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A study of more than 920,000 Australians who applied for aged care from 2010 to 2019 found social welfare payments accounted for 84% to 91% of income for most groups. Researchers say continued monitoring is needed to understand whether older people can afford care as the population ages and aged care rules change.
A study of more than 920,000 Australians who applied for aged care between 2010 and 2019 found that social welfare payments made up 84% to 91% of income for most groups, highlighting questions about how older people will meet care costs as the population ages. Researchers from Flinders University and the South Australian Health and Medical Research Institute say more monitoring is needed to assess the adequacy and stability of income support.
Published in Public Health Research & Practice, the analysis used information from South Australia’s Registry of Senior Australians. Applicants had an average age of 82. The study examined their financial circumstances, income sources and homeownership. The reported share of income from welfare varied across income groups; in the highest income group, it was 59%, lower than for other groups.
The researchers also found that the proportion of applicants reporting non-government income rose from 12% in 2010 to 30% in 2019. The report says those amounts remained relatively small for most people. Around 60% owned their own home, but the authors caution that ownership does not necessarily provide accessible cash for care-related expenses.
About 1.5 million people currently use government-subsidized aged care in Australia, including home-based and residential services, according to the source report. The study focuses on people applying for care, rather than all older Australians, and its findings describe the cohort and period examined.
Income Security as Care Reforms Begin
The findings matter because a large share of aged care applicants relied mainly on government payments, while reforms are changing how some care costs are assessed. The source report says the Support at Home Program introduces means-testing for nonclinical services delivered at home. How income and assets are measured may affect what people pay and how readily they can access support.
Researchers say the results point to a potential gap between asset ownership and day-to-day financial capacity. A person may own a home yet have limited regular income, and the home may not be easily converted into money for care. That distinction is relevant to policymakers considering whether support is accessible and equitable, but the study does not itself measure the effects of the new program or establish how many people will struggle to pay.
The broader pressure is demographic: as the number of older people grows relative to the working-age population, governments face questions about the sustainability and design of income support and care. The study provides evidence about the finances of people entering the aged care system; it is not a forecast of future demand or a direct assessment of whether the system can meet it.
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A Cohort Shaped by Superannuation Timing
Australia’s retirement income system includes the Age Pension, compulsory superannuation and private savings. Compulsory superannuation was introduced in 1992. Many people in the study were already near the end of their working lives when the scheme began, so they had fewer years in which to accumulate contributions than later generations may have.
The analysis covers applicants from 2010 through 2019, not people entering care under today’s arrangements. Its results therefore offer a historical baseline rather than a current snapshot of every older person’s finances. The increase in applicants reporting non-government income over that period is a change in the share reporting such income; the source does not say that the amounts grew by a particular multiplier.
Lead author Associate Professor Stephanie Harrison, of Flinders University and SAHMRI, said the research was intended to support further work on how financial circumstances affect when and how older people use care. The report links that need to ongoing aged care reforms, including the Support at Home Program.
“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 findings do not show whether Australia’s aged care system can meet future demand, nor do they predict the finances of future applicants. The analysis covers a defined group of people who applied for care from 2010 to 2019; its results should not be treated as a profile of all older Australians or of current applicants.
The source does not provide a detailed breakdown here of welfare-payment types, the amounts of income received, or how costs varied by care setting. It also does not establish how the Support at Home Program will affect people’s out-of-pocket expenses or access to services. Whether later generations will have greater superannuation balances and enough income for care remains an open question.
Monitoring Future Retirement Incomes
The researchers call for continued monitoring of older people’s income and financial circumstances, particularly as future generations reach retirement with different exposure to compulsory superannuation. Further analysis could help clarify how income, assets and care costs relate to when people seek services and what support they can use.
The aged care reforms, including the Support at Home Program’s means-testing for nonclinical home services, provide an immediate policy setting in which those questions matter. The study does not specify a next publication date or evaluate the program’s results. For now, the key next step identified by the authors is to gather evidence on whether income support and retirement resources remain adequate and accessible as care needs change.
Key Questions
What did the study find about aged care applicants’ income?
For most income groups in the study, social welfare payments accounted for 84% to 91% of income. In the highest income group, the share was 59%.
Who was included in the research?
The study examined financial circumstances, income sources and homeownership for more than 920,000 people who applied for aged care between 2010 and 2019. Their average age was 82.
Does owning a home mean someone can readily pay for care?
Not necessarily. Around 60% of the applicants owned a home, but the researchers say homeownership may not provide readily available money for care-related costs. The study does not quantify how many people faced this difficulty.
Does this research show whether Australia can handle future aged care demand?
No. It describes the finances of aged care applicants during 2010–2019, rather than forecasting future demand or testing the capacity of the care system. The authors call for ongoing monitoring of future retirees’ income and access to care.
What is the Support at Home Program’s relevance to the findings?
The source report says the program introduces means-testing for nonclinical services at home. The study does not measure the program’s effects, but its findings make older people’s income and accessible resources relevant to assessing how reforms work.
Source: medicalxpress.com
