$88,000 a year to care for someone living with dementia? It’s true

We’re often asked at agedcare101.com.au by families about the costs of entering aged care – and their main question is “How can it cost so much?”

So I thought I’d share some new research just released by Flinders University. They found the ‘conservative’ whole-of-system cost of caring for a person with dementia in an aged care home was $88,000 a year – much higher than previously thought.

The cost of residential care made up 94 per cent of costs. This was based on the 85 per cent of the single person age pension that is charged to all aged care residents in Australia and the funding that aged care providers receive from the Federal Government – in short, the bare minimum amount you will pay for aged care.

The remaining six per cent of direct healthcare costs were mainly for pharmaceuticals (55 per cent), out-of-hospital attendances (25 per cent), and hospitalisations (13 per cent).

The cost of residential care was also much higher for people with dementia than those without it, though their healthcare costs were lower.

Counting the true cost of dementia 

The reality is over half of aged care residents have some form of dementia. Most are also living with chronic conditions.

The Flinders figures don’t even consider the costs of informal care provided by families or other costs such as creating dementia-friendly environments and training staff.

As someone who works in the sector – and has cared for a parent with dementia – I know it takes a lot of time and money to support these residents. Medications, doctors’ visits, increased home care services, loss of time from work, outings.

Most of this bill is footed by the Federal Government, but families will soon have to start contributing more to the costs of care as we all grow older.

If you do have a parent or loved one who may need to go into an aged care home in the future, it’s worth working out the costs now.

For more information on navigating the costs of aged care, click here.






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A special thanks to our contributors



Caroline has a wealth of experience writing within the retirement and aged care sector and is a contributing journalist for the Villages.com.au and agedcare101 blog and accompanying newsletters.

Ian Horswill


Ian is a journalist, writer and sub-editor for the aged care sector, working at The DCM Group. He writes for The Weekly Source, agedcare101, villages.com.au and the DCM Institute fortnightly newsletter Friday. Ian is in daily contact with CEOs of retirement living, land lease and the aged care operations and makes a new contact every week. He investigates media releases, LinkedIn and Facebook for a good source for ideas for stories.

Lauren Broomham

Retirement and Aged Care Journalist

Lauren is a journalist for villages.com.au, agedcare101 and The Donaldson Sisters. Growing up in a big family in small town communities, she has always had a love for the written word, joining her local library at the age of six months. With over eight years' experience in writing and editing, she is a keen follower of news and current affairs with a nose for a good story.

Jill Donaldson


Jill has been practicing as a clinical physiotherapist for 30 years. For the last 13 years she has worked solely in the Aged Care sector in more than 50 metropolitan and regional facilities. Jill has also toured care facilities in the US and Africa and is a passionate advocate for both the residents in aged care and the staff who care for them. She researches and writes for DCM Media.

Chris Baynes

DCM Media, agedcare101

Chris has been a journalist and publisher in the retirement village and aged care sectors for 11 years. He has visited over 250 retirement villages and 50 aged care facilities both within Australia and internationally. Chris is a regular speaker at industry conferences plus is a frequent radio commentator.

Annie Donaldson

Nurse and Carer

Annie has a long career in both nursing and the media. She has planned and co-ordinated the medical support from both international TV productions and major stadium events. In recent years she has been a primary family carer plus involved in structured carer support.