Projecting the Need for Formal and Informal Aged Care in Australia: A Dynamic Microsimulation Approach

With the rapid ageing of the Australian population and the growth in the number of older persons and years likely to be lived with disability, the need for and provision of aged care have become one of the central themes of the public policy debate. This paper discusses the construction of a dedicated Aged Care Module built within the large dynamic microsimulation model APPSIM (Australian Population and Policy Simulator). APPSIM is based on the one per cent sample of the 2001 Australian population census and allows simulation of various life cycle events at individual and household levels through to 2051. The Aged Care Module was designed to specifically simulate low and high care needs and the use and costs of informal and formal home and community and residential age care services, building on information on a range of variables including age, gender, disability level, living arrangements and socio-economic status. The methods for imputing baseline data and transition equations for projecting future care needs will be outlined. The number of older Australians likely to need the different types of aged care will be compared with the projected supply of corresponding care places to estimate unmet need for aged care services at the national level over the next 40 years.