The government will work with the aged-care sector to establish the scope of a royal commission ordered by the prime minister.
Scott Morrison announced the royal commission on Sunday following appalling cases of abuse of elderly people.
The prime minister said when Australians make the challenging decisions of how their loved ones will be looked after, they need to have confidence in the nation's aged-care system.
"That would have to be one of the toughest decisions you make. They are relying on you, 100 per cent, in their time of greatest vulnerability," he told reporters in Canberra on Sunday.
The inquiry comes after audits at some facilities revealed a "disturbing trend" of non-compliance and abuses in the sector, he said.
There was a 177 per cent increase in the number of aged-care homes where a serious risk to residents was identified in the past financial year.
There was also a 292 per cent increase in the number of facilities that refused to comply with rules.
The royal commission will look at the quality of both residential and home aged care, including how young Australians with disabilities are cared for in residential facilities.
Mr Morrison said the government will take a few weeks to settle its terms of reference, in collaboration with the aged-care sector.
A number of aged-care groups have welcomed the royal commission.
But some have said they don't want it to slow down urgent reforms, which have been recommended by a range of previous inquiries.
"We must press on with addressing key workforce and funding issues, and not lose sight of making the system better right now," Leading Age Services Australia chief executive Sean Rooney said.
Mr Morrison said the government would not pause important work in the sector already under way.
Australian Associated Press