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Social Policy Section
This quick guide has since been updated with a version published on 5 June 2019.
The aged care system caters for Australians aged 65 and over
(and Indigenous Australians aged 50 and over) who can no longer live without
support in their own home. Care is provided in people’s homes, in the community
and in residential aged care facilities (nursing homes) by a wide variety of
providers. The Australian Government is the primary funder and regulator of the
government expenditure on aged care services was around $15.8 billion in
2014–15, with the Australian Government providing approximately 95 per cent of
this funding. The Aged
Care Act 1997 (the Act) and associated Aged
Care Principles set out the legislative framework for the funding and
regulation of aged care, although services are also provided through
contractual arrangements outside of the Act. The Australian Government Department of Health (DoH) is
responsible for the operation of the Act.
This quick guide provides a brief overview of aged care in
Australia. It describes the types of care provided, arrangements for accessing
subsidised care, statistics on aged care, the organisations that provide care, and
the regulatory arrangements for ensuring quality care. The quick guide does not
describe care that is provided outside of the formal aged care system, such as care provided by family members or
accommodation in retirement
Types of care
The Australian Government subsidises aged care services for
older people. Subsidised care provided under the Act consists of home care,
residential care and flexible care. Care provided through funding agreements
with providers (rather than under the framework specified in the Act) includes
home support and Indigenous flexible care. Following is a brief outline of each
type of care, together with information on care statistics and support
Care at home
Home Support Programme (CHSP) provides entry-level home help for older
people, as well as planned respite activities to relieve carers. CHSP services
may be provided at home or in the community. Services include social support,
transport, help with domestic chores, personal care, home maintenance, home
modification, nursing care, meals and allied health services. Clients pay a contribution
(which varies between providers) towards the cost of services and CHSP
providers receive Australian Government funding
through grant agreements. The CHSP was formed from the amalgamation of the
Commonwealth Home and Community Care (HACC) programme and three other programs
in July 2015. The CHSP operates in every state and territory except for Western
Australia, where the Western
Australian HACC Program continues to provide basic support services to
older people as well as younger people with disabilities.
For older people requiring a greater level of help to
remain at home, the Home
Care Packages (HCP) Programme offers coordinated packages of care from an
approved home care provider. HCPs assist older people to stay at home (rather
than entering residential aged care) and provide ongoing personal and support
services and clinical care. Each package of services is individually tailored
to the client’s needs according to the principles of Consumer
Directed Care (CDC). CDC allows the client to have more choice and
flexibility when selecting care and services, including a say in how the
funding for their package is spent.
There are four levels of HCP, ranging from Home Care Level
1 (supporting people with basic care needs) to Home Care Level 4 (supporting
people with high care needs). The higher the level, the more funding the
package attracts. Daily HCP subsidies
that are paid to providers currently range from $22.04 (Home Care Level 1) to
$133.99 (Home Care Level 4). Additional supplements may also be paid depending
on the client’s circumstances. Clients are expected to contribute
to the cost of their care. Anyone receiving an HCP can be asked by their
provider to pay the basic daily fee of up to 17.5 per cent of the single basic
Age Pension (which currently equates to $139.58 per fortnight). Part pensioners
and self-funded retirees can also be asked to pay an income tested fee (subject
to annual and lifetime caps).
The Australian Government announced
in the 2015–16 Budget that it was considering merging the CHSP and HCP
programmes from July 2018 in order to reduce ‘red tape’ and make the system
easier for clients to understand.
aged care is provided in aged care homes on a permanent or respite (short-term)
basis. It is for people who need more care than can be provided in their own
homes. Services include personal care, accommodation, support services (such as
laundry and meals), nursing and some allied health services.
Residential aged care is funded by both the Australian
Government and contributions from residents. The Australian Government pays subsidies
and supplements to approved providers for each resident receiving care
under the Act. The basic care subsidy for each permanent resident is calculated
using the Aged Care Funding Instrument (ACFI). The
ACFI is a tool that the provider uses to assess the care needs of a resident.
The ACFI consists of a series of questions that determine funding across three
domains: Activities of Daily Living, Behaviour and Complex Health Care. The
greater the assessed need in each domain, the higher the care subsidy for that
resident. As at 1 July 2016, a resident with the highest level of need across
all three domains would attract a daily basic care subsidy of $214.06. Recent changes to the ACFI, designed to rein in
higher than expected growth in ACFI expenditure, have proved controversial with aged care providers and
health peak bodies.
Residents also pay fees
which contribute to the cost of their care and accommodation. All residents pay
a basic daily fee set at 85 per cent of the single basic Age Pension (which currently
equates to $678.21 per fortnight). Some residents also pay a means-tested care
fee based on an assessment of their income and assets. Some residents will have
their accommodation costs met in full or part by the Australian Government, but
those with greater means are required to pay the accommodation price (formerly
known as a bond) agreed with the aged care home.
caters for older people who may need a different care approach than that
offered by mainstream home and residential care services. There are four types
of flexible care provided under the Act:
Care is jointly funded by the Australian Government and state and territory
governments, and provides up to 12 weeks of care and rehabilitation upon
discharge from hospital. It aims to allow older people to return home rather
than prematurely entering residential care
Restorative Care (STRC) has a similar aim to transition care, but is
available to older people who have had a setback or decline in function rather
than a hospital stay. STRC involves a package of services, delivered for up to eight
weeks, to improve the person’s wellbeing and ability to manage at home. STRC is
subsidised by the Australian Government
- The Multi-Purpose
Services (MPS) Programme provides integrated health and aged care services
in small rural and remote communities. MPSs pool Australian and state or
territory government funding to provide services in regions that could not
support stand-alone hospitals or aged care homes
- The Innovative
Care Programme consists of a small number of grandfathered places from
pilot projects of innovative home care services. Places cease as individual
care recipients leave them and no new places are being allocated under this
programme. These places are subsidised by the Australian Government.
Flexible care is also provided for Indigenous Australians
through grants administered outside of the framework of the Act. The National Aboriginal and Torres Strait Islander Flexible Aged Care
Programme (NATSIFAC) funds services that are intended
to provide culturally appropriate residential and home care for Indigenous
Australians in rural and remote areas.
care statistics are available from a number of sources. DoH publishes data
from the annual Stocktake of Australian Government Subsidised Aged Care Places, showing the number and type of aged care places in each state,
territory and Aged Care Planning Region (used by the Government to plan an
equitable distribution of places across regions). DoH also
publishes annual Aged Care Service Lists detailing every
service that the Australian Government funds under the Act (as well as NATSIFAC
services). The Parliamentary Library produces an enhanced
version of this list available to members of
Parliament to assist them to identify services in their electorate.
More detailed statistics and descriptive
information about aged care programs are available in the Reports on the Operation of the Aged Care Act 1997 and the Aged care services chapter of the Productivity
Commission’s (PC) Reports on Government Services.
Aged Care Data Clearinghouse (NACDC) at the Australian Institute of Health
and Welfare (AIHW) collates data from a number of government agencies and
departments and produces a variety of statistical
reports on aged care. This includes Residential
aged care and Home Care web reports, and the Regional
Aged Care Profiles Tool.
In addition to directly subsidising the provision of aged
care, the Australian Government also funds a number of programs to support
aged care clients with special needs, aged care staff and providers.
Nine groups of people are identified as having special needs
under the Act. This includes Indigenous Australians, people from culturally and
linguistically diverse (CALD) backgrounds, lesbian, gay, bisexual, transgender
and intersex (LGBTI) people, veterans and people who live in rural or remote
areas. As part of the planning process described below, the Secretary of DoH
can decide that a number of residential or flexible places will be made
available to focus on the care of one or more of these groups. The Government
also funds a number of supplements, strategies and programs to meet the needs
of these groups. For example:
- a Partners
in Culturally Appropriate Care (PICAC) organisation is funded in each state
and territory to help aged care providers deliver culturally appropriate care
to clients from CALD backgrounds, and to assist these clients in accessing care
- the National
LGBTI Ageing and Aged Care Strategy includes a number of goals and actions
to improve the aged care system for LGBTI people
- aged care providers caring for individual clients who are
veterans, in financial hardship, or homeless can receive supplements
to the base funding for these clients in specified circumstances
- a viability
supplement is paid to aged care providers in rural and remote areas, as
well as providers of specialist services to Indigenous or homeless clients, to
assist with the higher costs of providing care in these areas.
The aged care system cares for many clients with dementia.
Home care providers receive a Dementia and Cognition Supplement for clients
with moderate to severe cognitive impairment. ACFI funding for
residential care providers takes into account each client’s needs, including
needs associated with dementia. Residential care providers can also request
advice to help them care for residents with severe behavioural and
psychological symptoms of dementia from mobile clinical teams known as Severe
Behaviour Response Teams. The Government also funds a number of other dementia programs, which have recently been reviewed.
Aged care clients are directly supported through the National
Aged Care Advocacy Programme (NACAP) and the Community
Visitors Scheme (CVS). The Australian Government currently funds nine NACAP
organisations to help clients make decisions about aged care, inform clients
and providers about consumers’ rights, and advocate for clients experiencing problems
in aged care. The NACAP has recently been reviewed. The CVS funds community
organisations to recruit, train and support volunteers to visit socially
isolated aged care clients at home or in residential care.
The Australian Government funds a number of workforce development programs, including
training and education for aged care staff. These programs have recently been reviewed, with some programs
being discontinued in the Mid-Year Economic and Fiscal Outlook 2015–16 (p. 184).
Access to aged care
Allocation of places
The Australian Government controls the number of subsidised
aged care places that are available (in the home or in a care facility). The planning framework
aims to increase the number of aged care places in line with the ageing
population, and to balance the supply of places across city and country areas.
The Government is aiming for an aged care provision
ratio of 125 aged care places per 1,000 people aged 70 years or over by
2021–22. As at 30 June 2015, there were 111.5 operational
aged care places (81.1 residential and 30.4 home care) per 1,000 people aged
70 or over.
Aged care places are currently allocated to providers who
are approved to provide care under the Act (approved providers),
and eligible clients must find a provider with an available place in order to
access care. In line with recommendations
by the PC for greater consumer choice, from February 2017, home care places
will be allocated
directly to clients who can then choose their preferred provider. Providers
of residential care who want to increase their allocation of places will
continue to compete for new places through the annual Aged
Care Approvals Round.
Assessment of eligibility
The My Aged Care call centre and website provide aged care information and serve as the
primary contact point for people seeking subsidised aged care. My Aged Care centre
staff screen and assess clients over the phone, and
can then refer them for a face-to-face assessment to determine their
eligibility for services such as home support, home care or residential care. Family
members, health professionals and service providers can also make a referral to My Aged Care on behalf of an older person.
Clients needing entry-level home support will be referred by
My Aged Care to a Regional
Assessment Service (RAS). Clients seeking subsidised home care, residential
care or flexible care under the Act require comprehensive assessment and
approval for care by an Aged
Care Assessment Team (ACAT).
Aged Care Providers
Aged care services are delivered in Australia by many
different not-for-profit, for-profit and government providers, with some
providing more than one type of care. According to the AIHW,
as at 30 June 2015 there were:
- 504 home care providers offering more than 72,000 HCPs through
2,263 service outlets and
- 972 residential care providers providing more than 192,000 places
in 2,681 aged care facilities.
data show that as at 30 June 2015, there were 1,084 Commonwealth HACC
providers (many of whom would now be CHSP providers) who delivered home support
services to more than 530,000 clients in 2014–15 (p. 32).
The majority of providers in all three sectors (home care,
residential care and home support) are not-for-profit providers, a category
that includes religious, charitable and community-based organisations.
Individual services and facilities can be located through
a service directory on the My Aged Care website.
Information on the funding and financial performance of
providers is published by the Aged Care Financing Authority in its annual Reports
on the Funding and Financing of the Aged Care Sector.
Regulation and compliance
Three main bodies are responsible for regulation and
compliance relating to the provision of aged care services. They can share
information with each other in order to carry out their duties. Broadly
Providers who wish to receive Australian Government
subsidies for providing care under the Act must be approved by DoH
as suitable to provide aged care. Approved providers are accountable for the
care they provide, and have responsibilities
under the Act relating to the quality of care, the rights of care recipients
and governance. If providers fail to comply with their responsibilities, DoH
can issue a notice
of non-compliance or impose sanctions on the provider. Residential services
that have been issued
with a notice of non-compliance and services under
sanction are listed on the DoH website.
AACQA is an independent statutory agency established under
Aged Care Quality Agency Act 2013. AACQA accredits
residential care services and conducts quality
reviews of home care services, CHSP services and NATSIFAC
services. Accreditation reports for individual residential
care facilities are searchable on the AACQA website.
Care Complaints Commissioner is a statutory office holder under the Act,
supported by around 150 complaints officers. The Commissioner can examine complaints
about Australian Government funded aged care providers, including residential,
home care, flexible care and CHSP services. The Commissioner has a number of options
for resolving complaints, including helping the complainant and provider to
reach agreement, directing the provider to make changes, or referring the provider
to DoH for compliance action.
Aged care reform
The aged care system has undergone major reform in recent
years. In response to a 2011 PC report calling
changes to the aged care system to improve access, quality, consumer choice
and financial sustainability, the then Labor Government announced the Living
Longer. Living Better (LLLB) reform package in 2012. The first
wave of LLLB reforms were legislated in 2013 and are now under review.
The findings of the review may provide further impetus for
reform. In addition, key stakeholders are continuing to
argue for further change. In April 2016, the Aged
Care Sector Committee produced a Roadmap
at the request of then Assistant Minister for Social Services, Mitch Fifield,
calling for wide-ranging changes to make the system more sustainable,
consumer-driven and market based. This included
some proposals for deregulation that were recommended by the PC in 2011 but
not adopted by the government. Assistant Minister for Health and Aged Care, Ken
Wyatt, has reportedly
described elements of the Roadmap as pragmatic, and indicated that it provides
a foundation to work towards a demand-driven industry. However, any proposed changes
are likely to be subject to ongoing debate and review.
Aged Care Financing Authority (ACFA), Fourth
report on the funding and financing of the aged care sector, ACFA, 2016.
Ageing Agenda website.
Baldwin B, Chenoweth L and dela Rama M, ‘Residential
aged care policy in Australia—are we learning from evidence?’, Australian
Journal of Public Administration, 74(2), June 2015, pp. 128–141.
Department of Health (DoH), 2014–15
Report on the operation of the Aged Care Act 1997, DoH, Canberra, 2015.
Grove A, ‘Aged
care—reforming the aged care system’, Briefing
book: key issues for the 45th Parliament, Parliamentary Library, Canberra,
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