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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 continued monitoring is needed to assess whether future retirees will have enough stable income to meet care costs, particularly as aged care reforms introduce means-testing for some at-home services.
A study of more than 920,000 older Australians who applied for aged care between 2010 and 2019 found that social welfare payments made up 84% to 91% of income for most applicants, highlighting questions about income security as the country’s aged care needs grow. Researchers from Flinders University and the South Australian Health and Medical Research Institute say further monitoring is needed to understand whether older people can afford care as services and eligibility arrangements change.
Published in Public Health Research & Practice, the study examined applicants with an average age of 82, including their finances, income sources and homeownership. The researchers found that social welfare formed a smaller share of income for people in the highest income group, where it accounted for 59%. The report says nine in 10 older Australians applying for aged care receive social welfare payments.
About 60% of the people studied owned their homes, but the researchers caution that owning a home does not necessarily mean having readily available money for care. Lead author Stephanie Harrison said many older people may be “asset-rich, but income-poor,” with limited regular income despite holding a valuable asset. The study does not establish how much individual applicants could afford to pay for care.
The share of applicants reporting nongovernment income rose from 12% in 2010 to 30% in 2019, according to the study. However, researchers said those amounts remained relatively small for most people. The figures describe the study population and period; they do not establish the income profile of all older Australians today.
Income Security as Care Needs Grow
The findings matter because the ability to access care can depend on more than whether a person owns assets: regular income and financial security may shape when and how they use services. The researchers say understanding those circumstances can help inform aged care services that are accessible and equitable, including for people who cannot readily turn a home or other assets into cash.
The report also comes as Australia’s population ages and the ratio of older people to the working-age population grows. Around 1.5 million people currently use government-subsidized aged care, including home and residential services, according to the source report. The study does not forecast future demand or prove that the welfare system will be unable to meet it; it identifies income dependence among applicants and a need for continued assessment.
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Aged Care Reform Meets Retirement Income
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 of the older people in their study had fewer years of contributions during their working lives than later generations may have.
The study’s findings are relevant to ongoing aged care changes, including the Support at Home Program, which introduces means-testing for nonclinical services delivered at home. The research provides a profile of people applying for care in 2010–2019, rather than a direct evaluation of the program or an assessment of how its rules will affect particular households.
“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
Future Retirees’ Resources Remain Unknown
The study covers aged care applicants from 2010 to 2019; it does not show whether the same income patterns hold among applicants now or how they will change in coming decades. It also does not establish whether future retirees will have enough superannuation, private income or other resources to meet care costs.
The report does not quantify the effect of Support at Home’s means-testing on access, out-of-pocket costs or care decisions. Nor does it show how many homeowners could draw on their housing wealth to pay for services. Those outcomes will require further evidence and monitoring, the researchers say.
Track Income and Reform Outcomes
The researchers call for ongoing monitoring of older people’s income and financial circumstances, including superannuation and other nongovernment income, as future generations enter retirement. Further research could examine how those resources relate to the timing and type of care people use.
As Support at Home proceeds, evidence about how means-testing affects access to nonclinical services will help clarify whether people with limited regular income can obtain care when needed. The published study does not set out a specific next publication date or policy decision, so the timing of further research and any changes informed by it remains unclear.
Key Questions
What did the study find about aged care applicants’ income?
For most applicants studied, social welfare payments made up 84% to 91% of income. In the highest income group, the share was 59%.
How many people were included, and when did they apply?
The researchers examined 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 afford aged care?
Not necessarily. About 60% of the study group owned a home, but the researchers said homeownership may not provide readily available income for care-related costs.
Does the study show Australia’s welfare system cannot meet future aged care needs?
No. It describes applicants’ income and assets in 2010–2019 and calls for further monitoring. It does not forecast future demand or conclude that the system will fail.
What aged care change is relevant to the findings?
The report points to the Support at Home Program, which introduces means-testing for nonclinical services at home. The study does not measure the program’s effects on access or costs.
Source: medicalxpress.com
