The aged care royal commission wants older people and their unpaid carers to have expanded and improved access to respite, which gives them a short-term break from their usual care arrangements.

Respite and expanded services to restore independence and functioning for older people, such as exercise programs, would be funded under a separate funding stream.

Senior counsel assisting the commission Peter Gray QC said it represented a very good "investment" of public funds.

"It's not only humane but it makes good economic sense if the progression of people to more intensive and costly forms of care can be prevented and deterred," Mr Gray told an Adelaide hearing on Tuesday.

"This element in the overall design is centrepiece in reorienting the programs in the aged care system in the direction of maintaining and restoring function wherever possible and pursuing wellness and quality of life for people in care."

Carers Australia national policy manager Sue Elderton said respite had long been considered "the tail end" of aged care services.

"Looking at respite and the carer's contribution as an investment in the system provides a strong economic rationale for it being properly resourced and delivered, not just treated as the tail end of the aged care system," she said.

Mr Gray said sustaining the caring relationship provided by informal carers, such as family members, made good fiscal sense.

"We know that informal caring relationships are hugely valuable to the economy and in effect represent a saving in what might otherwise have to be funded by public revenue," he said.

"Informal care is necessary to sustain the overall system as well as being, one must presume, very often in the best interests of the person receiving the care."

The royal commission is hearing from panels of experts about proposed reforms to redesign the aged care system, which it says needs a complete overhaul and not mere patching up.

Australian Associated Press