The Turnbull government has announced 14,000 new high-level home care packages for older Australians so people can stay in their own places for longer.
An extra 14,000 high-level home care places for older Australians to stay in their own homes has been seen as a start by aged care groups.
But Labor has dismissed the budget announcement, saying it won't address the crisis created under the government's watch.
The new packages will cost $1.6 billion over four years and come on top of an additional 6000 high-level places announced in December's mid-year budget update.
But there are currently 56,850 people on the waiting list for a high-level package and 25 per cent of them aren't receiving any interim care.
Overall, there are 105,000 people waiting for a package.
The Turnbull government in Tuesday's budget also funded 13,500 residential aged care places and 775 short term "restorative" places.
"Just because you are getting older does not mean you should have to surrender your dignity or your choice," Treasurer Scott Morrison said in his budget speech.
Mr Morrison says by 2021/22 more than 74,000 high-level home care places will be available.
A high-level care package provides a yearly subsidy of up to $50,000.
The government has also found more than $60 million to make the My Aged Care website easier to use.
Labor says the 14,000 packages over four years is a "cruel hoax" and wasn't enough to keep pace with demand.
"The waiting list grew by 20,000 in the last six months of 2017 alone," the party's ageing spokeswoman Julie Collins said.
"The government needs to apologise for over-promising, under-delivering and failing older Australians yet again."
After a string of scandals at some aged care facilities, there is also a new one-stop shop for complaints with the establishment of the Aged Care Quality and Safety Commission.
More than $80 million has been invested in mental health services for older Australians to combat depression and loneliness.
The Australian Medical Association welcomed the "necessary" funding for aged care.
"The investments in aged care and mental health must be seen as down-payments with more attention needed in coming years and decades as community demand drastically increases," president Michael Gannon said.
Aged and Community Services Australia chief executive Pat Sparrow said Tuesday's budget "demonstrated the government's commitment to aged care services".
She said the sector was pleased with the additional 14,000 home care packages and the smaller commitment to residential aged care.
Council on the Ageing chief executive Ian Yates was also pleased to see the funding for mental health support.
"We really really welcome this," he told reporters.
The Australian Nursing and Midwifery Federation was disappointed to see chronic low staffing levels not addressed in the budget.