Budget 2026: Malaysia’s Aging Crisis Has a Framework But No Funding

On Friday, October 10, Prime Minister Anwar Ibrahim stood before Parliament to table Budget 2026. The next morning, I sat at the Selangor International Care Summit at KLCC, listening to Deputy Minister of Finance YB Puan Lim Hui Ying deliver her keynote: “Future Proofing Malaysia: Financing Care as a Strategic Growth Pillar.”

The timing wasn’t lost on anyone in the room. Budget 2026 had just announced the National Ageing Framework 2025-2045—Malaysia’s first comprehensive 20-year aging strategy, set to be officially launched at November’s ASEAN-level conference. And here we were, 300 care economy experts, government officials, and private operators, discussing the very question Budget 2026 should have answered: Who actually pays for long-term care?

After three days of summit discussions and poring over Budget 2026’s details, I returned to Melaka with a troubling realization. For the first time in our history, Malaysia has aligned its aging policy across federal plans, national budgets, and state initiatives. The frameworks are impressive. The vision is clear.

But the funding? It’s nowhere near adequate.

An Unprecedented Convergence—Almost

Three things happened in 2025 that have never happened before:

RMK13 (our 13th Malaysia Plan, launched in July) puts long-term care front and center as a national development priority. It’s no longer buried under “social welfare.” It’s recognized as infrastructure, as workforce development, as economic planning.

Budget 2026 announces the National Ageing Framework 2025-2045—a full 20-year strategy with RM1.26 billion allocated for elderly welfare benefiting 180,000 senior citizens. That sounds substantial until you do the math.

Selangor’s Care Economy Policy 2024-2030 provides an actual implementation blueprint with 39 specific action plans. Other states are watching. If it works in Selangor, the model could scale nationwide.

This alignment is genuinely historic. But I can’t shake the feeling that we’re building a beautiful house on a foundation that won’t support its weight.

The Capacity Crisis Nobody’s Addressing

Here’s what keeps me up at night. According to the Ministry of Health’s latest data (updated October 2, 2025), Malaysia has exactly 18 licensed nursing homes with a combined 689 beds.

Let me put that in perspective. Malaysia had approximately 2.4 million people aged 65 and older in 2023. That number is growing rapidly. International benchmarks suggest 10-15% of elderly populations will eventually need institutional care. Even at the conservative end—10%—we’re looking at 240,000 elderly Malaysians who will need nursing home beds.

We have 689.

The facilities range dramatically in size, from small operations with fewer than 10 beds to larger facilities exceeding 100 beds, and mean at 38 beds per facility. BIGTREE Medicare exemplifies this growth trajectory—we began operations in July 2024 with 48 licensed beds and secured MOH approval in October 2025 to expand to our full licensed capacity of 106 beds. This expansion positions BIGTREE Medicare as one of the larger MOH-licensed facilities, representing approximately 15% of Malaysia’s total licensed nursing home capacity.

But here’s what really concerns me: these 18 facilities represent the highest standard of care in Malaysia—MOH-licensed nursing homes that meet stringent healthcare requirements. There are hundreds more elderly care centers registered with JKM (Jabatan Kebajikan Masyarakat) operating under different, less stringent standards. And industry estimates suggest 700-1,000 unregistered facilities operate with virtually no oversight.

THE CAPACITY GAP: 689 MOH-licensed beds for 240,000 projected elderly needing institutional care. Budget 2026 allocates RM0 for capacity expansion.

Budget 2026 allocates zero ringgit for expanding MOH-licensed capacity.

When Retirement Savings Meet Reality

The summit’s “Who Pays for Care?” panel was sobering. Speakers from the financial sector laid out data most Malaysians don’t want to confront:

• Only 36% of EPF members reach the RM240,000 basic savings target by age 55
• 58% of people turning 54 have less than RM100,000 saved
• Many approaching retirement have savings that won’t cover even basic living expenses, much less healthcare costs

Professional nursing home care—with 24/7 skilled nursing, rehabilitation services, proper medical oversight—costs several thousand ringgit monthly. The exact amount varies by care level and accommodation type, but you’re looking at annual costs that can easily exceed RM50,000.

Do the math on EPF coverage:

• RM240,000 in savings? That’s roughly 4-5 years of quality care
• RM100,000? Less than two years
• Below that? Months, not years

And that assumes families spend their entire EPF on elderly care—leaving nothing for the spouse’s living expenses, emergencies, other medical costs, or any legacy for children.

THE EPF REALITY: RM100,000 in retirement savings covers less than 2 years of professional nursing home care. Budget 2026 offers middle-income families zero subsidies when savings run out.

Yet Budget 2026 proposes no subsidies for nursing home care. The existing RM500 monthly assistance for elderly citizens covers about 10-15% of actual costs. Middle-income families—the ones who saved RM100,000-200,000 but don’t qualify for poverty assistance—have no safety net when those savings run out.

What Other Countries Figured Out Decades Ago

The panel discussion brought in international perspectives, and honestly, it was embarrassing. Not because Malaysia is behind—we are, but that’s fixable. Embarrassing because the solutions have been proven for 20-30 years, yet we’re still “studying” them.

Japan launched mandatory long-term care insurance in 2000. Workers and their employers pay premiums. The government subsidizes low-income participants. Today the system serves over 5 million people.

Germany implemented their model in 1995—30 years ago. Workers pay 3-4% of salary, split with employers. The system generates sustainable revenue and provides tiered benefits based on care needs.

Singapore launched CareShield Life in 2020. Everyone is automatically enrolled at age 30, paying premiums that fund lifetime payouts when they need long-term care.

The question isn’t whether these systems work. A quarter-century of evidence says they do. The question is whether Malaysia has the political will to implement something similar.

TIME IS RUNNING OUT: Implementing mandatory long-term care insurance takes 5-10 years. Malaysia becomes an aged nation in 18 years. We should have started yesterday.

According to the panel experts, we don’t have much time. Implementing mandatory long-term care insurance takes 5-10 years from policy decision to full operation. Malaysia becomes an “aged nation” (14% elderly) by 2043—just 18 years from now.

We should have started yesterday.

The PAHFAS Situation Is Inexcusable

I need to address something that frustrated every private operator at the summit: PAHFAS still isn’t implemented.

The Private Aged Healthcare Facilities and Services Act 2018 received royal assent on March 28, 2018—over seven years ago. This Act was designed to regulate and professionalize Malaysia’s elderly care sector, particularly the hundreds of JKM-registered centers and unregistered facilities serving the majority of our institutionalized elderly.

Seven years later, nothing. No implementation date. No transition support. No timeline.

This creates a bizarre situation. The 18 MOH-licensed facilities already operate under the strictest healthcare standards—we have qualified nurses, proper medical protocols, emergency systems, everything PAHFAS would require and more. We’re not the problem.

The problem is the fragmented landscape of varying-quality facilities operating under inconsistent standards. Some are excellent. Some are adequate. Some… well, families can’t easily tell the difference because there’s no unified regulatory framework.

⚠️ SEVEN YEARS AND COUNTING: PAHFAS received royal assent in March 2018. It’s still not implemented. If Malaysia is serious about quality care, enforce PAHFAS now.

Every private operator I spoke with at the summit supports PAHFAS implementation. Yes, it will require some facilities to upgrade significantly. Yes, some may need to close if they can’t meet standards. That’s exactly what regulation is supposed to achieve—protecting vulnerable elderly Malaysians.

If the government is serious about professionalizing the care economy, implement PAHFAS now. Seven years is beyond sufficient for consultation and preparation.

What Budget 2026 Actually Delivered

Let me be fair about what Budget 2026 got right:

The National Ageing Framework 2025-2045 itself is solid policy work. It’s comprehensive, it’s long-term, it acknowledges the scale of what’s coming.

The recognition of care as a professional occupation—not just informal family responsibility—is significant. The RM5 million for TVET caregiver training signals that the government understands workforce development matters.

Tax reliefs for families caring for elderly parents provide some financial breathing room.

But here’s what’s missing:

That RM1.26 billion for 180,000 elderly works out to RM7,000 per person annually—about RM580 monthly. That doesn’t cover basic living expenses, let alone professional healthcare.

The National Dementia Action Plan launched in 2024? Zero dedicated funding in Budget 2026.

The Action Plan for Health Services for Older Persons, also launched in 2024? Zero dedicated funding.

Subsidies for nursing home care? Zero.

Infrastructure expansion to address the massive capacity gap? Zero.

PAHFAS implementation timeline and support funding? Zero.

Roadmap for mandatory long-term care insurance? Zero.

THE VERDICT: Budget 2026 is a policy framework without financial commitment. We have impressive 20-year strategies and zero execution funding.

Budget 2026 is a policy framework without financial commitment. We have the vision. We lack the funding to execute it.

The Window Is Closing

Malaysia has 18 years until we’re officially an “aged nation.” By 2056, we’ll be “super-aged”—20% of our population over 60. These aren’t predictions subject to change. They’re demographic certainties based on people already born.

We face a choice between two paths:

Path One is what we’re currently doing: incremental budget increases, more studies, more frameworks, more pilot programs. We hope private charity and family sacrifice will fill the gaps. We watch as hospitals admit elderly patients for social reasons because there’s nowhere else for them to go. We see middle-class families impoverished by care costs.

Path Two requires political courage: implement mandatory long-term care insurance within 24 months, enforce PAHFAS immediately, invest billions in infrastructure expansion, professionalize caregiving as a respected career with proper compensation.

THE CHOICE: We’re choosing Path One (incrementalism) while claiming we’re on Path Two (transformation). The policy language suggests transformation. The budget allocation suggests incrementalism.

After analyzing Budget 2026 and spending three days at the Care Summit, I believe we’re choosing Path One while claiming we’re on Path Two.

The policy language suggests transformation. The budget allocation suggests incrementalism.

That won’t end well.

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Denis Lim is Managing Director of BIGTREE Medicare & Nursing Home, one of 18 Ministry of Health-licensed nursing homes in Malaysia. BIGTREE Medicare operates in Melaka with expansion plans aligned with Malaysia’s growing eldercare needs. For more information, visit www.bigtree.care.