The move is part of a bold plan to expand aged care facilities.

And millions of extra dollars will be pumped into community stay-at-home care as part of a pitch by the Gillard Government for the “grey” vote.

In the biggest reforms to aged care for years, the Government is preparing to announce a new era of user-pays, including for residents classified as “high care”.

The Government is determined to boost spending for aged care amid warnings of a serious shortfall in services as Australia’s population ages.

The user pays scheme is in line with other budget reforms to crack down on so-called middle class welfare and to take the axe to services such as the Medicare Safety Net.

It will only require those with substantial assets to pay for their aged care accommodation, either through a bond or through regular payments.

Over time, this will affect potentially 100,000 people who are classified as requiring “high care” in nursing homes and aged-care hostels.

The changes are in line with recommendations from the Productivity Commission and have received near universal support from aged care providers, consumers, and charity groups.

Prime Minister Julia Gillard, who nominated aged care as one of her top priorities, has been forced to act after concerns from the aged care sector about major shortfalls in services.

Already governments spend about $10 billion a year on aged care but this is forecast to grow by 150 per cent by 2050 as the number of Australians aged 85 and over reaches 1.8 million.

Last August the Productivity Commission unveiled a blueprint for reform, including recommendations that people who can afford to pay should.

In a stark warning, the Aged Care Industry Council warned Treasurer Wayne Swan of serious “shortcomings” in a sector which looks after about 1 million people.

“Services are limited and flexible; there are gaps in services; there are limited choices for individuals and their families; quality is variable, especially accommodation; the system is difficult to navigate; subsidies and user contributions are inconsistent and inequitable,” the council said in its letter to Mr Swan in December last year.

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