Gay rights advocates are hailing a Government decision to recognise the specific needs of elderly gay people, with three aged-care facilities being built specifically for gay and lesbian people currently in the works.

Many in aged care do not feel comfortable coming out and those that do sometimes face devastating discrimination from carers or their peers.

Advocates say the Federal Government's recognition of the specific needs of the group is a historic step that has gone largely unnoticed.

What could be the world's first groundbreaking aged-care facility for gay and lesbian people is being built near Ballan, in regional Victoria.

Five years ago, the Human Rights Commission found 58 federal laws discriminated against sexuality or gender identity.

At the moment federal laws do not recognise discrimination on sexuality or gender identity grounds.

State laws do, but the Government is changing discrimination laws to give sexuality and gender identity the same discrimination status as race or age.

Later this year Attorney-General Nicola Roxon will propose those changes.

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But gay rights activists are still questioning whether church groups will keep an exemption from discrimination laws.

Church facilities make up about half the aged-care sector and the difficult step of needing aged care is often tougher if sexuality becomes an issue.

Care Connect is one of three groups the Federal Government is funding to provide aged care that does not discriminate against sexuality.

The group's Paul Ostrowoski says elderly homosexuals are coming to the most vulnerable period of their lives when they enter aged care.

Mr Ostrowoski says the organisation knows of isolated cases of discrimination but fears the problem is far broader.

He says elderly gays and lesbians may be confronted with discrimination that they have hidden from throughout their lives.

"They're going to have an absolute sense of - potentially - fear about whether they're going to be judged by services, whether they're going to potentially be denied services and there's all those fears of discrimination they've hidden from," he said.

"We have stories about putting away their photographs, their reading material, closing the wardrobes so that any carer is not going to form a judgement and, potentially, to discriminate against them."

Returning to the closet

Dr Jo Harrison from the University of South Australia says there are instances where people have reported choosing to hide their sexuality or "return to the closet".

Dr Harrison says the Government's recognition that the elderly homosexuals are being discriminated against and have special need is a "historic turning point".

"They announced an enormous swathe of aged care reforms and in amongst those reforms was that the Government is going to legislate and include lesbian, gay, bisexual, transgender and intersex older people in the Aged Care Act as a special needs group for the purposes of aged care," she said.

"And that's an incredibly significant turn around from like virtual invisibility at Federal Government level two years ago."

Peter Dickson is developing an aged care facility specifically for people who want to avoid sexuality or gender discrimination.

"The project is the first gay, lesbian, bisexual, transgender, intersex and queer community lifestyle living in Australia and the world," he said.

"That one gentleman and he's living in a normal retirement village where he would like to live in Linton where he can put a picture up of a male and not be discriminated and feel like he has to put these things in cupboards because his carers or somebody will walk in and basically pass judgement on him.

"Because it's not always the staff, it's also the residents that pick on people, which is sad."

Discrimination among aged care workers is partly due to the relatively high number of immigrants in the workforce.

They are sometimes from countries where homosexuality is far less accepted.

Dr Jo Harrison says the Government is putting more money into training aged-care workers to be more tolerant.

"Some may have very strong religious views. They may have very strong traditional cultural views for whatever reason," he said.

"But one of the issues with the education is to say you're here to do a professional job, you're here to treat people as human beings with dignity and rights and regardless of whatever your own personal view about this might be, you leave that outside.

"You come in here as a professional and you treat people in this fashion."