The aged care system is expanding, but the model running it is already out of date
Published on 28 November 2025
Australia’s aged care system is growing. More older people are entering care, more services are being delivered, and more public money is being poured into the system than ever before. But the latest Report on the Operation of the Aged Care Act (ROACA) makes one thing difficult to ignore: the framework guiding the sector no longer matches the way Australians age, seek support or move through the system.
More than 1.5 million people accessed government-subsidised aged care in 2024-25. That includes over a million people receiving entry-level support through CHSP, more than 250,000 home care package recipients, and around 218,000 residents in permanent or respite residential care. Demand keeps rising, and for the most part, providers are absorbing it. But the legislative and planning architecture sitting underneath this system is now a decade behind lived reality.
Government expenditure reached $39.2 billion, up from the previous year, driven by increased care minutes, regulatory uplift and ongoing home care growth. CHSP alone supported 1,073,000 people, reinforcing its role as the country’s largest aged care program by participation. Home care packages also increased, with over 257,000 operational packages, yet demand continues to exceed supply and wait times continue to stretch.
Residential aged care remains essential, but the story behind the numbers is more complex. There were 707 approved residential providers and 236,894 operational places, yet capacity is shifting rather than growing. Providers are refurbishing, repurposing or closing wings to manage financial pressures and workforce constraints. Occupancy may be stabilising, but not because demand and supply are in harmony. It is stabilising because supply is adjusting downward.
This is where the ROACA data becomes a mirror to an outdated system design. The longstanding planning ratio of 69.5 subsidised aged care places per 1,000 people aged 70+ is still being reported, despite the fact it is about to be functionally obsolete. Under the incoming Aged Care Act, “places” will move with people rather than being assigned to organisations. Providers are preparing for a consumer-driven market while still being measured using a supply-driven benchmark created for a different era.
The tension runs deeper across service types. Home and community-based care is now the dominant entry point for older Australians. Yet the funding mechanisms, assessment pathways and regulatory settings remain rooted in a residential-centric system. The interim Support at Home arrangements show this clearly. Packages are being allocated at partial funding levels, contributions are not well understood, and providers are balancing administrative load with unmet consumer expectations. The ROACA figures confirm that home care growth is outpacing the system’s ability to modernise around it.
There are gaps in quality and equity that the report highlights indirectly. Regional and remote participation is inconsistent. Cultural safety, diversity responsiveness and specialised supports (including Indigenous-specific services and flexible care options) remain uneven across jurisdictions. These are not new problems, but they reinforce how much the sector relies on legacy structures to deliver services that have evolved beyond them.
Workforce remains the defining constraint, even when the data softens the edges. While the report notes increases in direct care minutes and workforce investment, it does not disguise the reality facing providers: rising acuity, pressure on skill mix, high recruitment costs and continued dependence on agency labour in many parts of the country. A system can expand on paper, but without people, it cannot function.
Reporting and compliance continue to multiply despite repeated promises of simplification. The ROACA outlines dozens of datasets, metrics and reporting pathways that providers navigate daily. Each serves a purpose, but together they illustrate how complexity has compounded over time. The strengthened Quality Standards, new Code of Conduct, Serious Incident Response Scheme expansions and Support at Home reforms will all require more granular data, not less. Yet the infrastructure to deliver it remains fragmented.
The result is a sector in active transition, guided by a model that can no longer carry the weight placed on it. Providers are moving towards personalised, home-first, digitally supported care environments. Families are expecting clearer visibility of services and outcomes. Consumers are exercising choice with more confidence and less patience. The ROACA data shows a system expanding, but the foundations were designed for a different demographic, a different service mix and a different definition of quality.
The new Aged Care Act, taking effect in November 2025, is meant to reset the system around rights, transparency and outcomes. It will only succeed if it replaces outdated measurement tools with ones that reflect the real drivers of care today: consumer expectations, workforce capacity, digital capability, home-first service demand and the true cost of everyday living.
Aged care is not collapsing. It is evolving faster than the system that governs it. The challenge for policymakers and providers alike is to ensure the framework catches up before the next ROACA tells the same story.