Aged care providers caught making false claims will face hefty fines under a federal government crackdown set to save the budget millions.
Providers could face fines of $10,800 per offence if found making multiple and deliberate false claims under the government's $10.6 billion Aged Care Funding Instrument.
The program subsidises providers to deliver services for residents based on their level of need.
Aged Care Minister Sussan Ley says the program unexpectedly cost an extra $150 million last year, while an audit revealed one-in-eight of 20,000 claims were deemed incorrect or false.
That figure has jumped to one-in-seven in 2015/16.
Ms Ley said the crackdown, including fines, stronger auditing, better education for providers and targeted funding, aimed to protect the integrity of the sector.
"Unfortunately we've seen a concerning number of incorrect claims and unaccounted-for growth in spending in complex health care creeping into the system in recent years," she said on Wednesday.
"This measure is designed to nip any non-compliance or sharp practices in the bud before they become a major problem."
The government's mid-year budget update on Tuesday announced savings of more than half-a-billion dollars from changes to aged care funding, including a $62 million saving from reducing incorrect or false claims.
Ms Ley said $472 million would be saved by placing better targeted funding, including reductions in subsidy prices, on some high-value claims from July 1.
"This measure will ensure the highest levels of funding go to the residents with the highest needs."
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