Updated 30 April 2021
PDF version [357 KB]
Rebecca Storen (an update of an earlier quick guide
by Alex Grove)
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 aged care homes (also known as nursing homes or residential
aged care facilities) 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 $21.5 billion in 2019–20.
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. In addition, this quick
guide includes a brief overview of the Royal Commission into Aged Care Quality
and Safety. 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. Aged care provided under the Act consists of home care,
residential care and flexible care. Care provided through funding agreements between
the Australian Government and providers (rather than under the framework
specified in the Act) includes home support and Aboriginal and Torres Strait
Islander flexible care.
Home Support Programme (CHSP) provides entry-level home support
services to assist older people, as well as respite services to support carers.
The CHSP is designed to help people to remain independent and safe at home with
services available 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.
As part of the eligibility
criteria, a person must be 65 years or older (or 50 years or older for
Aboriginal and Torres Strait Islander people) or 50 years or older (45 years or
older for Aboriginal and Torres Strait Islander people) on a low income who are
experiencing homeless, or at risk of being homeless.
Clients pay a contribution (which
varies between providers) towards the cost of services. CHSP providers receive
Australian Government funding
through grant agreements, with funding having been extended for existing
CHSP providers until June 2022. The CHSP provides small amounts of support to a
large number of people, with each client having received, on average, around $2,949
worth of services in 2018–19 (p. 36).
For older people requiring a greater level of support to
remain at home, the Home
Care Packages (HCP) Program offers coordinated packages of care from
an approved home care provider. HCP are designed to provide more comprehensive
care and support than the CHSP and seek to support people to maintain their
independence and remain safely at home. Each package of services is customised
to meet the individual’s 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 $9,000 for a Level 1 package to
around $52,000 for a Level 4 package. Additional supplements may
also be paid depending on a person’s individual circumstances.
HCP clients are expected to contribute to the cost of their
care. Anyone receiving a HCP can be asked by their provider to pay the basic
daily fee, which is a percentage 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
and supplements to approved providers for each resident. The average
government payment for each permanent resident was $69,055 in 2019–20
(p. 95). 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 providers use to claim
care subsidy for each resident in permanent residential aged care. The
Government is trialling
a new residential aged care funding tool to potentially replace the
ACFI called the Australian National Aged Care Classification (AN-ACC). From
April 2021, the DoH commenced a 12 month ‘shadow
assessment’ period, which requires everyone living in residential aged care
(excluding palliative residents) to be assessed under the AN-ACC by one of six
management organisations. ACFI will continue to operate during the shadow
Residents also pay costs and 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 an accommodation
price (formerly known as a bond) agreed with the aged care home.
care caters for older people who need a different approach to care
than is offered by mainstream home and residential services. Four types of
flexible care are provided under the Act:
- The Transition
Care Programme is jointly funded by the Australian and state and territory
governments, and provides up to 12 weeks of care and recovery on discharge from
hospital. This can be provided in aged care homes, in the community or in a
Restorative Care (STRC) Programme is available to older people to reverse
or slow a decline in function (not linked to a recent hospital admission),
which may help them to stay at home or delay entry to higher levels of care. It
provides up to eight weeks of services to improve wellbeing and function and is
subsidised by the Australian Government.
Services (MPS) Program provides integrated health and aged care
services in small rural and remote communities. MPS are jointly funded by
Australian and state and territory governments to serve regions that cannot
support stand-alone hospitals or aged care homes.
Care Programme consists of a small number of grandfathered places from pilot
projects of top-up 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
839,373 people received support through the CHSP (p. 28). As of 30 June 2020,
142,436 people were receiving an HCP and 183,989 people were receiving
permanent residential aged care (pp. 33 and 49).
There is no minimum age requirement to access aged care
services under the Act, rather it is assessed need that determines access, although aged
care services are targeted at people aged 65 or older (50 or older for
Indigenous Australians) (p. 6). In 2019-20, the average
age on entry to a HCP was 80.9 years for men and 81.1 years for women.
For permanent residential aged care, the average age on entry was 82.5 years
for men and 84.8 years for women (p. 11). Indigenous
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
As of 30 June 2019, around 53 per cent
of people living in permanent residential care had been diagnosed with dementia.
ACFI funding for residential care is based on a person’s assessed needs, which
can include needs associated with dementia. In 2019, people living with
dementia were assessed
as having ‘high’ care needs more often than people who had not received a
diagnosis of dementia for two of the three ACFI domains. The third domain,
complex health care, had a similar assessed care rating between people with and
without dementia. Around one in
11 people who receive an HCP also receive the dementia
and cognition supplement, which is a
payment for people with moderate to severe cognitive impairment. The Australian
Government also funds a number of dementia-specific programs and services,
Care Diversity Framework encourages providers to meet the diverse
needs of all older Australians and has several action
plans. 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. Specific programs and
initiatives are available for ‘special needs’ groups, including Indigenous
from culturally and linguistically diverse backgrounds, people
who live in rural and remote areas, people
who are financially disadvantaged, veterans, people
facing homelessness, care
leavers (people who were in institutional or foster care as a child)
gay, bisexual, transgender and intersex people.
Aged Care Advocacy Program (NACAP) provides independent, free advocacy
support and information to older people and their carers. The Older Persons Advocacy Network is funded
by the Australian Government to deliver the NACAP.
Visitors Scheme provides volunteers to visit socially isolated people
in residential and home care. It is funded by the Australian Government and
delivered by community organisations.
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.
Access to aged care
My Aged Care is
the single entry point for Australian Government-funded aged care. My Aged Care
staff screen people
over the phone, and can refer them for a face-to-face assessment to determine
their eligibility for services. People 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).
Allocation of places
The Australian Government controls the number of subsidised
aged care places that are available. New residential and STRC places, and
home care packages are made available based on levels of current provision,
population projections and the aged care target provision ratio, which
determines the number of subsidised places per 1,000 people aged 70 years and
over. 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.
Since February 2017, HCPs are allocated to eligible
clients based on a national prioritisation system (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 2020, there were 96,859 people waiting for an HCP at their
approved level. Of these, 60,456 had not been offered an interim HCP, while the
other 36,403 people had been offered an interim lower level package while
waiting for an HCP at their approved level. The majority of people waiting for
an HCP at their approved level were also approved to access CHSP. In addition, 61
per cent of people waiting for an HCP at their approved level were also
approved for a permanent place in residential aged care.
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 . In 2018-19,
- 873 organisations operating 2,717
residential aged care services
- 928 organisations operating 2,691
home care services and
- 1,458 organisations operating 3,717
home support outlets.
Individual services and facilities can be located through
a provider’ 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 (2016),
there were an estimated 366,000 aged care employees, 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 2016, 67 per cent of
personal care attendants in residential care had a Certificate III in Aged Care
and 23 per cent had a Certificate IV in Aged Care. For home care and support,
51 per cent of community care workers had a Certificate III in Aged Care and 27
per cent had a Certificate III in Home and Community Care. Only 15 per cent of
community care workers had an Aged Care or Service Co-ordination Certificate IV
qualification in 2016. In 2016, Registered Nurses and Enrolled Nurses made up
about 15 and 10 per cent of the PAYG direct care workforce in residential aged
care respectively. In home care and home support, Registered Nurses made up 8
per cent of the direct care workforce.
In 2011, the Productivity
Commission found that almost one million direct care workers may be
required by 2050. The Aged Care Workforce Strategy Taskforce’s A
Matter of Care: Australia’s Aged Care Workforce Strategy (Aged Care
Workforce Strategy) sets out areas of ‘strategic action’ needed to develop the
aged care workforce. The Australian
Government has funded the Aged Care
Workforce Industry Council to implement the strategic actions and
recommendations in the strategy. In addition, 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. The Australian
Government announced additional funding for the aged
care sector in response to COVID-19, including the Aged
Care Workforce Retention Bonus Payment.
Regulation and quality
The Aged Care
Quality and Safety Commission (ACQSC) is an independent statutory
agency established under the Aged Care Quality
and Safety Commission Act 2018. Since January 2020, the ACQSC has the
regulatory functions for providers of aged care services, including the
assessment and approval of approved
provider applications and assessment
of Commonwealth subsidised aged care services against the Aged Care Quality
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
4 of the Act. If providers fail to comply with their responsibilities, the
ACQSC can take different
courses of action, including issuing
a notice of non-compliance or impose
sanctions on the provider. In addition to the non-compliance register
on the ACQSC website, My Aged Care has a non-compliance
checker, which people can search by location, name or date range.
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
Report was presented to the Governor-General on 31 October 2019. The Final
Report was presented to the Governor-General on 26 February 2021 and was released
by the Government on 1 March 2021.
The Parliamentary Library has published two quick guides on
the Royal Commission. The first
quick guide was published in September 2019
and outlines the scope and aims of the Royal Commission. The second
quick guide focuses on the Final Report and four of the fundamental
elements that the Commissioners recommend to reform the aged care system.