Social protection for older people with long-term care needs


As populations around the world age, it is likely that demand for long-term care (LTC) will increase. OECD member countries and EU member states face significant challenges in balancing financial sustainability with the need to provide adequate protection against the financial risks associated with developing an LTC need – the cost of which can far exceed typical incomes and the duration of which can be many years. However, while governments are only too aware of how much they spend on LTC services, there are few data that quantify the protection that this spending gives to people at risk of developing LTC needs.


The OECD has designed a framework for comparing social protection for LTC across countries, and is developing models that can estimate the financial costs that people face, and the protection they receive, in different scenarios of LTC needs, and for any level of income and wealth.


Key insights

People often underestimate the health and financial risks of developing LTC needs, but these can be potentially catastrophic.

  • The costs of LTC are high relative to median incomes, especially for care at home. Without social protection, most older people would not be able to afford LTC from their incomes alone
  • Some countries provide greater support to those with more severe LTC needs and/or lower incomes (i.e. they target limited budgets to those sub-groups) but in some countries the opposite is true
  • In many countries, the level of support depends on the older person's means (i.e. also called means-testing), usually providing greater support for those with lower income and net wealth
  • Out-of-pocket costs for LTC can be very high and older people might have to deplete their assets to pay for LTC, seek help from informal carers (e.g. relatives, friends, neighbours), or go without care
  • Over time, LTC costs might push older people into poverty or into LTC institutions, especially those with more severe needs and limited support from relatives and friends
  • Some countries apply a special type of means-test called asset-testing, often leading older people to run down their assets (e.g. by selling their house) to qualify for greater public support
  • Most countries compensate informal carers below the average wage per hour actually worked but a few countries have high compensation levels

Total costs of LTC as a share of over-65s’ disposable income, in different settings and for different levels of needs, averaged across 26 jurisdictions in the OECD and EU


Note: Bars show averages for 26 jurisdictions in the OECD and EU. Low income refers to the upper boundary of the 20th percentile, and high income to the upper boundary of the 80th percentile. Low, moderate and severe needs correspond to 6.5, 22.5 and 41.25 hours of care per week, respectively. The costs of institutional care include the provision of food and accommodation, so are overestimated relative to home care. Years refer to 2016 except the 2019 in the Netherlands; 2018 for Canada, France, Italy, Japan, Latvia, Luxembourg, USA; 2017 for Austria, Belgium, Korea, Finland, Hungary, Lithuania, Slovenia.
Source: OECD analyses based on the Long-Term Care Social Protection questionnaire and the OECD Income Distribution Database.

Documents and resources


Affordability of long-term care services among older people in the OECD and the EU

April 2020 - This report provides a novel set of comprehensive and internationally comparable estimates of the adequacy, equity and efficiency of public social protection systems for LTC in old age in OECD countries and EU Member States. Using a set of “typical cases” of LTC need to ensure comparability, including different levels of severity and different ways in which needs can be met, this report shows cross-country and regional variations in the total costs of LTC services, the degree of public coverage, the out-of-pocket costs that care recipients face, and the associated poverty risks.

The report highlights the high costs of LTC for older people since, without social protection, many would not be able to afford LTC from their incomes alone. The findings suggest that there are gaps in social protection and that even after public support, out-of-pocket costs can be high, especially for older people with severe needs and those with low incomes.


Measuring social protection for long-term care 

March 2017 - This report presents the first international quantification and comparison of levels of social protection for LTC in 14 OECD and EU countries. Focusing on five scenarios with different LTC needs and services, it quantifies the cost of care; the level of coverage provided by social protection systems; the out-of-pocket costs that people are left facing; and whether these costs are affordable.

This report shows that when designing social protection systems for LTC, countries need to look systematically at the level of protection provided to people in different scenarios. Many countries aim to support people with LTC needs to remain in their own home for longer, but the results presented here suggest that gaps in social protection make this unaffordable for people with low income. Addressing these gaps should be a priority for future reforms.


A Good Life in Old Age? Monitoring and Improving Quality in Long-term Care 

June 2013 - As ageing societies are pushing a growing number of frail old people into needing care, delivering quality long-term care services – care that is safe, effective, and responsive to needs – is a priority for governments. Yet much still remains to be done to enhance evidence-based measurement and improvement of quality of LTC services across EU and OECD countries.

This book shows that: external regulatory controls are the most developed quality assurance approach but enforcement might be lenient, settings standards based on best practices is not widely done, market-based and care co-ordination approaches are an appealing option to incentivise consumers, providers and payers, and there is evidence and examples of useful experiences to help policy makers, providers and experts measure and improve the quality of LTC services.


Help Wanted? Providing and Paying for Long-Term Care 

May 2011 - This book examines the challenges countries face with regard to providing and paying for LTC. With populations ageing, the need for LTC is growing rapidly. Future demographic trends, policies to support family carers, ways to improve the supply and retention of LTC workers, financing arrangements, LTC insurance, and getting better value for money in LTC, are increasingly important.

This book shows that: the growing need for LTC has significant financing and labour-market implications, paying more attention to the needs of family carers is a win-win approach, all OECD countries need a system providing formal LTC services, LTC workforce challenges appear manageable, moving towards universal LTC benefits is desirable irrespective of financing model, and with growing cost pressure, seeking better value for money in LTC is a priority.


Health at a Glance 2021: OECD Indicators
November 2021 - Our flagship statistical publication includes a special chapter on Ageing and long-term care.

Pricing long-term care for older persons, WHO Centre for Health Development (‎Kobe, Japan)‎, Organisation for Economic Co-operation and Development, Barber, Sarah L, van Gool, Kees, Wise, Sarah. et al.
August 2021‎. Access Country case studies and policy briefs, Interviews with authors, and all background material.

Care Needed: Improving the Lives of People with Dementia
June 2018 - This book is the most recent and comprehensive cross-country assessment of the state of dementia care in OECD countries, including a discussion of how to better support families and informal carers.

Preventing Ageing Unequally
October 2017 - This book examines how the two global mega-trends of population ageing and rising inequalities have been developing and interacting, both within and across generations, showing that inequalities in education, health, employment and earnings compound, leading to large differences in lifetime earnings across groups. It includes a section on the costs of LTC and the effectiveness of social protection.

The Pursuit of Gender Equality: An Uphill Battle
October 2017 - This book shows that gender inequalities persist in all areas of social and economic life and across countries. It includes sections illustrating how women are more likely than men to: need LTC and for longer periods, have lower labour market participation, earn less over their lifetimes and have lower pensions, be informal and formal carers of people with LTC needs.

Background information

Global demand for long-term care in old age is becoming increasingly important due to, among other factors, population ageing, negligible progress in reducing old age disability rates, changing patterns in long-term care provision (a shift from institutional to home care), projected shortages of formal and informal carers, and rising expectations.

Because the need for long-term care can be unpredictable and the costs potentially catastrophic, all OECD countries have some form of public social protection, which can be provided directly to the recipients of care, or their informal carers, in the form of cash, services or both. To date, studies of the adequacy of public social protection systems have focused on national averages of long-term care costs, measured per capita or as a share of gross domestic product, alongside descriptions of the benefits and services available. Comprehensive cross-country comparisons of actual net effect of public social protection on the incomes and wealth of older people and their informal carers are lacking.

The OECD has designed and successfully implemented an approach to determine the costs that people with defined and comparable long-term care needs would incur, and the benefits and services they would receive, in different countries. In the absence of a universally accepted international measure of long-term care needs, and to ensure countries with different assessment criteria could be compared, a set of “typical cases” of need were defined, in detail, including different levels of severity (low, moderate and severe) and different ways in which needs can be met (formal and informal home care, institutional care). Drawing on available information on the distributions of income and wealth across OECD countries, it is possible to estimate, for an older person with defined long-term care needs, for any level of income and assets:

  • The costs of long-term care for this person
  • The benefits (cash, in kind, both) that are available to this person
  • The benefits that are available to spouses and children providing informal care to this person
  • The proportion of costs covered by the public social protection system
  • The proportion of costs paid out-of-pocket by this person

Importantly, based on the information above, it is possible to determine the proportion of people with defined long-term care needs (as set out in the “typical cases”) who cannot afford care from their incomes alone, and thus must either deplete their assets (including potentially selling their home and moving to institutional care), seek informal care, or simply go without care altogether.


Contact us

For any queries about social protection for LTC, please write to Mr Tiago Cravo Oliveira Hashiguchi:

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