October 2026

Australia’s aged care algorithm scandal has reached a new level, with the Commonwealth Ombudsman delivering a damning assessment of a system which is unfair, unreasonable, legally flawed and lacking fundamental safeguards.

This is another example of bureaucratic incompetence, with vulnerable elderly Australians paying the price.

We have previously highlighted the failures of the Federal Government’s aged care funding algorithm, which determines how much financial support older Australians receive to remain living in their homes.

It has resulted in elderly people who qualify for care funding, being denied that funding. There are also widespread reports of waiting times of up to 12 months for people, who have received funding approval, actually receiving that funding and the care to which they are entitled. Many have died while waiting for the care they needed.

We have also highlighted the incompetence of the Federal Minister for Aged Care and Seniors, Sam Rae.

Now we have official confirmation that this system is seriously defective and that the people who designed and implemented it have questions to answer.

In a report released on 26 October, Commonwealth Ombudsman Iain Anderson has delivered a highly critical assessment of the Department of Health, Disability and Ageing.

Anderson found that the department introduced the algorithm without meaningful risk assessment, evaluation or analysis, despite the obvious dangers of automated decision-making.

Even more astonishingly, the bureaucrats responsible apparently failed to understand the legislation governing their own system.

Anderson declared: “The department did not, and may still not, understand key components of the legal framework it created, nor did it understand what legal framework it was meant to create.”

This is beyond incompetence. The consequences, for many elderly Australians, have been fatal.

The algorithm was introduced in November 2025 as part of what the Albanese Government described as once-in-a-generation aged care reforms.

It determines funding allocations for older Australians who need assistance with everyday living.

But the system has produced outcomes which experienced health professionals consider clinically inappropriate, without allowing those professionals to correct the decisions.

That’s right. A computer algorithm makes the decision, and qualified human assessors cannot override it, even when they know it’s wrong.

The Ombudsman’s 104-page investigation found the system operates as a technological black box, with inadequate public information explaining how decisions are reached.

The investigation also found that transparency recommendations arising from the notorious Robodebt Royal Commission had been ignored.

Apparently, the politicians and the bureaucrats learnt nothing from that expensive disaster.

The Ombudsman found the department had incorrectly advised assessors that algorithm decisions could be overridden, when the legislation provided no such mechanism.

There had been no meaningful public consultation on the final system, and no independent validation of the modified algorithm that was introduced.

The department also failed to adequately verify whether assessors held mandatory clinical qualifications.

Is it possible to imagine a more comprehensive catalogue of administrative failure?

The consequences are not theoretical.

As reported by Phoebe Loomes in The Senior on 26 October, hundreds of elderly Australians have complained about inadequate funding assessments, leaving them struggling to meet basic daily needs.

One family resorted to crowdfunding after being told their mother, suffering terminal motor neurone disease, would wait eight months for funding.

Appeals against assessment decisions have increased more than fivefold.

Now, the Ombudsman has made 10 recommendations, including restoring human oversight, reviewing the legislation and conducting meaningful consultation.

Yet the department and the Government have merely noted, rather than accepted, the crucial recommendations concerning human overrides.

Instead, the Government has introduced a limited escalation pathway for exceptional cases.

Anderson has also recommended that the Australian National Audit Office examine whether public resources were used efficiently, economically and ethically.

This scandal exposes a familiar mentality within government bureaucracy: devise a complicated system without consultation with those affected, impose it on the public, ignore warnings from experienced professionals and defend it when the failures become obvious.

Meanwhile, elderly Australians and their families suffer.

The fundamental problem is that bureaucratic processes have been given priority over human needs.

Aged care should be about caring for people, not forcing vulnerable Australians to accept decisions from an unaccountable computer program.

The Ombudsman’s findings should be a massive embarrassment to the Federal Government.

But embarrassment isn’t enough.

There must be accountability for the officials responsible, and urgent changes to protect elderly Australians.

After Robodebt, our politicians and bureaucrats should have known better.

Apparently, they didn’t.