Damon Mcknight
Australia's ageing population, rising dementia cases, and economic pressures have led to an increased demand for aged care services. The Australian Government funds and subsidises a range of aged care homes across the country, including government-funded, not-for-profit, and private providers. As of 30 June 2024, there were 638 residential care providers in Australia, offering a total of 223,691 operational places, with an occupancy rate of 88% through 2023-24.
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What You'll Learn
- Aged care homes are sometimes known as nursing homes or residential aged care facilities
- The Australian government funds the majority of aged care in Australia
- Most older Australians prefer to remain in their own homes as they age
- The number of providers in the aged care sector is shrinking
- Aged care services are more concentrated in metropolitan areas
Aged care homes are sometimes known as nursing homes or residential aged care facilities
Australia's population is ageing, with longer life expectancy and low fertility rates. In 2016, the national census showed that one in six Australians was aged over 65. By 2056, projections estimate that 8.7 million Australians (22% of the population) will be over 65, and by 2096, this number will rise to 12.8 million (25%). This ageing population has resulted in an increased demand for aged care services. In 2016, almost 250,000 people used residential care, home care, or transition care services, a 31% increase over the previous decade.
Aged care homes, also known as nursing homes or residential aged care facilities, are for older people who can no longer live independently and require assistance with daily tasks or healthcare. The Australian government funds or subsidises a range of aged care homes, ensuring that care and support services are accessible and affordable for those in need. The government also provides funding for approved aged care service providers, including organisations that manage aged care services and facilities.
At the end of June 2024, there were 223,691 operational places allocated to residential care services, with an occupancy rate of 88% throughout 2023-24. However, the public aged-care system is already under strain, with a shortage of places to meet the growing demand. The impact of COVID-19 has also been significant, with most residential aged care services experiencing outbreaks during 2023-24.
The majority of older Australians prefer to remain in their own homes as they age. The government provides funding to help subsidise the costs of in-home aged care services, allowing people to maintain their independence for as long as possible. There are four levels of care packages available to support individuals with basic, low, intermediate, and high care needs. However, for those who require more intensive care or nursing services, aged care homes can provide the necessary support and assistance with daily tasks and healthcare.
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The Australian government funds the majority of aged care in Australia
Australia's population is ageing, with longer life expectancy and low fertility rates. In 2016, one in six Australians was over 65, and by 2056, this number is projected to reach 22% of the population (8.7 million people). This ageing population has resulted in an increased demand for aged care services, with a 31% rise in the number of people using residential care, home care, or transition care services over the last decade.
The Australian government has a dedicated service called My Aged Care, which helps individuals find and access government-funded aged care services. There are four key steps to accessing these services: understanding what services are available, assessing eligibility, applying for services, and finding a provider. The government also provides funding to support aged care providers impacted by COVID-19, including initiatives like the Aged Care Outbreak Management Support Supplement and the Surge Workforce Program.
While the government funds the majority of aged care, there is an increasing presence of private business providers entering the market. As of December 2022, a five-star rating system was implemented to rate the quality of aged care facilities, with 9% rated as substandard. However, there is no official government channel regulating private aged-care providers and reporting on their service quality, including staffing levels, skills, and care quality.
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Most older Australians prefer to remain in their own homes as they age
Australia's ageing population poses a challenge in terms of delivering suitable housing and care. The nation is expected to have nearly 50% more people over the age of 55 by 2036, with a projected increase from around 6.4 million in 2016 to 9.4 million in 2036. By 2056, it is projected that there will be 8.7 million older Australians (22% of the population), and by 2096, this number is expected to reach 12.8 million (25% of the population).
The majority of older Australians prefer to remain in their own homes as they age. This is supported by a 2015 research paper by the Australian Government's Productivity Commission, which found that 83% of people over 60 surveyed preferred to continue living in their own homes, compared to 6% who preferred living in retirement villages and 1% in residential aged care facilities. Similarly, a 2018 study by McCrindle found that almost nine in ten Australians aged 50 and above (87%) would prefer to live out their days in their own homes. This preference for ageing in place is driven by the security and familiarity of one's home and community, as well as the desire to maintain independence for as long as possible.
To support this preference, the Australian Government offers funding for in-home care services through the Home Care Package program, which provides four levels of care packages to support people with basic, low, intermediate, and high care needs. These services can include equipment and aids to assist with day-to-day tasks, allowing older people to remain in their homes even if they require extra assistance. However, it is important to note that there is a lack of awareness among older Australians about the availability of government-funded in-home care services, with a third of respondents in the McCrindle study being unaware of this option.
Despite the preference to age in place, there are factors that can influence an older person's ability to remain in their own home. These include the appropriateness and quality of their home, such as its size and layout, and their financial capacity to modify their home to suit their changing functional requirements. Additionally, older Australians who rent may face challenges due to insecure tenures and the risk of homelessness, which can impact their health and wellbeing.
While most older Australians prefer to remain in their own homes, it is important to recognize that a significant number still require residential aged care services. As of 2024, there were 119,652 resident cases in aged care homes, with a staff of 53,282 people. The distribution of aged care services varies across Australia, with most services located in metropolitan areas, which can pose challenges for those in remote areas who may need to move to access higher-level care.
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The number of providers in the aged care sector is shrinking
Australia's ageing population has led to an increased demand for aged care services. In 2016, almost a quarter of a million people were using residential care, home care, or transition care services, marking a 31% increase over the last decade. Despite this growing demand, the number of providers in the aged care sector is shrinking. As of 30 June 2024, there were 855 home care providers and 638 residential care providers, representing a decrease of 0.7% and 3.0%, respectively, from the previous year.
This decline in providers can be attributed to several factors. One significant reason is market consolidation, as smaller providers exit the market due to increasing regulatory requirements and financial pressures. The aged care sector has also been facing challenges with staffing, struggling to attract and retain qualified, skilled, and experienced staff, particularly in regional, rural, and remote locations.
While the number of providers is decreasing, the overall number of operational places and residences per provider in the residential aged care market is growing. This expansion comes despite a drop in occupancy levels and lower demand for residential aged care. The decrease in demand for residential care can be partly explained by the preference of most older Australians to remain in their own homes as they age. According to the Housing Decisions of Older Australians research paper, 83% of people over 60 surveyed preferred to continue living in their homes, compared to 6% who preferred retirement villages and 1% in residential aged care.
To meet the diverse needs of the ageing population, Australia's aged care system offers a range of care types, from home support to full-time residential care. The majority of aged care in Australia is funded by the government, with individuals expected to contribute to the cost of their care if they can afford it. With the increasing demand for aged care services, the government has committed ongoing support to the aged care workforce, allocating significant funding over several years to meet the rising wage costs of aged care nurses.
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Aged care services are more concentrated in metropolitan areas
Australia's ageing population has resulted in an increased demand for aged care services. The Australian Government funds the majority of aged care services, but people are expected to contribute to their care costs if they can afford to. The availability of aged care services varies across the country, with most services located in metropolitan areas.
As of 30 June 2024, 66% of older Australians (aged 65 and over) lived in metropolitan areas, 9.5% in regional centres, 23% in rural towns, and only 1.5% in remote or very remote communities. This distribution of the population influences the concentration of aged care services, with 55% of home support outlets and over 60% of home care, residential care, transition care, and short-term restorative care services located in metropolitan areas.
The Modified Monash Model (MMM) is used to define the remoteness and population size of a location, ranging from MM 1 (metropolitan) to MM 7 (very remote). This model helps determine the distribution of aged care services and identifies areas with potential gaps in service provision.
The concentration of aged care services in metropolitan areas has implications for individuals in remote regions. Those in remote areas may need to relocate to access higher-level aged care services. Geographical disparities in access to aged care have been observed, with people in regional, rural, and remote areas experiencing reduced access to services compared to those in major cities.
Additionally, chronic skilled workforce shortages outside metropolitan areas contribute to long waitlists, further impacting the accessibility and quality of aged care services in remote regions. As Australia's population continues to age, addressing these disparities and ensuring equitable access to aged care services across the country will become increasingly important.
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Frequently asked questions
As of 30 June 2024, there were 223,691 operational places allocated to residential care services, with an occupancy rate of 88% through 2023–24. However, the number of aged care facilities is not specified.
There are various types of aged care services in Australia, including home support, home care, residential care, retirement villages, transition care, and short-term restorative care. Residential care can be permanent or respite (temporary).
The Australian Government funds or subsidises a range of aged care homes and services. Funding is provided to approved aged care service providers, and the amount is based on an assessment of the care needs and financial situation of the individual.
The COVID-19 pandemic has had a significant impact on aged care in Australia. During the 2021–22 financial year, most residential aged care homes experienced outbreaks, with over 56,000 resident cases and almost 2,200 resident deaths. The pandemic also led to social restrictions and lockdowns, which placed older people at greater risk of health problems, including anxiety and cognitive issues.
