Residential Care

Residential Aged Care: Past, Present and Future

Residential aged care is something a lot of us don’t think too much about — until the day comes when we really need to.

In Australia, the way we care for older people has come a long way over the past century, and it’s still changing today as our population grows older and people’s needs change.

In this guide, we’ll take a friendly look at how Commonwealth regulated residential care has developed over time, how it works today, and what’s on the horizon for the future of aged care in Australia.

How It All Began

Let’s go back to the early days. Decades ago, if someone could no longer live safely at home — often because of frailty, chronic illness, or dementia — families would usually look after them as best they could. It wasn’t always easy. There were fewer services to help carers, and little government funding for formal residential care.

Back then, many older people who needed care moved into what were called “nursing homes” or “hostels” run by churches, charities, or local community groups.

In those days, care standards varied widely. There was no single set of rules, and fees and conditions could be different depending on who ran the home.

Commonwealth Government Steps In

It wasn’t until the 1960s and 70s that the Commonwealth Government began playing a bigger role. The government started providing subsidies to organisations that ran aged care homes, with the idea of making residential care more accessible and affordable.

Over time, new legislation set out clearer rules and minimum standards for facilities, staffing, and quality of care.

In 1997, an Aged Care Act came into force. This Act underpinned much of how residential care is regulated today. It set out the framework for how aged care homes must be approved, how they’re funded, and what rights and responsibilities residents and providers have.

Importantly, it also introduced accreditation — meaning aged care homes must meet strict quality standards to receive and maintain government funding.

A new Aged Care Act 2024 has been legislated and will be in force from 1st November 2025;The New Aged Care Act is more consumer focused, and emphasises the human rights of residents.

How Residential Care Works Now

Fast forward to today, and the system has evolved a lot. These days, residential aged care is highly regulated by the Commonwealth Government. If an older person’s care needs become too much to manage at home — even with help from family or home care services — they may move into permanent residential care. Many also enter temporarily for respite care.

Getting Assessed

It all starts with an assessment by an Aged Care Assessment Team (ACAT). They look at the person’s health, ability to do daily tasks, and how much help they need. This assessment decides whether they’re eligible for government-subsidised care and what level of care they’ll require.

Who Provides the Care?

Residential care homes — sometimes still called nursing homes — can be run by not-for-profits, religious organisations, local councils, or private companies. They must all be approved providers and meet national care standards.

What’s Covered?

Residents get access to accommodation, meals, laundry, cleaning, personal care (like bathing and dressing), and clinical care. There are also lifestyle activities to help people stay connected and engaged. It’s all about providing a safe, comfortable, and respectful environment for people who need round-the-clock help.

How It’s Funded

Funding comes from two main sources: the government and the residents themselves. The government pays subsidies to providers for each resident, based on their care needs. Residents contribute by paying daily fees and, depending on their income and assets, means-tested care fees and accommodation payments (like the Refundable Accommodation Deposit or Daily Accommodation Payment).

This means residents who can afford to pay more will do so, while people with fewer assets can still access quality care, with help from government funding. It’s not always simple — means testing, asset assessments, and forms like the SA485 and SA457 all play a part in figuring out who pays what.

Royal Commission and Calls for Reform

Despite big improvements over the years, the aged care system has faced plenty of challenges. Many of us remember the Royal Commission into Aged Care Quality and Safety, which ran from 2018 to 2021. It revealed some hard truths about parts of the sector — from understaffing and inconsistent standards to gaps in training and oversight.

The Commission made 148 recommendations aimed at lifting the standard of care, giving older Australians more choice and control, and making the system more transparent and accountable.

What’s Changing?

The government has been rolling out reforms to respond to the Royal Commission’s findings. Some of the biggest changes include:

New Quality Standards: A stronger focus on safety, dignity, and respect — with clear expectations for care providers.

Staffing Requirements: New rules about minimum staffing levels to make sure residents get the time and care they deserve.

Star Ratings: Aged care homes now have public ratings so families can better compare quality and performance.

Better Home Care: Reforms like the Support at Home program aim to help more people stay at home longer, delaying or avoiding residential care if they choose.

Improved Complaints and Oversight: New bodies and powers to keep an eye on providers and make it easier for people to speak up if things go wrong.

These changes don’t happen overnight — and there’s still a lot of work to do. But the goal is clear: to build an aged care system that treats older Australians with the respect, quality, and care they deserve.

What Might the Future Look Like for Residential Care?

As our population ages, demand for residential aged care will keep growing. It’s predicted that by 2050, around 3.5 million Australians will be using aged care services.

More people will live longer with chronic conditions like dementia, which means homes will need to provide more specialised and complex care.

We’ll also see more focus on “ageing in place” — helping people stay in their own homes for as long as possible, with residential care becoming more of a last resort when needs are very high. Many experts say the future will be about choice, flexibility, and person-centred care.

Residents and their families want more say in how care is delivered — what they eat, when they shower, who helps them, and how they keep up with hobbies and social connections.

Technology and Innovation in Residential Care

Technology is also playing a major role. Some homes already use smart monitoring systems, telehealth, and new equipment to improve safety and comfort.

We might see more virtual family visits, robots, remote health consultations, and clever ways to reduce social isolation for residents.

What It Means for You

If you or a loved one is thinking about residential care, it helps to know you have options — and that the system, while far from perfect, is working towards giving you better care, more information, and greater respect for your choices.

Take the time to understand what’s involved: the fees, the assessments, the paperwork, and the rights you have as a resident. Talk with family, ask questions, and don’t be afraid to negotiate fees and services with providers. Remember, you’re not alone — there are advisers, placement consultants, and community services to help you through the process.

Residential aged care has come a long way from the old “nursing homes” of the past. With more oversight, stronger quality standards, and reforms still rolling out, the aim is to make sure every older Australian can feel safe, respected, and cared for in their final home away from home.

Thanks for taking the time to learn a bit about the past, present, and future of Commonwealth regulated residential care. If you’d like to know more about the fees, the means testing, or how to choose the right home, be sure to check out our other guides here on our website.

Types of Care Provided

• Personal Care: Assistance with bathing, dressing, eating
• Clinical Care: 24/7 access to nurses, medication management, wound care
• Lifestyle Programs: Social, cultural, and recreational activities
• Allied Health Services: Physiotherapy, podiatry, occupational therapy

Costs and Fees

There are four main types of fees:

• Basic Daily Fee: Covers living costs such as meals and cleaning (set at 85% of the full Age Pension)
• Means-Tested Care Fee: Based on income and assets; helps cover care costs
• Accommodation Payment: Either Refundable Accommodation Deposit (RAD) or Daily Accommodation Payment (DAP)
• Additional Services Fees: For extra services such as hairdressing or pay TV

Choosing a Facility

Use the MyAgedCare website to compare providers based on services, location, and quality ratings. It’s recommended to visit multiple homes and ask about:

• Staffing levels
• Daily routines
• Menu options
• Activities and outings

Rights and Protections

Residents are protected by the Charter of Aged Care Rights, which includes:

• The right to be treated with dignity and respect
• The right to safe and high-quality care
• The right to make choices and have privacy

Facilities are required to meet the Aged Care Quality Standards and are subject to audits and reviews.

Transitioning to Residential Care

Transitioning into care can be emotionally and practically challenging. Support is available through:

• Transition care programs
• Case managers and social workers
• Family meetings and planning

Respite and Palliative Care

Many facilities offer:

• Respite Care: Short stays to give carers a break or during recovery
• Palliative Care: End-of-life care focused on comfort, dignity, and quality of life

Complaints and Advocacy

The Aged Care Quality and Safety Commission handles complaints and enforces compliance. Independent advocates are also available to help residents and families understand their rights.

Final Thoughts on Residential Care

Residential aged care is an essential part of Australia’s aged care system, providing a safe and supportive environment for those who can no longer live independently.

Understanding how residential care works, what it costs, and what to expect can help families make informed and confident decisions.

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