Australia Long Term Care Market Overview, 2031

Key Insights

• Australia's aged care system is a $40 billion sector serving more than one million older Australians each year. The Australian Government spent $39.2 billion on aged care during FY2025, representing an increase of 9.6% compared to FY2024. Residential aged care received the largest share at $24 billion, accounting for 60% of total government aged care expenditure.
• Australia's population is ageing rapidly. At 30 June 2025, the population aged 85 and above reached 607,000 and is projected to reach one million by 2035. One in five Australians will be over 65 within a decade. The number of people aged 85 and above has more than doubled since 2005 and is projected to grow by another 60% by 2036. This rapid demographic shift creates sustained and intensifying demand for long-term care services across all care settings.
• Australia's aged care infrastructure comprises 236,894 operational residential and flexible aged care places at 30 June 2025, an increase of only 917 places from the previous year. Home Care Packages rose to 292,911, an increase of 17,425. The Commonwealth Home Support Programme supported 838,694 clients on $3.3 billion in funding. Residential occupancy sits at 89.9% according to official figures, though operators report occupancy rates of 95% and upwards on the ground, reflecting the chronic shortage of residential aged care places.
• The residential aged care sector delivered only 800 extra beds during 2024-25, despite 5,000 new residents accessing aged care services every year since 2022-23. Construction of new beds is languishing, consumers are waiting up to a year for home care, and the new Single Assessment system, implemented on 1 January 2025, has failed to keep pace with need. The sector faces a capacity crisis as demand continues to outstrip supply.
• Australia has implemented the biggest aged care reforms in a generation, with the new Aged Care Act 2024 and the Support at Home program commencing on 1 November 2025. The reforms include an $18 billion investment to deliver award wage increases for aged care workers. The new Act enshrines the rights of older people and establishes a new regulatory model for the sector.

Market Outlook

• According to the research report, "Australia Long Term Care Market Overview, 2031," published by Bonafide Research, the Australia Long Term Care Market was valued at more than USD 19 Billion in 2025. This market is supported by accelerating demographic aging, the generational reforms under the new Aged Care Act, and the ongoing expansion of home- and community-based care services.
• Australia's demographic trajectory is the primary driver of long-term care demand. The population aged 85 and above reached 607,000 at 30 June 2025 and is projected to reach one million by 2035. One in five Australians will be over 65 within a decade. The number of people aged 85 and above is projected to grow by another 60% by 2036. This rapid demographic shift will continue to drive demand for aged care services across all care settings. Demand for in-home care has more than doubled in the last five years to an anticipated 320,000 people by October 2025, compared to around 155,000 home care packages in 2020.
• The aged care sector is undergoing significant transformation under the new Aged Care Act and Support at Home program. The 2025–26 Budget invests $2.9 billion in the Australian aged care sector to deliver safe, high-quality aged care for all older people. An additional $2.6 billion has been allocated for the Fair Work Commission Aged Care Work Value Case to support aged care nurses. The Government has also committed $947.8 million over two years from 2025-26, which includes 20,000 additional Home Care Packages released by 31 October 2025 and 63,000 Support at Home places to be released by 30 June 2026.
• The home and community-based care sectors are expected to continue their rapid expansion. The Commonwealth Home Support Programme supported 838,694 clients on $3.3 billion in funding in 2025. The Support at Home program, which replaced the Home Care Packages Program on 1 November 2025, is designed to help 1.4 million older Australians stay healthy, active, and connected in their own homes for longer. However, the home care waiting list has surged past 120,000, reflecting the significant unmet demand for home-based care.
• The residential aged care sector continues to experience capacity pressures. Residential occupancy rates reached 94.4% in June 2025 and are expected to remain high for the next five to ten years as demand continues to exceed supply. Only 917 new places were added in 2024-25, and construction of new beds is languishing. The Government has announced plans to invest $1.7 billion to incentivise construction of up to 5,000 aged care beds a year.

Market Dynamics

Driver: Accelerated Demographic Aging and Rising Care Dependency Australia is undergoing a profound demographic transformation that is fundamentally reshaping the long-term care landscape. The population aged 85 and above reached 607,000 at 30 June 2025 and is projected to reach one million by 2035. One in five Australians will be over 65 within a decade. The number of people aged 85 and above has more than doubled since 2005 and is projected to grow by another 60% by 2036. The 85+ age group has the highest per capita utilization of long-term care services, and its rapid growth creates sustained demand across all care settings. The prevalence of dementia and chronic conditions among older Australians is also rising significantly, with dementia support services feeling the strain hardest. Dementia Behaviour Management Advisory Services cases rose 19%, while Severe Behaviour Response Teams cases climbed 22%. This demographic shift, combined with the increasing complexity of care needs, creates sustained and intensifying demand for long-term care services across home healthcare, community care, residential care, and assisted living settings. Demand for in-home care has more than doubled in the last five years to an anticipated 320,000 people by October 2025.

Challenge: Capacity Crisis and Workforce Shortages Australia's long-term care market faces a critical capacity crisis and workforce shortage that threaten the sustainability of the system. The residential aged care sector delivered only 800 extra beds during 2024-25, despite 5,000 new residents accessing aged care services every year since 2022-23. At 30 June 2025, Australia had only 236,894 operational residential and flexible aged care places an increase of just 917 places from the previous year. Construction of new beds is languishing, consumers are waiting up to a year for home care, and the new Single Assessment system has failed to keep pace with need. The workforce shortage is equally severe. Despite $2.6 billion in Fair Work Commission wage increases for aged care nurses, nearly 120,000 more staff will be needed by 2035/36, including nurses, nurse practitioners and personal care workers. The Aged Care Industry Labour Agreement program has fallen well short, with only 249 overseas recruits arriving since May 2023 and just 137 agreements in effect as of August 2025. The average occupancy rate of 90.9% and high demand for places mean many operators are running at or near capacity. The capacity crisis is acute, with consumers waiting up to a year for home care. Without significant investment in workforce recruitment, training, compensation, and infrastructure expansion, Australia's long-term care system will face increasing difficulty in meeting growing demand, potentially leading to access constraints and service disruptions.

Trend: Generational Reform and Shift Toward Home and Community-Based Care • A fundamental shift in long-term care delivery is occurring in Australia, with services increasingly being delivered in home and community settings rather than institutional facilities. The new Aged Care Act 2024 and the Support at Home program, which commenced on 1 November 2025, represent the biggest aged care reforms in a generation. Support at Home is designed to help 1.4 million older Australians stay healthy, active, and connected in their own homes for longer. It replaces the Home Care Packages Program, while the Commonwealth Home Support Programme will continue until at least July 2027. The reforms are supported by an $18 billion investment to deliver award wage increases for aged care workers and a $2.9 billion Budget investment. The new Act enshrines the rights of older people, establishes a new regulatory model, strengthened Aged Care Quality Standards, and a new aged care funding model. The Support at Home program will release 63,000 places by 30 June 2026. The shift toward home and community-based care is driven by the strong preference of older Australians to age in place, the relative cost-effectiveness of home care compared to institutional care, and government policies promoting community-based care. However, the home care sector faces significant capacity constraints, with the waiting list for home care surging past 121,909, up 26% in just three months.

Policies

• The new Aged Care Act 2024 commenced on 1 November 2025, representing the most significant reform to aged care in decades. The Act enshrines the rights of older people in law, establishes a new regulatory model, strengthens Aged Care Quality Standards, and implements a new aged care funding model. The Act introduces a rights-based framework, with older people having explicit rights when accessing aged care services and pathways to ensure they are upheld. People under the age of 65 can only access Australian Government-funded aged care services if they have care needs and meet specific criteria.
• The Support at Home program commenced on 1 November 2025, replacing the Home Care Packages Program and Short-Term Restorative Care Programme. The program is designed to help 1.4 million older Australians stay healthy, active, and connected in their own homes for longer. The Government will release 63,000 Support at Home places by 30 June 2026. The Commonwealth Home Support Programme will continue until at least July 2027.
• The 2025–26 Budget invests $2.9 billion in the Australian aged care sector. This includes $2.6 billion for the Fair Work Commission Aged Care Work Value Case to support aged care nurses, $4.0 million to expand the aged care surge workforce support, $48.7 million to support assessment providers implementing the new Act and Support at Home, and $4.5 million for the Single Assessment System.
• The Government has increased the Australian National Aged Care Classification (AN-ACC) price to $295.64 per resident, per day from 1 October 2025, providing more essential support for the over 200,000 older people in residential aged care. The hotelling supplement increased by 42% from $15.60 to $22.15 per resident, per day from 20 September 2025.
• The Government has committed $18 billion to deliver award wage increases for aged care workers. The 2025-26 Budget includes $2.6 billion for future pay rises for registered and enrolled aged care nurses. The Government has also announced a Regional, Rural and Remote Home Care Workforce Support Program to add an extra 4,000 home care workers over three years in areas where workforce shortages are the most acute.
• The AN-ACC Transition Fund has been extended for another 12 months to support smaller providers, especially those in remote and regional communities. The Government has also announced a $947.8 million investment over two years from 2025-26, which includes 20,000 additional Home Care Packages released by 31 October 2025 and 63,000 Support at Home places to be released by 30 June 2026.

Segment Analysis

Australia Long-Term Care Market By Service Type • Home Healthcare: Home healthcare represents the largest and fastest-growing service segment in Australia's long-term care market. The Commonwealth Home Support Programme supported 838,694 clients on $3.3 billion in funding in 2025. Home Care Packages rose to 292,911, an increase of 17,425. The Support at Home program, which commenced on 1 November 2025, will release 63,000 places by 30 June 2026. Demand for in-home care has more than doubled in the last five years to an anticipated 320,000 people. However, the home care waiting list has surged past 121,909, up 26% in just three months, reflecting the significant unmet demand for home-based care. The home care market is now worth $9.8 billion. Home healthcare includes personal care, nursing care, medication management, and support services delivered in the patient's home. The segment is driven by the strong preference of older Australians to age in place and government policies promoting home and community-based care.
• Nursing Care / Skilled Nursing Facilities: The nursing facility sector in Australia comprises residential aged care homes providing 24-hour nursing care, medical supervision, and personal assistance for elderly individuals with high care needs. At 30 June 2025, Australia had 236,894 operational residential and flexible aged care places. The sector delivered only 800 extra beds during 2024-25, despite 5,000 new residents accessing aged care services every year since 2022-23. Residential occupancy rates reached 94.4% in June 2025 and are expected to remain high for the next five to ten years. The average occupancy rate is 90.9%. Over a third of providers remain unprofitable. The Government plans to invest $1.7 billion to incentivise construction of up to 5,000 aged care beds a year. Nursing facilities provide essential services for the most vulnerable older Australians, with over 200,000 older people in residential aged care.
• Assisted Living Facilities: Assisted living represents a growing segment in Australia's long-term care market, encompassing retirement living communities, independent living units, and serviced apartments for older Australians. The Australia Senior Living Market was valued at AUD 7.08 Billion in 2025 and is projected to reach AUD 13.20 Billion by 2034, rising at a CAGR of 6.43%. The sector provides housing and support services for older Australians who require some assistance with daily activities but do not need 24-hour nursing care. The assisted living sector is expanding, particularly in major metropolitan areas, as the population ages and demand for retirement living options increases. Major developers are entering the senior living space, with new retirement villages and independent living communities being developed across the country.
• Hospice and Palliative Care: Hospice and palliative care services in Australia are delivered across multiple settings, including homes, residential aged care facilities, hospitals, and dedicated palliative care units. The Support at Home program includes a new End of Life Care Pathway offering up to $25,000 for older people with a life expectancy of less than three months. Dementia support services are feeling the strain hardest, with Dementia Behaviour Management Advisory Services cases rising 19% and Severe Behaviour Response Teams cases climbing 22%. The growing prevalence of dementia and chronic conditions among older Australians is driving demand for end-of-life care services. The National Centre for Monitoring Dementia has received $5.7 million for dementia data projects to inform effective planning and service delivery.
• Other Services: This segment includes day care services, short-term respite care, community-based support services, and specialist services for younger people with disabilities. The Commonwealth Home Support Programme provides a wide range of community-based services including social support, domestic assistance, personal care, and respite care. The Support at Home program offers preventive care with upfront funding and a Restorative Care Pathway. The need for these services is growing as the population ages and as families seek alternatives to full-time institutional care.

Australia Long-Term Care Market By Payer Type • Public: Public sources are the dominant payer for long-term care services in Australia, primarily through the Australian Government's aged care funding programs. The Australian Government spent $39.2 billion on aged care during FY2025, representing an increase of 9.6% compared to FY2024. Residential aged care received the largest share at $24 billion, accounting for 60% of total government aged care expenditure. The 2025–26 Budget invests an additional $2.9 billion in the sector. Public payers represent both the largest payer segment and the foundation of Australia's long-term care financing system.
• Private: Private sources account for a significant and growing portion of long-term care spending in Australia through user co-payments, accommodation fees, and private health insurance. The Australia Senior Living Market, which is predominantly private-pay, was valued at AUD 7.08 Billion in 2025. Residential aged care providers charge accommodation fees, with lifetime caps set at $135,318.69. Private health insurance provides supplementary coverage for some aged care services. The private sector is expected to grow as demand for premium services and accommodation increases.
• Out-of-Pocket: Out-of-pocket payments represent a substantial component of long-term care spending in Australia. Residential aged care residents pay fees and charges including accommodation costs, with lifetime caps of $135,318.69. The hotelling contribution is $22.15 per day and the non-clinical care contribution is $105.30 per day. Home care recipients are required to contribute to the cost of their care through income-tested fees. Out-of-pocket costs vary significantly by service type, facility, and location. The financial burden on households is substantial and growing as the population ages and care costs rise.

Australia Long-Term Care Market By Gender • Female residents account for the largest share of Australia's long-term care spending, driven by higher life expectancy and higher rates of disability in advanced age. Women are more likely to reach advanced ages where care dependency is highest. The feminisation of ageing means women significantly outnumber men in the 85+ age group, which has the highest per capita care utilization. Women are more likely to live alone in old age, increasing their reliance on formal paid care services. The long-term care workforce is predominantly female, with the majority of personal care workers, enrolled nurses, and registered nurses being women.
• Male residents account for a smaller but growing share of Australia's long-term care spending. Men are more likely to need long-term care at younger ages due to disabilities and chronic conditions. As male life expectancy increases, the representation of men in the older adult cohort is slowly growing. The gender gap is gradually narrowing as male life expectancy increases.

Australia Long-Term Care Market Economics

• The cost of long-term care services varies significantly by service type, geographic location, and facility type. The Australian Government spent $39.2 billion on aged care during FY2025, representing 9.6% of total government expenditure. The AN-ACC price is $295.64 per resident, per day, with the hotelling supplement at $22.15 per day and the non-clinical care contribution at $105.30 per day. The lifetime cap for accommodation fees is $135,318.69. The home care market is now worth $9.8 billion.
• Public financing of long-term care is substantial and growing. The 2025–26 Budget invests $2.9 billion in the aged care sector. Residential aged care received $24 billion in FY2025, a 12.8% increase. The Government has committed $18 billion to deliver award wage increases for aged care workers and $2.6 billion for future pay rises for aged care nurses.
• Staffing costs represent the largest operating expense for all long-term care providers. The sector faces a severe workforce shortage, with nearly 120,000 more staff needed by 2035/36. Despite significant wage increases, recruitment and retention remain challenging. The Aged Care Industry Labour Agreement program has brought only 249 overseas recruits since May 2023.
• The economic value of home- and community-based services relative to institutional care is a key policy consideration. Home care is generally less expensive than institutional care on a per-patient basis, and the shift toward home care is expected to continue. The Support at Home program will release 63,000 places by 30 June 2026.


Considered in this report
• Historic Year: 2020
• Base year: 2025
• Estimated year: 2026
• Forecast year: 2031

Aspects covered in this report
• Long-term care Market with its value and forecast along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

By Service Type
• Home Healthcare
• Nursing Care / Skilled Nursing Facilities: 
• Assisted Living Facilities
• Hospice & Palliative Care:
• Other Services

By Payer Type
• Public
• Private
• Out-of-Pocket

By Gender
• Male
• Female