Aged care watchdog says co-payments and delays push users into nursing homes

Australia's outgoing aged care inspector-general said the rollout of the new aged care system is pushing older people into nursing homes earlier than necessary. She cited user co-payments, long wait times for home care packages, and system complexity as factors that increase costs for taxpayers.

The inspector-general argued that the current design of home care co-payments places the greatest burden on pensioners, who are the highest users of the system. She said people often forgo services such as cleaning, gardening, and social activities when required to pay between 5 per cent and 80 per cent of the costs.

Home care versus residential care costs Residential aged care costs the government an average of $123,000 per person each year, compared with an average of $30,000 for home care, the inspector-general said. She warned that long queues for home care packages have become the greatest risk to the budget because people who delay care often return later with higher needs.

More than 200,000 people are now waiting for home care packages, she said. When they eventually receive care, it is often more expensive than if they had been supported at home earlier.

Government response and reforms The new aged care system began last October.

It requires wealthier users to make co-contributions for non-clinical services while the government fully funds clinical care. The government has already adjusted the model to cover showering, dressing, and continence care after reports that some people were skipping these services.

Aged Care Minister Sam Rae said the reforms have tripled the number of older Australians with home care packages since 2020. He said the system is on a stronger, more sustainable footing and that work will continue to strengthen it. The inspector-general called for a broader reset of the co-payment model.