Australia’s aged care sector faces unprecedented pressure as the nation enters a period of accelerated population ageing, according to new analysis from spatial intelligence specialists Informed Decisions.
A report titled Caring For An Ageing Australia, released in February 2026, highlights a critical mismatch between surging demand for care and a shrinking workforce supply. The findings raise urgent questions about who will provide care for Australia’s growing number of older people.
The sector has historically depended on increasing female workforce participation, with women comprising nearly three-quarters of health and aged care workers. That pipeline has now plateaued, even as almost a quarter of the current workforce nears retirement. Key roles such as nurses, aged care workers, general practitioners, allied health professionals and psychologists already appear on the national skills shortage list.
Informed Decisions forecasts two distinct waves of population ageing. Australia has entered the first wave, driven by the large baby boomer cohort entering older age. Over the next two decades, this is expected to add around 2.5 million people aged 65 and over.
From the late 2020s, growth will accelerate in the oldest age groups. Around 1.3 million more people are projected to join the population aged 80 and over by the mid 2040s, as the same cohort reaches ages where health and care needs intensify rapidly. This will place sustained strain on aged care services.
While population ageing affects the whole country, it will vary across states and territories due to differences in migration patterns, housing affordability, economic conditions and existing age structures. Some regions will experience pressure earlier, while others face sharper acceleration.
Informed Decisions Chief Economist Rob Hall emphasised the implications for planning.
“Australia’s aged care system is entering a period of significant change. Population ageing is accelerating, the regulatory environment is being reshaped under the new Aged Care Act, and the workforce underpinning care delivery is under sustained pressure,” Mr Hall said.
Demand is rising fastest in areas where workforce challenges are most acute. Australians are entering aged care later in life due to longer lifespans and better health, shifting needs toward the oldest cohorts. The care sectors share an overlapping workforce of around 460,000 providers, who often work across aged care, disability, home care and related services.
As demand surges, the workforce is ageing, dispersing or, in some regions, shrinking.
Mr Hall noted that workforce feasibility has become a key factor in aged care investment.
“If an organisation cannot secure enough staff, they simply cannot keep a facility running, regardless of how strong the demand may be in the area. The challenge is compounded by an ageing workforce, with many workers approaching retirement and expected to exit the sector within the coming decade. The aged care sector must prepare for rising demand at the same time it replaces around 23% of its workforce due to retirements.”
Housing affordability is worsening shortages. Rising house prices and rents push key workers further from jobs, leading to long commutes, higher turnover and reliance on agency staff in metropolitan areas. In regional communities, where ageing is often most concentrated, many potential workers are priced out entirely.
In high demand regions, house prices can reach 30 to 40 times the median annual income of a health care worker, reducing applicants and continuity of care.
Data from the Australian Bureau of Statistics shows regions with the highest share of health care workers nearing retirement, defined as aged 55+ in 2021:
Western Australia – Wheat Belt: 2,323 workers, 34%
Barossa – Yorke – Mid North, SA: 2,151 workers, 33%
Richmond – Tweed, NSW: 6,368 workers, 33%
South Australia – South East: 3,635 workers, 32%
Southern Highlands and Shoalhaven, NSW: 3,181 workers, 32%
Mid North Coast, NSW: 5,299 workers, 31%
Warrnambool and South West, VIC: 2,909 workers, 31%
Coffs Harbour – Grafton, NSW: 3,271 workers, 30%
Hume, VIC: 3,808 workers, 30%
Capital Region, NSW: 4,078 workers, 30%
Nationally, 400,217 health care workers were aged 55+, representing 23% of the workforce.
The report also identifies suburbs projected to see the largest absolute increases in residents aged 65+ from 2021 to 2046, including Surfers Paradise, QLD with 13,138 additional people, Sunbury, VIC with 9,907, and Maroochydore, QLD with 9,732.
Australia’s median age has risen from 37.2 years in 2016 to 38.4 years in 2021 and is projected to reach around 41 by 2045. These demographic shifts carry major implications for housing, health systems, aged care, community infrastructure and labour markets.
Mr Hall concluded that coordinated action across governments, providers and communities will be essential.
“With demand rising fastest in areas least able to absorb workforce shortages, investment, planning and workforce solutions must be prioritised to ensure older Australians receive the care and support they deserve in the decades ahead.”
Looking at our facility, I see a few people nearing retirement, but I also notice some young workers entering the field. There are other reasons why staff leave, such as ongoing abuse from relatives. The unrealistic expectations placed on them are often supported by the commission. So, some staff in aged care struggle with burnout. I observe this myself, despite working for an organisation that is highly respected. We still have to contend with rude and aggressive behaviors.