Butler to recommend dementia to be added to national list of health priorities.

The federal government will spend almost $270 million on the care and diagnosis of dementia sufferers, but the money falls short of calls by Alzheimer's Australia for a $500 million investment.

Under an aged-care reform package announced on Friday, the government will spend a total $268.4 million over five years, including $164.3 million to be paid as supplements to sufferers living in aged-care facilities and at home.

The remainder of the money will go toward promoting early diagnosis over the disease.

Minister for Ageing Mark Butler said dementia was set to become one of the nation's most common disabilities in coming years.

He said the dementia spending was "substantial".

The minister said there was a separate process underway involving dementia research.

Butler will be taking a recommendation to the next meeting of state and territory health ministers that dementia be added to national list of health priorities.

AAP