Addressing the demand for residential aged care

Australia’s aged care sector is under increasing pressure, and we are calling for urgent action to make sure older Australians continue to receive the care and dignity they deserve — particularly those who rely on concessional residential aged care.

Recent figures show occupancy in aged care homes is nearing capacity, with many providers struggling to keep up with demand. At the same time, financial pressures are mounting.

According to industry reports, many providers are barely breaking even, which makes it incredibly difficult to invest in new or upgraded facilities — especially when the average cost of building a single aged care bed is now around $500,000.

This situation paints a clear picture: the current model isn’t working for those who need it most.

This is about more than buildings. It’s about making sure older Australians — especially those who can’t afford to pay upfront accommodation costs — still have access to high-quality, compassionate care.

We are advocating for a practical, immediate solution: increasing the accommodation supplement (AS) for concessional residents so it reflects the actual cost of care and introducing a system to review and adjust that amount every six months. This would help keep pace with rising costs, like wages, utilities, and compliance, which providers face every day.

Currently, the supplement falls well short of what’s needed. Without an increase, aged care providers have little incentive to build new facilities or upgrade older ones —especially in regional and rural areas where concessional residents make up a significant proportion of the population. In fact, nearly half (49.6%) of all aged care residents in Western Australia currently fall into this category.

We believe aligning funding with the real cost of care will ease financial pressures, help maintain high standards of service, and most importantly, ensure older Australians aren’t left behind.

There is also a broader impact. When residential aged care isn’t accessible, the pressure spills over into hospitals, where older people often remain for weeks waiting for a placement. This not only affects their wellbeing but adds to the strain on an already stretched healthcare system.

It’s time we invest in a solution that supports everyone — residents, families, staff, and the health system as a whole to ensure one is left waiting, and everyone receives the care they need, when they need it.