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A study of more than 920,000 Australians who applied for aged care from 2010 to 2019 found government social welfare payments accounted for 84% to 91% of income for most applicants. Researchers say ongoing monitoring is needed as aged care reforms and population ageing increase the importance of understanding older people’s financial circumstances.
A study of more than 920,000 Australians who applied for aged care between 2010 and 2019 found that government social welfare payments made up 84% to 91% of income for most applicants. The findings, published by researchers from Flinders University and the South Australian Health and Medical Research Institute (SAHMRI), highlight the need to track whether older people will have stable income to meet care needs as Australia’s population ages.
The study examined the financial circumstances, income sources and homeownership of aged care applicants whose average age was 82. Applicants in the highest income group were an exception: social welfare payments accounted for 59% of their income, a smaller share than in other groups. The research was published in the journal Public Health Research & Practice.
The share of applicants reporting nongovernment income rose from 12% in 2010 to 30% in 2019, but researchers said those amounts remained relatively small for most people. About 60% of applicants owned their home. The study authors said homeownership may coexist with limited regular income, and that a property’s value does not necessarily mean its owner can readily use those resources to pay for care.
Australia has about 1.5 million people using government-subsidized aged care, including home-based and residential services, according to the report. The study concerns people who applied for care in the period examined; it does not establish the financial circumstances of every older Australian or forecast what future applicants will earn.
Income Security Meets Care Costs
The findings matter because access to aged care can depend not only on whether services are available but also on a person’s ability to meet costs. The researchers linked their work to ongoing aged care reforms, including the Support at Home Program, which introduces means-testing for nonclinical services delivered at home. That makes evidence about income and assets relevant to how costs are assessed and whether people can obtain care when they need it.
The study does not show that welfare reliance has prevented applicants from receiving care, nor does it measure the effect of the new program. It does, however, describe a large group of older people whose reported income mostly came from government payments. If regular income remains limited for many applicants, policymakers may need a clearer picture of how fees, eligibility rules and care needs interact. That is a policy concern raised by the research, not a conclusion that the system cannot meet future demand.
For older people and their families, the distinction between owning a home and having income available for ongoing expenses is particularly relevant. Researchers caution that a home may be a substantial asset without being a readily accessible source of money for care-related costs.
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Aged Care Applicants and Retirement Income
Australia’s retirement income system includes the Age Pension, compulsory superannuation and private savings. The study authors note that compulsory superannuation was introduced in 1992. Many of the older people in their sample were already near the end of their working lives when the system began, so they had fewer years in which to build superannuation than later generations may have.
The research comes from the Registry of Senior Australians Research Center and evaluates socioeconomic profiles of people entering long-term care. Its period of analysis ends in 2019, so the figures describe applicants before current aged care reforms and cannot, by themselves, show how those reforms are affecting people now. The authors argue that tracking income and financial security across generations will help clarify whether future retirees have sufficient resources to support their needs.
“This study provides a foundation to support further research into how older people’s income, financial security and other circumstances impact when and how people use aged care.”
— Stephanie Harrison, lead author and associate professor at Flinders University and SAHMRI
What the Study Cannot Establish
The analysis covers applicants from 2010 to 2019, not people entering aged care under the current Support at Home arrangements. It therefore cannot show how the new means-testing rules will affect service use, household finances or access to nonclinical care. The report also does not provide a forecast of future aged care demand or calculate whether government payments and other income will cover future costs.
The source does not specify how income patterns differ by state, care type or particular service costs, and it does not establish whether home-owning applicants could or would use housing wealth to pay for care. Those questions require further research. The study’s findings describe reported income and ownership among its applicant group; they should not be read as a measure of every older person’s financial position.
Monitoring Future Retiree Resources
The researchers call for continued monitoring of older people’s income, financial security and circumstances as later generations retire. Further work could help establish whether superannuation and other nongovernment income are becoming more substantial, and how those resources relate to the timing and type of aged care people use.
As the Support at Home Program proceeds, evidence on how means-testing works in practice will be needed to assess its effects. The study does not set out a timetable for future research or a specific next policy decision. Its immediate contribution is a national picture of applicants before the latest reforms and a call to keep measuring whether older Australians can access suitable care regardless of their financial circumstances.
Key Questions
What did the study find about aged care applicants’ income?
For most older Australians who applied for aged care from 2010 to 2019, social welfare payments made up 84% to 91% of reported income. In the highest income group, the share was 59%.
How many people were included in the research?
The researchers examined the financial circumstances of more than 920,000 aged care applicants. Their average age was 82.
Does the study show that Australia’s aged care system cannot meet future needs?
No. The study documents income and homeownership among applicants in 2010–2019; it does not forecast future demand or determine whether the system can meet it. The authors call for ongoing monitoring of older people’s financial security.
Why does homeownership matter in the findings?
About 60% of applicants owned a home, but the researchers cautioned that owning property does not necessarily provide regular or readily available money for care-related costs.
What is the connection to the Support at Home Program?
The program introduces means-testing for nonclinical services at home. The researchers say their findings are relevant to aged care reforms, but the study predates the program and does not measure its effects.
Source: medicalxpress.com
