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Spending on aged care

Australian aged care services operate through a combination of government (federal, state, territory and local), non-government (charities, religious and community groups), and personal financial contributions.

Last updated: 27 April 2021

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For a downloadable summary of the information in this topic, view the Spending in aged care factsheet.

Related information can be found on other GEN topic pages: For more information about Government spending in aged care, view the Report on the Operation of the Aged Care Act.
For more detailed data tables, view the Report on Government Services.

 

Allocation of government spending

Government spending referred to in this webpage is the total spending from both Australian Government and state and territory governments. The majority of this government spending (98%) comes from the Australian Government. These data have been sourced from the Report on Government Services (RoGS 2021).

During 2019–20:
  • Governments spent over $21.5 billion on aged care, with nearly two-thirds (63%) spent on residential aged care. The remaining funds were spent on home care and support (31%) and on other care, including flexible care, workforce and service improvement, and assessment and information services (5%).
  • The $13.6 billion expenditure on residential aged care was double the amount spent on home care and support—comprising home care ($3.7 billion), home support ($2.8 billion) and other community care services ($0.2 billion), which includes the Department of Veterans’ Affairs home care and community nursing programs.
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The aged care system offers a continuum of care under three main types of service (for more information on any of these services see the Report on the Operation of the Aged Care Act):
  • Home support (Commonwealth Home Support Programme), which provides entry-level services focussed 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 aged 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 available that extend across the spectrum from home support to residential aged care:
  • Transition care, which provides short-term care to restore independent living after a hospital stay
  • Short-term restorative care, which expands on transition care to include anyone whose capacity to live independently is at risk
  • Multi-purpose services, which offer 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.
 
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 website.
A bar graph shows government spending on aged care services by spending type. The greatest spending was allocated to residential care ($13.6 million), which accounted for 63.3 per cent of total government spending on aged care services.

Government spending over time

During the 5 years between 2015–16 and 2019–20, spending patterns on aged care services have changed. For example, spending on community-based aged care services (including home care and home support) increased by a larger proportion than spending on residential aged care services. (Note: Time series data in this topic have been adjusted for inflation).

During 2019–20:
  • Government spending on aged care services was 26% higher than it was during 2015–16, resulting from annual spending increases across this period.
  • Spending for home care and support services was 47% higher than it was during 2015–16, compared with 18% higher for residential aged care services.  
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A stacked bar graph shows government spending on aged care services by spending type over time (2015–16 to 2019–20). Government spending on aged care services has progressively increased between 2015–16 and 2019–20. Since 2015–16, government spending on home care and support services has increased by 47 per cent. Government spending on residential aged care services has also increased by 18 per cent.

Consumer 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 government and consumer contributions to aged care services is provided up to 2018–19 by the Aged Care Financing Authority. More information on consumer spending can be found on the Aged Care Financing Authority website and the My Aged Care website.

Overall, during 2018–19:
  • Contributions from residents (excluding lump sum deposits) represented 27% of total residential care provider revenue (it was 28% in 2014–15).
  • People using home care packages contributed $107 million, which represented 4% of home care provider revenue (down from 9% in 2014–15).
  • People using home support contributed $252 million, which represented 9% of total spending on home support (it was 8% in 2016–17).
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A bar graph shows the financial contributions of government and aged care consumers over time (2014–15 to 2018–19). Contributions from aged care consumers represented 27 per cent of total residential care provider revenue, 4 per cent of home care providers’ revenue, and 9 per cent of spending on home support in 2018–19.

Government spending by state and territory

Australian and state and territory government spending varies. The amount spent on aged care services per person in the target population (that is, all people aged 65 years and over and Aboriginal and Torres Strait Islander Australians aged 50–64 years) differed by spending type and state and territory.

During 2019–20:
  • Spending on residential aged care was highest in South Australia ($3,556 per person), followed by Victoria ($3,489 per person).
  • The Australian Capital Territory and the Northern Territory had the highest rates of government spending for home care and support ($2,464 and $2,431 per person respectively), followed by Western Australia ($1,827 per person).
  • The rate of government spending on flexible care (which includes a specific program for Indigenous Australians) was highest in the Northern Territory ($887 per person).
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A stacked bar graph shows government spending on different types of aged care services per person in the target population by state and territory. National spending on aged care services was $5,063 per person. The graph shows that government spending and spending allocations per person in the target population varied by state and territory. The Australian Capital Territory, Victoria and South Australia had the highest expenditure on aged care services per person in the target population, and Tasmania had the lowest overall expenditure per person in the target population.

COVID-19 and government spending

Australia has faced significant challenges during the COVID-19 pandemic. COVID-19 illness can be more serious for people who have pre-existing health conditions, including older Australians.

By May 2020, the Australian Government had announced more than $850 million in COVID-19-specific support to the aged care sector. A number of these measures will continue into 2020–21, along with further supports for the sector.

For a breakdown on Government spending and the COVID-19 pandemic, see the Report on the Operation of the Aged Care Act


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