Our national aged care system provides care and lifestyle services delivered to people living in their own home or in a residential aged care facility.
In the current system, the Commonwealth Government maintains targets and ratios for the total number of aged care places - per 1,000 of the population aged 70+ years.
This ensures that there is an equal level of aged care services across Australia as our population ages.
The aged care sector in Australia provides services to 1.3 million Australians and generates annual revenues totalling around $21.5 billion.
The sector makes a significant contribution to the Australian economy, representing almost 1 per cent of Gross Domestic Product (GDP).
Total Australian Government expenditure on aged care in 2015-16 was $16.2 billion, up from $15.2 billion in 2014-15.
Funding for aged care included:
Australian Government expenditure is expected to be $17.5 billion in 2016-17, and increase to $20.8 billion by 2019-20.
Consumer expenditure on aged care was $4.7 billion in 2015-16 (excluding refundable accommodation deposits - RAD's).
The overall aged care provision target ratio is being adjusted to progressively increase from 113 operational places per 1,000 people aged 70 and over in 2012 to 125 by 2021-22.
Over the same period the target for home care places will increase from 27 to 45, while the residential care target is to reduce from 86 to 78.
The remaining two places are for the new Short Term Restorative Care Programme (STRC).
The provision ratios achieved at 30 June 2016 are 79.9 and 31.9 for residential care and home care respectively.
To achieve the target ratios by 2021-22, an additional 62,000 home care packages and 49,000 residential places will need to be made operational.
Usage of aged care increases significantly with age. Thirty-nine per cent of people aged 70 and over access some form of subsidised aged care and this rises to 81 per cent for people aged 85 and over.
Admissions to both home care and residential care have been stable since the reforms of 1 July 2014.
The 2016 Aged Care Approvals Round (ACAR) was the first in which home care places were not allocated to providers as packages are now assigned directly to consumers.
The 2016 ACAR allocated 9,911 new residential care places.
During 2015-16, across all residential aged care homes, the average proportion of supported residents was 46.8 per cent compared with 47.0 per cent in 2014-15.
In 2015-16, the Australian Government provided total home support funding of $2.2 billion.
There were 1,160 CHSP providers and 526 HACC providers in Victoria and Western Australia.
The Victorian HACC program was transitioned into the CHSP on 1 July 2016 and the Western Australian HACC program will join the CHSP on 1 July 2018.
Home care providers received an estimated $1.8 billion in revenue in 2015-16, paid around $1.6 billion in expenses and generated $183 million in profit.
Total Commonwealth funding was $1.5 billion.
Consumers of home care contributed around $160 million toward the cost of their care through basic daily fees and incomes tested fees.
The financial performance of home care providers continued to be strong in 2015-16 despite a slight decrease in reported profits compared with 2014-15.
In 2015-16, there were 949 residential care providers who operated 195,825 places.
The residential aged care sector is continuing to consolidate with the number of residential care places increasing while the number of providers continues to decrease