

In a decisive move to address the growing challenges of New Zealand’s ageing population, the Government has announced an integrated reform of the aged care system — a transformation aimed at delivering long-term sustainability, fairness, and accessibility. Associate Health Minister Casey Costello and Health Minister Simeon Brown jointly revealed plans to establish a Ministerial Advisory Group tasked with recommending an updated funding model and system-wide improvements.

According to Minister Costello, the reform marks a turning point for nearly 900,000 New Zealanders aged over 65. “Improving the lives of older people is a priority for the coalition Government,” she said. “Our goal is to build a modern system that ensures better health outcomes, seamless transitions between care options, and equitable access across the country.”

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Outdated Model, Modern Solutions

New Zealand’s current aged care system, though praised for its quality of service, is under strain from outdated funding mechanisms and fragmented structures. The Government acknowledged that incremental, piecemeal fixes are no longer sufficient.

“The system must recognise the link between aged care, health, and disability services,” Costello said. “We need a structure that adapts to future demographic pressures, allows older New Zealanders to stay at home where possible, and transitions them smoothly through different levels of care when needed.”

The reform builds upon earlier reviews initiated by the previous government and aligns with a select committee inquiry into aged care, signalling bipartisan momentum for systemic change.

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Ministerial Advisory Group: Mandate and Focus

The newly established Ministerial Advisory Group will play a central role in defining the reform roadmap. It will prepare an independent report and set of recommendations addressing three critical areas:

1. A Sustainable Funding Model — to ensure the continued availability and financial stability of aged care services, particularly the supply of standard care beds.

2. Equitable Cost-Sharing — evaluating how the costs of providing aged care can be fairly distributed between individuals and the Government.

3. Integration and Cohesion — developing frameworks for better coordination between aged care, health, and disability support services.

Minister Brown emphasized that the group’s recommendations will be delivered by mid-2026, with reforms to be implemented in 2027. “Ensuring a sustainable supply of aged care beds is vital to guaranteeing every New Zealander receives the care they need as they age,” he said.

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Investment and Interim Support

While the long-term reform work progresses, the Government continues to bolster immediate sector sustainability through targeted funding. Over the past two years, an additional $270 million has been allocated to ease operational pressures, improve staffing capacity, and enhance service delivery.

“These increases are designed to stabilise the sector while we pursue the broader changes required,” Brown stated. “They’re a bridge to a system that is financially secure, equitable, and capable of delivering quality care for generations to come.”

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Towards a Bipartisan and People-Centred Approach

The Government reiterated its commitment to bipartisan collaboration, a condition embedded in the National–NZ First Coalition Agreement, recognising that aged care reform demands political stability and continuity.

Minister Costello added that the advisory group’s independence will be key to depoliticising the process. “These are significant policy questions with major political implications,” she said. “An impartial expert group ensures recommendations are based on evidence and best practice, rather than short-term political considerations.”

She also praised the innovation already evident in various parts of the sector. “Many providers are leading with creative, person-centred care models. Scaling up these good practices nationally will be one of the most effective ways to raise standards across the board.”

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A Future Vision for Ageing Well

At the heart of the reform lies a vision for an age-friendly New Zealand — one where care is flexible, accessible, and respectful of individual preferences. The Government aims to create a system that prioritises independence, with stronger home-based support and better transitions between care levels.

“Most people want to stay in their homes for as long as possible,” Costello said. “Our system must evolve to make that feasible, ensuring that when higher levels of care are required, they can be accessed seamlessly.”