In the 2002-03 budget, the Australian Government announced funding for a review of pricing arrangements in residential aged care. The review examined long-term financing options for the aged care sector with consideration of the level and quality of care required by older Australians into the future and taking into account issues of equity of access. This report presents the findings of these investigations to inform that review,examining the prevalence of dementia in the Australian population, the current patterns of service use by people with dementia and the costs associated with this use.