Older people are failing to plan their care in the event they become unable to communicate due to dementia, illness or accident.
A background paper released for the aged care royal commission on Thursday shows only three per cent of people aged over 65 have a statutory advance care directive in place outlining how they want to be cared for if they become incapable of making decisions.
"Advance care planning has been shown to reduce unnecessary transfers from a residential aged care facility to a hospital and decrease a person's level of worry and anxiety about their future," it says.
"Advance care planning can also have benefits for the person's family by improving the family's understanding of the person's wishes and reducing stress, anxiety and depression in the surviving family by helping them prepare for a death."
The paper also says advance care planning is particularly important for people approaching death to express the type of care they want and increase the likelihood of dying in their preferred setting.
Advance care planning includes conversations with health professionals and families and can result in informal documents such as a letter or a formal directive.
Every state and territory recognises some form of advance directive and allows people to appoint a substitute decision-maker.
A low uptake of directives has been attributed to a lack of awareness about advance care planning and a reluctance to discuss cognitive deterioration and death.
© AAP 2020