Aged care advisory group's 186-page report urges price uplifts, asset threshold reform and bipartisan fix to bed shortage
The Ministerial Advisory Group on Aged Care has delivered a 186-page report titled "A place to grow old: Securing the future of aged care," making 40 recommendations including government committing to "significant price uplifts" and lowering the threshold at which people with assets must pay more towards their care.
The report, released on Monday, warns that without change there could be a shortage of more than 9000 residential aged care beds in just over a decade, at an additional cost to the government of nearly $600 million a year. The advisory group, chaired by former Labour Minister of Health David Cunliffe, described the system as built for a "different era" and under "sustained financial pressure" (RNZ).
"If we do nothing there will be a mountain of unmet need, alongside a much higher demand for hospital beds," the report states.
The group began its work in January 2026 and was expected to report back with recommendations by the middle of 2026, having been established to provide expert advice on long-term reform of the aged care system. It is accountable to and reports directly to the Minister of Health and the Associate Minister of Health with responsibility for aged care, and its terms of reference explicitly support a bipartisan approach to determining the changes required (Ministry of Health).
Associate Health Minister Casey Costello said in late 2024 there were "major political considerations" attached to any changes in the aged care system, and that the government appointed the advisory group because it wanted ideas for reform. Government reviews had already found the aged-care model out of date and in need of reform before the group was appointed (Beehive).
New Zealand's government spends more than $2.5 billion annually on aged care, covering both in-home care and aged residential care. The value of unpaid care provided in the system was separately estimated at $3.6 billion, based on hours of care reported by LiLACS NZ carers (RNZCGP).
The demographic pressures underpinning the report are stark. There are about 950,000 people aged 65 and over in New Zealand, with that number expected to reach about 1.3 million by 2040. In 1996 about one in 10 people were aged over 65; by the 2050s that is projected to be one in four.
The report also outlines "well recognised inequities" in aged care, stating that Māori, Pacific and Asian people are much less likely to be living in residential care in advanced old age. The advisory group's material describes care models that improve hospital flow, reduce delayed discharge, and support older people to remain connected to whānau and community.
The broader context here is that the Government Policy Statement on Health 2024–2027 sets out the government's priorities for the health system over a three-year horizon, meaning any response to the advisory group's recommendations will be weighed against existing fiscal and policy commitments. The report's call for "significant price uplifts" and a lowered asset threshold lands directly in the territory Costello flagged as carrying "major political considerations" — the asset test in particular touches home equity, superannuitant income and intergenerational transfer questions that no government has relished confronting.
For those working in the sector, the 9000-bed shortfall projection and the $600 million annual cost figure give a concrete scale to what has until now been discussed in general terms. The $3.6 billion unpaid-care estimate, drawn from LiLACS NZ data, further complicates the fiscal framing: any reform that professionalises or partially replaces unpaid care will shift costs onto the public ledger even as it improves equity and quality. The bipartisan framing in the group's terms of reference is not incidental either. Aged care funding reform has historically stalled at the boundary between means-testing philosophy and universal entitlement, and a group explicitly structured to bridge that divide signals awareness that recommendations requiring asset-test changes cannot survive a single electoral cycle without crossbench buy-in.
What remains untested is whether the government will adopt, modify or defer the 40 recommendations. The report has been delivered; the response has not.
