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This quick guide was updated on 30 April 2021
The aged care system caters for older Australians 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 aged care system. Government
expenditure on aged care services, largely by the Australian Government,
was $18.4 billion in 2017–18.
The Aged Care Act 1997
(the Act) and the 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, the people who use aged
care, the process for accessing care, the organisations that provide care, and
the regulatory arrangements for ensuring quality care. It 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. 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.
Home Support Programme (CHSP) provides entry-level home help for older
people, as well as respite services 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 provides small amounts of support to a
large number of people. On average each client received around $2,600
worth of services in 2016–17.
Home care packages
For older people requiring a greater level of help to remain
at home, the Home
Care Packages (HCP) Program offers coordinated packages of care from an approved
home care provider. HCPs assist older people to stay living at home and provide
ongoing personal and support services and clinical care. Each package of
services is customised to meet the individual’s care needs.
There are four levels of HCP, ranging from Level 1
(supporting people with basic care needs) to Level 4 (supporting people with
high care needs). Annual Australian
Government subsidies range from around $8,250 for a Level 1 package to
around $50,250 for a Level 4 package. 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 17.5 per cent of the single basic age pension. Part pensioners
and self-funded retirees can also be asked to pay an income-tested
care fee (subject to annual and
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, 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. The average
government payment for each permanent resident was $65,600 in 2017–18. The
majority of this payment is the basic care subsidy, which is calculated using
the Aged Care Funding Instrument (ACFI). The
ACFI is a tool the provider uses to assess the care needs of each resident. The
greater the assessed need, the higher the care subsidy for that resident. The
Government is trialling
a new residential aged care funding tool to replace the ACFI.
Residents also pay fees
which contribute to the cost of their care and accommodation. All residents can
be asked to pay a basic
daily fee set at 85 per cent of the single basic age pension. 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 in 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 need a different type of care than is offered by mainstream
home and residential services. Four types of flexible care are provided under
care is jointly funded by the Australian and state and territory
governments, and provides up to 12 weeks of care and rehabilitation on
discharge from hospital.
Restorative Care (STRC) is available to older people who have had a setback
or decline in function (but not a hospital stay). It provides up to eight weeks
of services to improve wellbeing and function and is subsidised by the
- The Multi-Purpose
Services (MPS) Program provides integrated health and aged care services in
small rural and remote communities. MPSs pool Australian and state and
territory government funding to serve regions that cannot support stand-alone
hospitals or aged care homes.
- The Innovative
Care Programme consists of a small number of grandfathered places from pilot
projects of top-up aged care services for people with disability living in
state-funded supported accommodation. No new places are being allocated. This
program is subsidised by the Australian Government.
Flexible care is also provided for Indigenous Australians
outside of the framework of the Act. The National Aboriginal and Torres Strait Islander Flexible Aged Care
Program makes grants to services that provide culturally
appropriate residential and home care for Indigenous Australians, mainly in
rural and remote areas.
Aged care consumers
As at 30 June 2018, there were around 783,000
people receiving home support through the CHSP, 91,800
people receiving home care through an HCP and 180,900 people in permanent
residential aged care.
There is no minimum age requirement to access aged care
services under the Act, although aged
care services are targeted at people aged 65 or older (50 or older for
Indigenous Australians) (p. 6). The average
age on entry to an HCP is 80 for men and 81 for women. For permanent
residential aged care, the average age on entry is 82 for men and 85 for women.
Australians access aged care at younger ages than non-Indigenous
women than men use aged care services, reflecting their longer life
expectancy. People living in major cities and inner regional areas use
residential care and HCPs at higher rates than people living in more remote
areas of Australia.
the people in permanent residential care have been diagnosed with dementia.
ACFI funding for residential care takes into account each client’s needs,
including needs associated with dementia. Around one in 11 people receiving an
HCP have moderate to severe cognitive impairment, making them eligible for the dementia
and cognition supplement. The Australian Government also funds a number of
dementia-specific programs and services, including:
The Act (section 11‑3)
lists groups of people who may have ‘special needs’ that can be taken into
account in the aged care planning process. The Aged
Care Diversity Framework encourages providers to meet the diverse needs of
all older Australians. Specific programs and initiatives are also available for
‘special needs’ groups, including Indigenous
from culturally and linguistically diverse backgrounds, people
who live in rural or remote areas, people
who are financially disadvantaged, veterans,
facing homelessness, care
leavers (people who were in institutional or foster care as a child) and lesbian,
gay, bisexual, transgender and intersex people.
Aged Care Advocacy Program provides independent advocacy and information to
older people accessing aged care. It is run by the Older Persons Advocacy Network and funded by
the Australian Government.
Visitors Scheme provides volunteers to visit lonely people in residential
and home care. It is funded by the Australian Government and delivered by community
Access to aged care
The My Aged Care call centre and website is the single entry point for Australian
Government-funded aged care. My Aged Care centre staff screen
and assess clients over the phone, and can refer them
for a face-to-face assessment to determine their eligibility for services. Clients
needing entry-level home support will be referred by My Aged Care to a Regional
Assessment Service. 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).
The Government is trialling a range of Aged
Care System Navigator programs to help people understand and access the
system. A market has also arisen for private placement
consultants who, for a fee, help people navigate the system.
Allocation of places
The Australian Government controls the number of subsidised
aged care places that are available. The planning
framework aims to increase the number of places in line with the ageing
population, and to balance the supply of places across city and country areas.
Residential and flexible places are allocated to approved
providers. Eligible clients must find a provider with an available place to
access care. Residential and STRC providers who want to increase their
allocation compete for new places through the annual Aged
Care Approvals Round.
HCPs are allocated to eligible clients once they reach the
top of the national
package queue (also known as the home care waiting list). The client can
then select an approved home care provider to deliver their package. As at 31
December 2018, there were 127,748
people on the home care waiting list, although most of these could access
either a lower level package or CHSP services while they waited for a package
at their approved level.
Aged care providers
Aged care services are delivered by a range of
not-for-profit, for-profit and government providers.
Not-for-profit providers make up the majority
of residential, home care and home support providers . As at 30
June 2018, there were:
- 886 organisations operating 2,695 residential aged care services
- 873 organisations operating 2,599 home care services and
- 1,456 organisations operating 3,542 home support outlets.
Individual services and facilities can be located through
a service’ directory on the My Aged Care website.
Care Financing Authority and StewartBrown
chartered accountants both produce regular reports on the financial
performance of aged care providers.
According to the National
Aged Care Workforce Census and Survey,
there were around 366,000 aged care workers, with two-thirds in direct care
roles, in 2016. Most direct care workers were female and worked as personal
care attendants or community care workers. There is no minimum qualification
requirement for these roles, although in practice the majority had certificate-level
qualifications in aged care. Nurses made up a quarter of the direct care workers
in residential care and around 10 per cent in home care and support.
Care Workforce Strategy notes that almost one million direct care workers
may be required by 2050. The Australian Government funds a range
of programs to support workforce recruitment, retention and training, although many are not specific to the aged care sector.
Regulation and quality
The DoH and the Aged
Care Quality and Safety Commission (ACQSC) both have responsibilities regarding
the regulation and quality of aged care services. They can share information
with each other in order to carry out these duties.
The DoH approves
providers to provide care under the Act. Approved providers are accountable
for the care they provide, and have responsibilities relating to the quality of
care, the rights of care recipients and governance under Chapter 4 of the Act.
If providers fail to comply with their responsibilities, DoH can issue
a notice of non-compliance or impose
sanctions on the provider. These approval and compliance functions are scheduled to transfer to the ACQSC on 1
January 2020, subject to the passage of legislation.
The ACQSC is an independent statutory agency
established under the Aged
Care Quality and Safety Commission Act 2018. It is
responsible for quality assessment and monitoring of aged care providers. From 1 July
2019, all Australian Government-funded providers will be assessed against the
new Aged Care Quality Standards. The ACQSC also
handles complaints about aged care services, engages with
consumers and provides
education for providers.
Commission into Aged Care Quality and Safety was announced
in September 2018. Its terms
of reference include inquiring into the quality of aged care services, how
best to deliver aged care (including for people with disability or dementia),
and the future challenges and opportunities for delivering care. The Commission
is due to hand down an interim report by October 2019 and a final report by
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