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Objective: We aimed to ascertain the degree of influence of income disparity among older people with newly developed dementia on the probability and duration of stay in a hospital or long-term care facility and the degree of influence on medical expenses for hospitalization and care costs.Methods: This was a retrospective cohort study. Study participants included 12 829 individuals aged 75 years or older not diagnosed with dementia between April 2012 and March 2013 but newly diagnosed with dementia between April 2013 and March 2014. Participants were categorized according to income. We evaluated the associations of income with the probability and duration of stay in a hospital or long-term care facility and the costs for hospitalization and care.Results: In the adjusted analyses, high-income individuals had a lower probability of admission to a hospital or long-term care facility than middle- and high-income individuals. In all hospitals, low-income individuals had the longest duration of stay, but in long-term care facilities, income categories varied by facility type. Medical expenses for hospitalization and care costs were highest in the low-income group.Conclusion: Income category affects the probability and duration of stay in the hospital or a long-term care facility, as well as expenses for hospitalization and care. It is necessary to consider a policy to enable low-income older patients with dementia to continue living at home. [ABSTRACT FROM AUTHOR]