Spending on aged care
Australia’s aged care system operates through funding from the Australian Government and state and territory governments, and care recipient contributions.
Last updated: 30 April 2024
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Contents
Allocation of government spending
Government spending by state and territory
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Allocation of government spending
Governments fund different types of aged care services and support programs. Government spending refers to the total spending from the Australian Government and state and territory governments. The majority of government spending (98.6%) on aged care comes from the Australian Government.
During 2022–23:
- Governments spent almost $28.3 billion on aged care, with the largest proportion (58%) spent on residential aged care. The remaining funds were spent on home care and support (33%) and other aged care services, including flexible care, workforce and service improvement, and assessment and information services (8.8%).
- The $16.3 billion expenditure on residential aged care was almost double the amount spent on home care and support – comprised of home care ($6.2 billion) and home support ($3.0 billion), and other community care services ($0.3 billion), which includes the Department of Veterans’ Affairs community nursing and Veterans’ Home Care (VHC) programs.
The aged care system offers a continuum of care under three main types of service.
- home support (Commonwealth Home Support Programme), which provides entry-level services focused on supporting individuals to undertake tasks of daily living to enable them to be more independent at home and in the community
- home care (Home Care Packages Program), which is a more structured, more comprehensive package of home-based support, provided over four levels
- residential care, which provides support and accommodation for people who have been assessed as needing higher levels of care than can be provided in the home, and the option for 24-hour nursing care – residential care is provided on either a permanent, or a temporary (respite) basis.
There are also several types of flexible care, and services for specific population groups, available that extend across the spectrum from home support to residential aged care, including:
- transition care (Transition Care Programme), which provides short-term care to restore independent living after a hospital stay
- short-term restorative care (Short-Term Restorative Care Programme), which expands on transition care to include anyone whose capacity to live independently is at risk
- Multi-Purpose Services Program, which offers aged care alongside health services in Regional and remote areas
- Innovative Care Programme which includes a range of programs to support flexible ways of providing care to target population groups
- National Aboriginal and Torres Strait Islander Flexible Aged Care Program, which provides culturally-appropriate aged care at home and in the community
- Department of Veterans’ Affairs community nursing and Veterans’ Home Care services for eligible veterans and their families, which provides support to help people stay independent and in their own home.
For more information on aged care services in Australia see the Report on the Operation of the Aged Care Act, or visit the Department of Health and Aged Care website.
Government spending over time
Aged care spending patterns, and spending per person in the target population, have changed over the past 5 years. Government spending refers to the total spending from the Australian Government and state and territory governments. The aged care target population in this section refers to all people aged 65 and over and Aboriginal and Torres Strait Islander (First Nations) people aged 50–64. Time series financial data in this section have been adjusted for inflation.
During 2022–23:
- Government spending on aged care services was 28% higher than it was during 2018–19, resulting from annual spending increases across this 5 year period.
- Spending on home care and support was 10% higher than in 2021–22, and 46% higher than in 2018–19. Over the same 5 year period, spending on flexible and residential care increased by 35% and 13% respectively.
- Government spending on aged care services per person in the target population increased by 14%, from $5,354 to $6,097 per person between 2018–19 and 2022–23.
- In 2022–23, spending per person was highest for residential care ($3,518 per person) followed by home care and support ($2,040 per person).
Care recipient spending
Most people using aged care contribute to the cost of their care. The level of contribution is subject to an assessment of affordability. Information on the share of aged care provider revenue from care recipient contributions in this section is sourced from the Financial Report on the Australian Aged Care Sector.
During 2021–22:
- Residential care recipients contributed $5.6 billion to the cost of their care, up from $5.5 billion in 2020–21 (1.7% increase).
- Contributions from care recipients accounted for 25% of the total revenue received by residential care providers (down from 26% in 2020–21 and 27% in 2018–19).
- Home care recipients contributed $111 million dollars to the cost of their care, up from $96 million in 2020–21 (16% increase).
- Contributions from care recipients accounted for 2.4% of the total revenue received by home care providers in 2020–21 and 2021–22.
Government spending by state and territory
Government spending on aged care for people in the target population varies by the state or territory where services are delivered. Government spending refers to the total spending from the Australian Government and state and territory governments. The aged care target population in this section refers to all people aged 65 and over and First Nations people aged 50–64.
During 2022–23:
- Government spending on residential care per person in the target population was highest in South Australia ($3,896 per person), followed by Victoria ($3,643 per person).
- South Australia had the highest rate of government spending for home care and support ($2,192 per person), followed by Queensland ($2,067 per person).
- The Northern Territory had the lowest rate of government spending on residential care ($1,758 per person) and home care and support ($1,358 per person). However, the rate of government spending on flexible care (which includes a specific program for First Nations people) was highest in the Northern Territory ($1,655 per person).
COVID-19 and government spending
The Australian Government continues to support aged care providers impacted by COVID-19 through specific funding measures. This includes:
- Aged Care Outbreak Management Supplement to contribute to the cost of planning for and managing outbreaks, including COVID-19 and other infectious diseases.
- 2023 COVID-19 Aged Care Support Program Grant to support providers to transition towards managing the costs of COVID-19 outbreaks as part of normal business.
- Commonwealth Home Support Program (CHSP) Ad hoc Proposals Extension for providers to respond to unforeseen and exceptional circumstances.
For further information on government spending in response to COVID-19 outbreaks in aged care, see the Report on the Operation of the Aged Care Act and the Financial Report on the Australian Aged Care Sector.
Where can I find out more?
Related information can be found on other GEN topic pages:
For more information about government spending on aged care, view the Report on the Operation of the Aged Care Act.
For more detailed data tables, view the Report on Government Services.