Damon Mcknight
Australia's population is ageing. The median age of Australians increased from 35 years in 2000 to 38 years in 2020. By 2047, around 25% of the population is projected to be aged 65 and over, up from 16% in 2020. This demographic shift is due to sustained low fertility, a falling birth rate, and increasing life expectancy. As a result, Australia must prepare for the social and economic impacts of an older population. This includes addressing age discrimination and negative attitudes towards older people, reforming aged care services, and adapting to a decline in labour utilisation. To fund the rising cost of healthcare for older Australians, discussions are underway regarding the implementation of private long-term care insurance or shifting more financial responsibility onto families.
| Characteristics | Values |
|---|---|
| Percentage of population over 65 by 2026 | 22% |
| Percentage increase in centenarians over the past two decades | 271% |
| Number of verified supercentenarians | 23 |
| Percentage of the homeless population over 65 | 7% |
| Median age of the Australian population in 2020 | 38 years |
| Percentage of the population under 15 years of age in 2020 | 18.6% |
| Percentage of the population projected to be over 65 by 2047 | 25% |
| Australia's rank in life expectancy worldwide | 3rd |
| Projected percentage of Australians over 85 by 2050 | 1.8 million |
| Projected health spending on older Australians by 2035 | AUD$270 billion |
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What You'll Learn
Aged care workforce
Australia is facing a rapidly ageing population, with the number of people aged 65 and above projected to increase from 14% of the population in 2013 to 21% in 2053. This demographic shift will have a significant impact on labour supply, economic output, infrastructure, and government budgets. In light of this, Australia is taking several steps to prepare for an older population, particularly in the area of aged care.
The Australian government is committed to strengthening the aged care workforce to ensure safe and high-quality care for older Australians. This includes addressing issues of neglect, abuse, workforce shortages, and funding, as highlighted by the Royal Commission on Quality and Safety in Aged Care.
To achieve this, the government is focusing on several key areas:
- Building the Workforce: Australia is working to expand and grow its aged care workforce to meet the increasing demand for aged care services. This includes initiatives like the Home Care Workforce Support Program, which aims to increase the number of home care workers.
- Upskilling and Training: The government is investing in upskilling the workforce through training and qualifications to improve the delivery of care. This includes transition to practice programs, clinical placements, and other learning opportunities for nurses and care workers.
- Fair Wages and Retention: The Fair Work Commission Aged Care Work Value Case has resulted in wage increases for aged care nurses and workers. This not only ensures that workers are valued for their skills and experience but also helps with retention and recruitment, ensuring a stable and skilled workforce.
- Supporting Providers: Australia is supporting aged care providers in developing workforce management and culture. This includes prioritising valued, productive, and skilled workers and providing resources and information to support workforce development.
- Data-driven Decisions: The government is investing in research and data collection to identify opportunities for continuous improvement in the aged care sector. This includes funding the National Centre for Monitoring Dementia (NCMD) and implementing the Aged Care Quality and Safety Commission to regulate and enforce standards of behaviour for providers and workers.
- Multidisciplinary Competencies: There is a focus on developing multidisciplinary core competencies for health and aged care workers. This involves fostering a shared approach to care with 66 competencies across 10 domains, aiming to improve the standard and coordination of person-centred care for older Australians from diverse backgrounds.
By addressing these areas, Australia aims to ensure a valued, skilled, and supported aged care workforce that can meet the needs and rights of its older population. These initiatives are crucial steps in preparing for the challenges posed by a rapidly ageing population.
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Funding models for aged care
Australia's population is ageing faster than ever before. By 2026, over 22% of Australians will be aged over 65, up from 16% in 2020 and just 8.3% in the 1970s. This demographic shift will reshape Australian society, communities, and workplaces, and it will also have a significant impact on national and household finances.
The Australian government has introduced various funding models to address the challenges posed by the country's ageing population, particularly in the area of aged care. Here are some key aspects of these funding models:
Australian National Aged Care Classification (AN-ACC)
The AN-ACC is a significant aged care reform introduced in October 2022. It aims to help aged care providers better meet the costs of delivering care to residents by changing the way they receive funding. The AN-ACC is based on an assessment of each individual's care needs, which determines their AN-ACC class. This class then decides the funding allocation for the aged care home. The AN-ACC also provides a special path for those requiring palliative care, ensuring they can access care without needing an assessment if they meet the eligibility requirements.
Government Subsidies and Supplements
The Australian government provides subsidies and supplements to approved aged care service providers. People receiving government-subsidised aged care may also contribute to the cost through fees and charges if they can afford to. Supplements are provided to meet specific care needs for eligible recipients, and these amounts are included in subsidy payments and some program funding grants.
Capital Grants and Aged Care Programs
The government also provides funding through capital grants and aged care programs. These grants and programs aim to support aged care providers in delivering care to older Australians.
Private Organisations and Residential Care
Some aged care facilities are run by private organisations, and their funding models can vary. Some may prioritise profits over residents' needs, while others may be run by individuals without a comprehensive understanding of the ageing population's needs. However, there are also private organisations that do not have a health background but still provide quality care.
Public Aged Care Insurance
There is ongoing debate about the potential for public aged care insurance in Australia, which could function similarly to superannuation, with workers contributing a portion of their pay to accumulate funds for use in older age.
Cultural Shifts and Family Responsibility
Another aspect of funding models is the cultural shift towards greater family responsibility. In countries like Singapore and France, the children and wider families of older individuals bear a significant responsibility for contributing to the costs of care. This approach taps into discussions about fairness and the responsibility Australians have for their families, as well as how they should contribute to their own aged care.
As Australia continues to confront the challenges of an ageing population, sustained public support, cross-department collaboration, and a shift in societal perceptions of ageing will be crucial to achieving effective reform and ensuring adequate funding for aged care.
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Intergenerational fairness
Australia is facing a rapidly ageing population, with the number of centenarians projected to increase from one for every 100 babies in 2012 to 25 for every 100 babies by 2060. This demographic shift will have significant implications for the country's economy, society, and government policies.
The issue of intergenerational fairness has come to the forefront as Australia grapples with the challenges posed by its ageing population. The 2021 Intergenerational Report highlighted the strain on younger generations, who will bear the burden of vast debt levels and a less productive economy, while also being responsible for funding the increasing aged-care costs of the sizeable post-war cohort.
To address these concerns, the Australian government has taken several steps. In 2023, the Labor Albanese Government established the Aged Care Taskforce, which included representatives from across the aged care sector as well as a young economist to advocate for the interests of younger generations. The Taskforce's recommendations led to a revamped system of funding for aged care, rejecting a proposed income tax levy and instead suggesting that older Australians with financial wealth contribute more towards the cost of their care.
Additionally, the Australian government has adopted strategies to make aged care more affordable over the long term. The state pension is heavily means-tested, taking into account both income and assets when calculating benefits. This approach ensures that those with the means contribute fairly, while also providing support to those who need it.
However, there are concerns that the current system unfairly burdens younger workers. Australia's spending on aged care as a percentage of GDP is relatively low compared to other high-income countries, and funding improvements could place an additional tax burden on younger generations. There is also a recognition that the wealth accumulated by older generations has come at the expense of younger Australians, particularly in the housing market, making it difficult for younger people to achieve milestones like homeownership.
To ensure intergenerational fairness, Australia needs to continue developing policies that address the challenges of an ageing population. This includes finding sustainable ways to fund aged care, encouraging older Australians to remain economically active, and promoting policies that support younger generations in achieving financial stability. By addressing these issues, Australia can strive for a just distribution of resources between generations and create a more secure future for all its citizens.
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Rural aged care
Australia's rural aged care system is facing several challenges, including a lack of access to services, funding issues, and workforce shortages.
Firstly, older Australians in rural and remote areas face difficulties in accessing aged care services due to geographical disparities and inequities. The Royal Flying Doctor Service has highlighted that people in these regions have significantly less access to aged care compared to those in major cities. There is a growing number of services and providers in rural areas, but the availability of aged care is still poor and worsening, according to the royal commission's report.
Secondly, funding is a critical issue. The government has implemented temporary measures such as COVID-19 funding injections, but rural and remote nursing homes continue to struggle financially, with many losing money. The federal government's aged care data does not provide transparency on how funding is allocated, making it challenging to assess the viability of rural nursing homes separately from city homes.
Thirdly, there is a shortage of aged care workers in rural areas, contributing to the strain on the sector. The aged care workforce is undervalued, and the skills required for aged care nursing are often not recognised as highly as other nursing specialties, making it challenging to attract people to the sector.
To address these challenges, the Australian government has introduced various programs and services to support older people in rural and remote areas. These include primary health services, extra health services such as mental health and social workers, podiatrists, physiotherapists, and dietitians, and supplements and limited capital grants for aged care homes in these regions. Additionally, Multi-Purpose Services (MPS) provide combined health and aged care services for small communities where operating separate facilities would not be viable.
While Australia's rural aged care system faces significant challenges, there are ongoing efforts to improve access, funding, and workforce availability to better support the ageing population in these regions.
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Negative attitudes towards older people
The Australian media has been criticised for perpetuating ageist values and negative stereotypes about older people. Reports often depict older individuals as a burden or an economic problem, dependent on taxpayers, and this negative tone seeps into societal attitudes. Younger Australians, in particular, tend to associate ageing with loss—of health, income, and mental capacity. This is reflected in their behaviours; younger people are more likely to tell jokes about older individuals and display negative behaviours towards them. They also tend to hold negative beliefs about older employees in the workplace, considering them to be at higher risk of redundancy and less likely to be promoted or adaptable to change.
These negative attitudes have real-world consequences. More than one in four older Australians live in poverty, and people aged 65 and over make up 7% of the homeless population. Older Aboriginal and Torres Strait Islander people experience poorer health and higher rates of disability than other Australians their age. They are also almost three times more likely to need help with self-care, mobility, or communication.
To address these issues, Australia needs a shift in its perception of ageing and the value it places on aged care workers. Associate Professor Natascha Klocker suggests that immigration can help address the challenges of an ageing population, but only if Australia creates a workforce that wants to enter the aged care sector. Aged care nurses deal with a multitude of complex health issues, and their skills are currently undervalued. By valuing these professionals and focusing on interventions to help people age well, Australia can better prepare for its older population.
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Frequently asked questions
Australia's population is ageing due to sustained low fertility and increasing life expectancy. The median age of the Australian population has increased from 35 years in 2000 to 38 years in 2020. By 2026, more than 22% of Australians will be aged over 65, up from 16% in 2020.
There are concerns that Australia could be ill-equipped to deal with an older population, particularly in terms of healthcare and aged care services. The rising number of older Australians is projected to increase the country's health spending to more than AUD$270 billion by 2035. There is also a lack of support for aged care workers, resulting in staffing shortages and potential issues with the quality of care.
To better prepare for an older population, Australia needs to address issues such as funding models for aged care, intergenerational fairness in taxation, and negative attitudes towards older people. Immigration can also contribute to population growth, but the main focus should be on adapting to the changing demographics and improving the quality of life for older Australians.
