Residential care trends in 2026  

It’s been a period of rapid change for the aged care sector. Providers spent 2025 adjusting their operations to ensure they met the standards laid out in the New Aged Care Act.  

As we move further into 2026, the focus on care delivery efficiency is intensifying, especially as providers work to balance staffing shortages with these new care requirements. 

Like home care, the sector has been heavily focused on compliance. Now, as we shift towards continuous improvement, the focus will move to fine-tuning systems, integrating workflows, and using more AI-powered technology.  

To get a clearer picture of the current landscape and what’s ahead, we spoke to AlayaCare’s Managing Director ANZ, Annette Hili, and Arif Mohamed, Vice President of Residential Care. 

1. The New Aged Care Act will keep redefining care  

The New Aged Care Act came into force last November and is continuing to reshape how care is delivered. With new systems in place, organisations are being tested on their ability to meet the Act’s requirements. 

“We’ve seen organisations implement new policies and processes, like whistleblowing, but many of these haven’t been fully tested yet. In 2026, these workflows are starting to be stress-tested, and we’ll see improvements as a result,” says Annette. 

“This year will be all about improvement,” says Arif. “For example, organisations that introduced digital care planning tools may now need to refine how these tools integrate with other systems, such as medication management or incident reporting, to ensure real-time updates and smoother communication across care functions.” 

As organisations adapt and refine their systems in response to the Act’s new demands, 2026 is proving to be a year of continuous improvement, with a focus on efficiency, integration, and ensuring compliance across every aspect of care. 

2. More focus on AI-powered care 

AI is reshaping industries, and residential care is no exception. While the full impact is still evolving, AI is already transforming key aspects such as note summaries, fall prediction, and more. These applications will continue to grow throughout 2026. 

“Last year, I predicted that more providers would adopt AI, and while we’ve seen some uptake and testing, the focus on the New Aged Care Act delayed a wholesale transformation,” says Annette. “This year, however, organisations will start to map out where AI can best support their operations, with pilot programs to refine workflows.” 

McKinsey reports AI-human partnerships will become the new norm, with up to half of current work hours potentially automated by AI. In residential care, this means AI will handle more repetitive tasks, allowing care staff to focus on providing more personalised, hands-on care.  

Despite this shift, over 70% of the skills employers seek today are relevant to both automatable and non-automatable tasks, meaning human expertise will remain crucial in delivering quality care. 

“It’s an exciting time,” says Arif. “AI isn’t here to replace humans, but to provide tools and data that help caregivers work more efficiently, save time, and ultimately deliver better care.” 

3. Data security is still a focal point  

Last year, we predicted a strong focus on data and security, and that remains true in 2026.  

The aged care sector is an increasingly attractive target for cyberattacks. In 2024, over 70% of reported cyberattacks on healthcare in Australia affected frontline services, including aged care, fertility clinics, and specialist practices. Additionally, healthcare has one of the lowest cyber maturity ratings of any industry, according to the 2023-2030 Australian Cyber Security Strategy. 

Older, unsupported systems are especially vulnerable. The key to staying secure is understanding what technology you’re using, recognising the risks, and having a plan to mitigate them. 

“The New Aged Care Act has pushed organisations to update workflows and implement new technology to meet compliance,” says Annette. “Many of these changes were made quickly, but now organisations will need to fully understand their technology landscape, identify gaps, and assess risks.” 

“The rise of AI brings new cybersecurity challenges,” says Arif. “Human error is still a major cause of breaches, so organisations will keep focusing on raising cyber awareness and training teams to tackle emerging risks.”  

4. Consolidation will drive demand for single‑platform software 

As residential aged care providers navigate tighter margins and increased regulatory pressure, we’re also seeing consolidation accelerate, with more organisations merging or acquiring additional facilities.  

Rather than stitching together multiple legacy systems, these larger groups are looking for a single, powerful software partner that can give them a unified view of residents, workforce, and financial performance across all homes. The providers that thrive will be those who standardise on one scalable platform that can manage complexity behind the scenes while enabling consistent, high-quality, person‑centred care at every site. 

There’s a significant opportunity to integrate existing platforms to immediately improve workflows. “Many providers are still manually managing wound care, for example,” says Arif. “AlayaCare’s integration with Pixalere automates this process. Nurses can take a picture of a wound, update the data, and have it flow directly into AlayaCare. Nothing is missed. In 2026, we’ll see more providers move toward these integrated workflows.” 

5. Tackling workforce challenges with technology  

The residential aged care sector continues to face significant challenges with staff recruitment and retention. These issues remain a top priority as providers look for ways to address workforce shortages. 

Technology is helping optimise staffing and reduce administrative burdens, allowing staff to focus more on high-value tasks, rather than time-consuming paperwork. 

As mentioned earlier, we’ll see more AI-human partnerships in action, helping to streamline operations and improve staff experiences day-to-day by reducing repetitive tasks. 

“Recruitment and retention are a major focus for most providers,” says Annette. “The workforce has faced ongoing challenges, but we’re starting to see more targeted strategies aimed at improving staff engagement, training, and development. Organisations are now looking at how they can make roles more sustainable, rewarding, and attractive to potential workers.” 

Arif adds, “As the sector moves towards more tech-driven solutions, the goal is to lighten the load on staff, especially those in direct care roles. By automating administrative tasks, we can make care workers’ days more manageable, allowing them to focus on what really matters – delivering quality care.” 

Welcoming the new era of aged care  

As the aged care sector continues to adapt to new regulations, workforce challenges, and technological advancements, 2026 is already showing itself to be a year of transformation.  

By embracing AI, improving workforce strategies, and focusing on system integration, providers can enhance care delivery and operational efficiency.  

With continuous improvement at the forefront, the sector is positioning itself for better outcomes, ensuring that quality care remains the priority for all residents.