A $1.6 billion boost to fund 23,000 home care packages is a “drop in the bucket” for what’s needed for the sector, a key interest group argues.

The measure was unveiled in Tuesday’s federal budget and will increase the total number of home care packages to 180,000.

Aged and Community Services Australia has welcomed the move but says more funding is needed to help set the sector for the next decade.

“It is only a drop in the bucket of what is required,” the group said.

“The home care injection is unprecedented and welcome. This is good bang for the buck, however, there will still be thousands of people waiting for the right level of support or any support at all.”

Labor’s aged care spokeswoman Julie Collins says the extra places won’t come close to meeting demand.

“There are over 100,000 waiting for care and impact of COVID-19 will only see more older Australians join the queue,” she said.

She’s dismayed that there’s no extra funding for residential aged care.

“Sadly 674 older Australians have tragically passed away from COVID-19 in aged care homes – how is this okay?”

The royal commission into the sector is due to provide its final report by February next year, and the government says it’s waiting for the recommendations before settling on further funding.

The probe’s interim report blasted the government’s preparedness for coronavirus in aged care homes, with Aged Care Minister Richard Colbeck announcing $40.6 million in an initial response.

Leading Age Services Australia is hopeful Tuesday’s budget measures are simply a starting point.

“We need to transform the aged care system so older Australians get the care they need, and the workers and organisations that care for them are enabled to deliver the best quality care and services possible,” LASA chief Sean Rooney said.

“Evidence to the royal commission has recently highlighted deep structural problems with funding for aged care.

“While this budget does not address all of these issues, it does lay a platform for the future.”

Aged pensioners will also get two $250 payments from the federal budget, with the first in December and the second from March next year.

It comes after the aged pension was put on hold for the first time in more than two decades because inflation has gone backwards due to the pandemic.