Karen Watson, Moira Dunsmore

Sydney Nursing School, Faculty of Medicine and Health, The University of Sydney (Australia)

Australia employs a hybrid model of aged care services tailored to the needs of its population (1). Like in many advanced economies, older Australians increasingly prefer to age in place, often managing complex health issues related to age-related comorbidities (2, 3). To facilitate this choice, the system encompasses various types of care, including informal and formal support, often in combination (1). These mixed care networks are crucial for the broader functioning of the Long-Term Care (LTC) system. Disability services provided for younger people requiring functional or health support are managed through separate funding and service provision by the National Disability Insurance Scheme (4).

The aged care system offers personal and nursing care to assist older individuals to maintain functional independence and health for as long as possible. Currently, the system supports over 1.2 million people; approximately 821,000 older Australians utilise home support services, 140,000 receive home care, and 185,000 are in residential aged care, either permanently or in temporary respite. Proportionally for those aged 65 and over, 7% received residential care, while 22% accessed home support (1).

Access to services within an appropriate timeframe varies. To access aged care services, individuals contact the government’s My Aged Care service, either online or by phone. After an introductory consultation, My Aged Care arrange one of two assessments based on the person’s responses to determine their care needs. Regional Assessment Services (RAS) assess eligibility for entry-level support through the Commonwealth Home Support Programme (CHSP), while Aged Care Assessment Teams (ACATs) conduct comprehensive assessments for access to Home Care Packages (HCPs) and residential aged care, whether for permanent or respite care (5).

In 2019–20, 42% of the aged care target population—those aged 65 and over, or Aboriginal and Torres Strait Islander Australians aged 50–64 years — assessed by an ACAT, entered residential aged care within three months of their approval. The median wait time for accessing a Home Care Package varied significantly, ranging from six months for a Level 1 package to 28 months for a Level 4 package (6). This variability in wait times highlights the challenges individuals face in seeking timely access to essential care and support services.

The Federal (national) Government funds and oversees health and social care for Australians aged 65 and over, providing three main types of support: the Commonwealth Home Support Program for lower-level support services, the Home Care Packages Program for higher-level services including nursing care, to enable independent living, and Residential Aged Care. Government-subsidised aged care eligibility is based on need, with no minimum age requirement except for home support (7).

The Federal government is the major funder of home care services (95%) and residential care (75%), and are responsible for aged care policy development, safety standards and equipment, staffing levels and approving service providers. State governments receive funding from the Federal Government to provide services such as Aged Care Assessment Teams (ACAT), Transitional Aged Care Programs (TCAP), and the Commonwealth Home Support Program; for residents of the relevant State. Recent shifts towards consumer-directed care have increased individual responsibility and choice in service selection within packages for the funding awarded (8).

Government policy reforms such as the Aged Care (Living Longer Living Better) Bill of 2013 and the Aged Care Act of 1997 aimed to improve service quality and empower older persons. Since 2017, home care packages are allocated directly to consumers, allowing them to choose providers, though this requires a certain level of health literacy, posing challenges for some older people.

The aged care system relies on a mix of federal, state, and private funding contributions, making navigation complex for many older adults. In 2017-2018, the Federal Government allocated over $A18 billion to aged care services, of which 67% (over $12 billion) is directed to residential care and 28% (over $5 billion) to home care and support (10). These funds are sourced from national-level taxation on the workforce and businesses. The Income-Tested Care Fee for individuals seeking support is determined through a formal income assessment by Services Australia, with annual and lifetime caps on contributions.

For both Residential aged care and home care, income and assets determine the amount a person contributes to their care. A number of components are considered in this assessment. A single person earning less than $33,735.00 or living with another earning $26,109.20 annually is excluded from the income test and pays the basic daily care fee only. Once income exceeds this limit, different levels of contribution apply based on income.

Home care consumers contribute to their care costs through three fee types: The first the Basic Daily Fee (at time of writing, ranging from $11.72 to $13.08) depending on the level of care provided. The second an income tested fee, for example, home care consumers with income above $65,020.80 for a single person and $64,3344.80 for a couple are subject to higher daily care fees and annual caps (up to $37.55 daily). The third type of payment is Additional Fees for extra services not covered by Home Care Packages (11).

When accessing residential aged care, there is an asset-free threshold of $61,500, and the net value of a person’s home above $206,039, the first asset threshold, is exempt from a person’s or couple’s assessable assets (11). As of January 2025, the maximum residential aged care daily basic fee was $63.57 with limits on means tested fees of $34,174.16 annually or $82,018.15 paid by the consumer over their lifetime. Those that cannot afford this cost can apply for an accommodation supplement of up to $69.49 per day provided as a government subsidy.

The Australian National Aged Care Classification (AN-ACC) assesses care needs for individuals in permanent residential care, affecting provider funding (12); reassessment within the year is available if an individual’s needs change. The AN-ACC evaluates care needs across four areas: Physical Ability, Cognitive Ability, Behaviour, and Mental Health. Assessments are conducted by trained, independent clinicians with at least five years’ experience. These assessors determine the required care level across 13 funding classes, based on factors like mobility, cognitive ability, functional status, pressure sore risks, wound care, fall risks, and daily medication injection needs. The AN-ACC includes funding that provides 44 minutes of care time delivered to each resident by a registered nurse each day. Funding is provided via three components: a base care tariff subsidy (fixed funding for services), AN-ACC classification subsidy – based on individual care needs and any adjustment payments for transitioning into new permanent residential care (13).

Continued issues in care quality and safety led to the recent Royal Commission into Aged Care Quality and Safety, resulting in 148 recommendations and significant reforms, including a new Aged Care Act to address ongoing concerns and improve care standards (9).

Australia’s government-funded aged care system comprises three main types: Home Support (Commonwealth Home Support Program) with average funding of $3,000 per person per year, Home Care (Home Care Packages Program), and Residential Aged Care (LTC). Home Support provides entry-level care at home, offering services such as domestic assistance, personal care, social support, allied health, and respite services. Home Care delivers more comprehensive support for individuals with greater needs, including nursing care, help with household tasks like cleaning and cooking, and assistance with maintaining social connections through transport and community engagement. Residential Aged Care (including respite): Permanent care is intended for individuals who can no longer live at home due to increased care requirements, while respite care provides temporary relief from usual living arrangements (5, 7).

Informal carers provide significant amounts of care to older people in Australia, often in an unpaid capacity; the value of this unpaid work is significant; in 2020 this was estimated at $77.9 billion (14). Some informal carers receive financial support, a Carers Payment from the Australian government. Forty percent of carers rely on a government allowance as their main source of income. Carers Australia is a government agency that offers discounts (e.g. for energy services and entertainment vouchers), information on support programs and avenues to organise respite services, support networks to reduce burden and improve psychosocial support (15).

Home Support and Home Care services are designed to help individuals remain well and independent in their home, by supporting their functioning, daily activities and social connections. Home Care services are delivered in four levels based on assessed care needs. Level 1 offers basic assistance such as shopping, transportation, and meal preparation, while Level 4 provides high-level care, including help with bathing, dressing, mobility, and additional support for conditions such as dementia or sensory impairments. In 2020, 12% of recipients were on Level 1, 41% on Level 2, 21% on Level 3, and 27% on Level 4 (7, 16).

Retirement living is a residential complex mainly resided by people over the age of 55 who have entered into a contractual arrangement with the facility owner. Retirement living offers older people a safe and secure environment with low maintenance units or villas. They offer benefits to lifestyle, accessibility and safety, with opportunities to stay social and connected to the community through activities and events. People living in retirement villages are still eligible for CHSP or HCPs. Costs of retirement living can be expensive and often require an upfront capital investment, exit fees and no capital gains on the investment by the older person (17, 18) .

Australian Government Group homes provide permanent or temporary accommodation for people with a disability or for people that are socially disadvantaged with up to 10 bedrooms in one home. Group Homes Australia provides aged care and dementia accommodation for 6-10 residents per home. The group home is overseen by 24-hour staff that manage the general operations of the home. The small number of residents promotes a comfortable, safe and social home environment (19).

Residential aged care provides accommodation and care in a facility, either on a permanent or respite (temporary) basis. Residential aged care typically serves older individuals compared to other aged care programs, with the average age at admission being 83 and 85 years for men and women, respectively. In 2020, approximately 185,000 older people accessed residential aged care, 179,000 in permanent care and 5,800 using respite care. The number of older individuals in permanent residential care increased by 15% in a decade, from 156,000 in 2010 to 179,000 in 2020. The number of older women in permanent residential care is more than double that of older men, with most residents aged 85 – 89 years (1).

Commonwealth Home Support Program provides funding for home modifications, such as ramps, easy access taps, grab rails among others, to assist people to remain in their homes for longer.

More broadly, development of age friendly cities and communities are currently in their infancy, with a variety of initiatives being developed or implemented as pilot programs. Some examples are described below, but this is not exhaustive. The Waverton Hub is an aged friendly initiative of Bayside council in New South Wales. This community led hub of residents from neighbouring areas in Sydney aim to keep residents healthy and active in their own homes at a low cost. The group organises transport, to shops, social and cultural events, computer training, art and exercise classes, neighbourhood gatherings and morning/afternoon teas (20). Shared lives Australia matches older people in need of some assistance at home with tertiary students who need housing. In return for low-cost accommodation, the student contributes 10 hours of support at home per week, by cooking meals and other support activities (21). In 2017, Brisbane Airport in Queensland was recognised as Australia’s first Dementia Friendly Airport by Alzheimer’s Australia. This designation highlights its efforts to support individuals living with dementia by creating an accessible and accommodating environment (22).

In addition, other dementia-friendly initiatives have been developed across the country. These include the Dementia Friendly Pharmacy program, which offers a comprehensive three-hour training package for pharmacy staff, and Dementia Friendly creative workshops held in Lithgow, New South Wales. Furthermore, physical modifications to improve accessibility for people living with dementia have been implemented in various locations, such as Tailem Bend in regional South Australia (23).

Similar to other advanced economies, the use of assistive technologies in LTC and home care settings is continuing to be implemented, often as pilot programs in partnerships between providers and technology companies. Innovations include monitoring devices for functioning and safety, communication aids and social engagement technologies, telehealth and augmented / virtual reality devices and apps. Aged Care Research & Industry Innovation Australia (ARIIA) is an independent not-for-profit association that provides advocacy, networking and grants to foster technology and innovation transfer in aged care contexts (24). Advanced technologies, such as telehealth and AI, will continue to develop and be more broadly adopted, to support proactive care by facilitating remote monitoring and health data analysis.

The LTC workforce of approximately 370,000, consists of ‘70% personal care workers (PCWs), 23% nurses, and 7% allied health professionals’ (25) p. 8). An additional 52,801 staff members are employed in ancillary roles, including cooks, cleaners, and laundry assistants. Of the direct care workforce, 35% identify as being from culturally diverse backgrounds. In 2021, the Australian Workforce census reported 72% of this culturally diverse workforce worked as personal care workers, and 24% as nurses in Australia’s residential care facilities (25).

This diverse workforce is essential for providing comprehensive care and support to individuals in residential aged care settings. Vacancies persist however, exacerbated by issues of low pay, minimal career growth opportunities, and limited practice scope. While Australia’s nursing workforce continues to expand, growth is not sufficient to match the needs and demand of its ageing population, placing strain on both the aged care and acute healthcare systems. Projections indicate a shortage of over 17,000 full-time nurses in aged care by 2035, with Registered Nurses (RNs) currently making up only 17% of aged care staff  (26). Since March 2022, aged care facilities have hired 115,000 new staff members, yet 43,000 vacancies remain, primarily for personal care workers and RNs (26). Key challenges in recruitment include a limited pool of qualified candidates and competition with other sectors, making it difficult to fill essential roles.

New legislation mandates that aged care facilities maintain 24-hour / 7-day RN coverage and meet minimum care minutes per resident. However, a national nursing shortage, especially acute in rural areas, has forced many facilities to depend on expensive agency staff. The number of RNs in aged care declined from 21,210 in 2020 to 18,800 in 2023, while reliance on agency RNs significantly increased. Australia’s aged care workforce of 370,000 is predominantly composed of direct care staff (80%) (27). Most personal care workers possess a Certificate III or higher. Certificate III training is 12 weeks duration of one day per week (in class or online), completion of assessments and 120 hours of practical workplace experience (28).

Of note, currently aged care RNs earn less than their counterparts in acute care settings, and often manage up to 100 residents without mandated nurse-to-patient ratios. Practice restrictions, such as the inability to administer intravenous medications, frequently result in unnecessary hospital transfers, further diminishing the professional standing of aged care nurses. Only 31% of providers offer enterprise agreements covering RNs, contributing to issues with pay and conditions. The challenging work environment, high patient ratios, low wages, and social stigma associated with aged care nursing lead to an annual loss of 65,000 workers in the sector, compounding the workforce shortage and undermining the sustainability of aged care service delivery (29).

While information systems play a critical role in supporting innovations in care, streamlining operations, and improving resident outcomes, this functionality is not system-wide, and depends primarily on the private healthcare providers. Electronic Health Records centralise health data for coordinated care, while medication management systems and telehealth platforms help prevent errors and reduce hospital visits. AI-driven analytics enable proactive health interventions, and staff management tools ensure optimal workforce efficiency. Compliance and reporting tools support regulatory adherence, while family portals and smart home tech, like wearables, enhance resident safety, engagement, and independence. These initiatives are taking place in aged care setting with wearables becoming more common in the older population these advancements prepare Australia’s aged care sector to meet future demands (24).

Australian aged care facilities are adopting new models of care that emphasise person-centred approaches, technology integration, and workforce innovations. Relationship-Based Care fosters connections between caregivers and residents to improve mental well-being, while Small-Scale Household Models create homelike settings with dedicated staff for a sense of community. Additionally, new workforce models, including multi-disciplinary and nurse-led teams, address staff shortages and enhance care quality (24).

Technology integration is transforming aged care, with telehealth, remote monitoring, and AI-driven predictive analytics enabling early interventions and reducing hospital visits. Enhanced workforce models, such as multi-disciplinary and nurse-led teams, provide comprehensive care (30), while smart home technologies like wearables and automated medication dispensers support residents’ independence and safety. Infection control practices are also advancing, with specialized teams and improved hygiene protocols, and community engagement programs encourage social interactions, often through partnerships with local groups and intergenerational initiatives. Together, these approaches create a holistic and proactive care environment prepared for future demands. This is becoming more widespread among the care home population with most long-term facilities prioritising the intergenerational activities in their program.

The Aged Care Royal Commission into Quality and Safety issued its final report in April 2021. Overall, there were 148 recommendations to improve quality and safety of aged care. Three key areas were identified for immediate action: increasing the availability of Home Care Packages, as over 72,000 people were on a waiting list in June 2019 (6); reducing the use of chemical restraints in aged care; and transitioning young people out of residential aged care facilities (31). A new Aged Care Act was introduced in November 2024, reflecting a universal right to high quality, safe and timely support. Further areas for improvement include a rights-based aged care system, stronger governance focusing on aged care, improved care for informal caregivers and volunteers and better aged care workforce planning.

The COVID-19 pandemic exposed clear vulnerabilities in Australia’s residential aged care facilities, notably a 50% decline in volunteer numbers, which increased strain on staff and reduced resident support. The pandemic experience emphasised the need for stronger infection control, better staff training, adequate PPE, improved communication with families, and better mental health support for residents and staff (32). These lessons underscore the importance of strengthening Australia’s aged care sector and preparing for future health crises.

The Australian Government has made significant progress in implementing recommendations from the Royal Commission into Aged Care Quality and Safety (9). Key initiatives include the new Aged Care Act, which improves accountability and integrity by banning exit fees, capping administrative charges in the Home Care Package Program, mandating 24/7 registered nurse coverage in residential aged care homes, and introducing a Code of Conduct, Star Ratings, and quality indicators (33).

The Support at Home program, set to replace the HCP and CHSP by 2027, offers enhanced end-of-life care with up to $25,000 in additional home support during the final three months of life. In addition, the 2024 Progress Report from the Inspector-General of Aged Care advocates for a needs-based and demand-driven approach while addressing the decline in allied health services in aged care (34). Since the 2021 Royal Commission (9), the Australian Government has also made significant progress in enhancing the aged care workforce. Investments in training and upskilling include the JobTrainer Aged Care Boost, which provides 15,000 free or low-cost training places, postgraduate scholarships with opportunities for Aboriginal and Torres Strait Islander people, and the Home Care Workforce Support Program to attract, train, and retain workers. Aged care wages increased on June 30, 2023, and the new Aged Care Act, effective July 1, 2025, will further strengthen the system(35). Additionally, the upcoming Support at Home program reflects the government’s commitment to better home care services(36). Despite these advancements, further funding is necessary to sustain and expand improvements in the sector.

Watson K. and Dunsmore M. (2025) Long-Term Care System Profile: Australia. Global Observatory of Long-Term Care, Care Policy & Evaluation Centre, London School of Economics and Political Science. https://goltc.org/system-profile/australia/

• My aged care – https://www.myagedcare.gov.au/
• Australian Institute of Health and Welfare, Aged Care https://www.aihw.gov.au/reports-data/health-welfare-services/aged-care/overview
• Carers Australia https://www.carersaustralia.com.au/
• Carers Australia aged care https://www.carersaustralia.com.au/carers-of-older-people/my-aged-care/
• Older Persons Advocacy Network (OPAN) https://opan.org.au/

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