Aged care: Productivity Commission report reveals ballooning cost of residential aged care

The cost of living in a residential aged care facility in WA has ballooned to more than $119,000 a year, on average.

Latest figures from the Productivity Commission have revealed the growing cost of caring for the elderly in aged care homes, with the average cost nationwide in 2024-25 slightly higher at nearly $120,500.

That price tag has seen a major spike in the past two years alone, with the Federal Government heavily subsiding the cost at an average $117,429 per resident per year in WA, and an average $117,396 per resident per year Australia-wide.

The sharp increase can in part be attributed to the introduction of mandatory care minutes for each patient since October 2023.

Providers must give 215 minutes of care per resident per day, including 44 minutes of direct care from a registered nurse.

But most older West Australians are waiting months before they even get in the door of an aged care residence — and those timeframes are also getting worse.

Two in five (42.6 per cent) older West Australians waited nine months or more to enter residential care from the date they were approved last year, up from 37.9 per cent the year prior.

Another quarter (23.9 per cent) of incoming residents waited between three and nine months for entry, up slightly from 23.2 per cent the year before.

The only state faring worse than WA was South Australia, with more than half of its incoming residents waiting a minimum nine months.

As Australia’s ageing population continues to grow, pressure is mounting on the Federal Government to reduce costs per person.

And those costs start with aged care assessments.

They’re standardised assessments that look at what support an older person might need and their eligibility for government-funded aged care services.

Assessments are free for anyone who wants one, because the Federal Government absorbs the cost to the consumer, but its proving a particularly costly exercise in WA.

Last year the government spent $864.36 per assessment in WA, more than any other State or Territory. Nationally, it was $673.49.

The Productivity Commission notes the higher cost for assessments in WA and Northern Territory, which had the second highest cost at $817.12, is influenced by additional costs such as travel and accommodation for assessors when travelling to remote clients.

Although it might not cost older Australians a dime for the actual assessment, they could be waiting a while before they see the results.

Last year one in 10 people waited more than 172 days, nearly six months, for their assessment outcomes nationwide.

WA fared slightly better, with one in 10 waiting more than 130 days, more than four months.

Sweeping changes to legislation on November 1 present another opportunity for the Federal Government to reduce its costs with the introduction of a tiered payment system for people accessing aged care services.

Older Australians entering residential care will be means tested and those who can afford it now have to pay a hotelling contribution as well as contribute to some of the costs of their non-clinical care. Providers can charge a new fee for optional extras.

Those being cared for at home now pay a contribution based on the services they receive.

The Federal Government must fully fund all clinical care costs in residential and in-home aged care under the new legislation.