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Spending on aged care

Allocation of government expenditure

Governments fund different types of aged care services and support programs. Government expenditure refers to the total spending from the Australian Government and state and territory governments. The majority of government expenditure (99%) on aged care comes from the Australian Government.

Note, the terms of ‘spending’ and ‘expenditure’ are used interchangeably on this page. 

In 2023–24 (based on Report on Government Services 2025: Part F, Section 14, Aged care services):

  • Governments spent $36.4 billion on aged care services, with the largest proportion (59%) spent on residential care services. The remaining funds were spent on home care and support services (32%), flexible care services (3.0%) and other aged care services, including workforce and service improvement, and assessment and information services (6.3%).
  • The $21.5 billion expenditure on residential care services was almost double the amount spent on home care and support services ($11.5 billion) – comprised of $3.0 billion on home support (Commonwealth Home Support Programme), $7.5 billion on home care (Home Care Packages Program), $0.5 billion on other home care and support, and $0.4 billion on other community care services, which includes the Department of Veterans’ Affairs community nursing and Veterans’ Home Care (VHC) programs.

 

Figure 1: Government expenditure on aged care services, 2023–24

Bar chart shows the amount of government expenditure on aged care services (home care and support, residential care, flexible care and other aged care services) in 2023–24.

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, Disability and Ageing website.

Government expenditure by states and territories

Government expenditure on aged care services for people in the target population varies across the states and territories where these services are delivered. Government expenditure refers to the total spending from the Australian Government and state and territory governments. In this section, the aged care target population refers to all people aged 65 and over and Aboriginal and Torres Strait Islander (First Nations) people aged 50–64.

In 2023–24 (based on Report on Government Services 2025: Part F, Section 14, Aged care services):

  • government expenditure on residential and flexible care services per person in target population was highest in South Australia ($5,100 per person) and lowest in Australian Capital Territory ($3,900 per person)
  • government expenditure on home care and support services per person in target population was highest in South Australia ($2,600 per person) and lowest in Northern Territory ($1,700 per person).

 

Figure 2: Government expenditure on aged care services per person in target population by states and territories, 2023–24

Stacked bar chart shows government expenditure per person on aged care services in all people aged 65 and over and First Nations people aged 50–64 by expenditure type and state/territory in 2023–24.

Government expenditure over time

A number of aged care reforms and changes were implemented between 2015 and 2017. This includes introduction of the Short-Term Restorative Care (STRC) Programme, rollout and expansion of the Commonwealth Home Support Programme (CHSP), and changes to the Home Care Packages (HCP) Program.

To improve comparability, we only report trend data for expenditure between 2017–18 and 2023–24 (where data are available).

Aged care spending patterns, and spending per person in the target population, have changed during the reporting period. Government expenditure refers to the total spending from the Australian Government and state and territory governments, and time series expenditure data have been adjusted for inflation. In this section, the aged care target population refers to all people aged 65 and over and Aboriginal and Torres Strait Islander (First Nations) people aged 50–64

Between 2017–18 and 2023–24 (based on Report on Government Services 2025: Part F, Section 14, Aged care services):

  • total government expenditure (for all aged care services) increased by 64% (from $22.1 billion to $36.4 billion), while the expenditure per person in the target population increased by 36% (from $5,500 to $7,500 per person)
  • government expenditure on residential and flexible care services increased by 44% (from $15.7 billion to $22.6 billion), and the expenditure per person in the target population increased by 19% (from $3,900 to $4,600 per person)
  • government expenditure on home care and support services almost doubled from $6.1 billion to $11.5 billion (an 89% increase), and the expenditure per person in the target population increased by 57% (from $1,500 to $2,300 per person).

 

Figure 3: Government expenditure on aged care services, 2017–18 to 2023–24

Line chart shows total government expenditure and expenditure per person on aged care in all people aged 65 and over and First Nations people aged 50–64 by expenditure type from 2017–18 to 2023–24.

Care recipient contributions

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.

In 2022–23:

  • home care recipients contributed $167 million to the cost of their care, accounting for 2.9% of the total revenue received by home care providers
  • residential care recipients contributed $6.1 billion to the cost of their care, representing 25% of the total revenue received by residential care providers.

Between 2017–18 and 2022–23:

  • contributions from home care recipients decreased by 21% (from $122 million to $96 million) between 2017–18 and 2020–21, and then increased sharply in the following 2 years to 2022–23 (a 16% increase between 2020–21 and 2021–22 and a 50% increase between 2021–22 and 2022–23)
  • contributions from residential care recipients have increased by 36% from $4.5 billion to $6.1 billion, with the largest increase occuring between 2017–18 and 2018–19 (a 15% increase), followed by a 10% increase between 2021–22 and 2022–23
  • as a share of total revenue, contributions from care recipients decreased for both home care providers (from 5.7% in 2017–18 to 2.9% in 2023–24) and residential care providers (from 27% in 2017–18 to 25% in 2023–24).

 

Figure 4: Revenue for home care and residential care providers, 2017–18 to 2022–23

Line chart shows revenue contributed from care recipients and government and other sources for home care and residential care providers between 2017–18 and 2022–23.

COVID-19 and government expenditure

The Australian Government continues to support aged care providers impacted by COVID-19 through specific funding measures. This includes:

  • Aged Care Outbreak Management Support Supplement to contribute to the cost of planning for and managing outbreaks, including COVID-19 and other infectious diseases.
  • Surge workforce program to help eligible aged care homes manage COVID-19 outbreaks and maintain high-quality, safe care for residents. Surge workers can be quickly placed when all other avenues for staffing have been exhausted.
  • 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.

For information on the financial performance of the aged care sector, view the Financial Report on the Australian Aged Care Sector and the Quarterly Financial Snapshot of the Aged Care Sector.