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A national 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 applicants. Researchers say the findings support closer monitoring of older people’s financial security as aged care reforms and demand for services evolve.
A study of more than 920,000 Australians who applied for aged care between 2010 and 2019 found that government social welfare payments accounted for 84% to 91% of income for most applicants, highlighting questions about how older people will meet care costs as Australia’s population ages. The research, led by Flinders University and the South Australian Health and Medical Research Institute, calls for ongoing monitoring of income support and financial security.
The study examined the financial circumstances, income sources and homeownership of aged care applicants whose average age was 82. Social welfare made up a smaller share—59% of total income—for applicants in the highest income group. The findings were published in the journal Public Health Research & Practice.
The researchers also found that the share of applicants reporting non-government income increased from 12% in 2010 to 30% in 2019. The report says those amounts remained relatively small for most people. About 60% owned their home, a figure the lead author says may mask limited regular income: owning a home does not necessarily make its value available to pay for care.
About 1.5 million people in Australia currently use government-subsidized aged care, including services at home and residential care, according to the source report. The study describes the finances of people who applied for care in an earlier period; it does not establish what all older Australians can afford today or predict future costs.
Income Support and Care Costs
The results matter because many aged care applicants in the study relied heavily on social welfare as their regular income, while homeownership did not necessarily provide cash that could be used to pay for services. That distinction may affect how policymakers assess people’s capacity to contribute to care costs and whether support is accessible to people with limited income.
The issue is relevant as Australia’s older population grows relative to the working-age population and governments continue to reform aged care. The study supports further investigation of how income and financial circumstances affect when people seek care and which services they use. It does not, by itself, measure whether the welfare system can meet future demand or prove that current payments are inadequate.
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Aged Care Reform and Retirement Income
The study is based on records from the Registry of Senior Australians Research Centre and covers aged care applicants from 2010 through 2019. Its findings are now being discussed alongside continuing aged care reforms, including the Support at Home Program, which the source describes as introducing means-testing for nonclinical services delivered at home.
Australia’s retirement income system includes the Age Pension, compulsory superannuation and private savings. The researchers note that compulsory superannuation began in 1992, meaning many people in the study were already late in their working lives when the system was introduced and had fewer years to accumulate contributions. The study’s income figures therefore provide evidence about one cohort, not a complete picture of the finances of future retirees.
“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.”
— Associate Professor Stephanie Harrison, Flinders University and SAHMRI
Questions Beyond the Study Period
The study covers applicants from 2010 to 2019, so it does not show how the finances of current applicants compare with those in the dataset, or whether future retirees will have enough income and savings to meet care costs. The source does not provide a forecast of aged care demand, the future cost of services or the funding required to meet that demand.
It is also not clear from the reported findings how the Support at Home Program’s means-testing will affect access or out-of-pocket costs across different income and asset groups. The study identifies financial patterns but does not evaluate the program or establish that homeownership can or should be used to pay for care.
Monitoring Future Retiree Finances
The researchers call for continued monitoring of older people’s income and financial security as the population and retirement-income mix change. Further research could examine whether income, savings and homeownership are associated with when people enter aged care and the services they receive.
As aged care reforms proceed, information on how means-testing operates in practice may help policymakers assess whether people can access care regardless of their financial circumstances. The supplied report does not give a date for a follow-up study or specify a formal government review timetable.
Key Questions
What did the study find about aged care applicants’ income?
For most applicants in the study, social welfare payments accounted for 84% to 91% of income. In the highest income group, the share was 59%.
How many people and what period did the study cover?
The researchers examined financial information 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 an older person can readily pay for care?
Not necessarily. About 60% of applicants owned a home, but lead author Stephanie Harrison said homeownership may not translate into readily available income for care-related costs.
Does the study show Australia’s welfare system cannot meet future aged care needs?
No. The study describes income among applicants in its 2010–2019 dataset; it does not forecast future demand, costs or the system’s capacity. The researchers call for further monitoring and research.
Why might future retirees have different income sources?
Australia’s compulsory superannuation system began in 1992. The researchers note that many people in the study were near the end of their working lives when it began, while later generations may have had more time to accumulate superannuation.
Source: medicalxpress.com
