As the number and share of the population aged 65 and over will continue to grow steadily in OECD countries over the next decades, improvements in the functional status of elderly people could help mitigate the rise in the demand for, and hence expenditure on, long-term care. This paper assesses the most recent evidence on trends in disability among the population aged 65 and over in 12 OECD countries: Australia, Belgium, Canada, Denmark, Finland, France, Italy, Japan, the Netherlands, Sweden, the United Kingdom and the United States. The focus is on reviewing trends in severe disability (or dependency), defined where possible as one or more limitations in basic activities of daily living (ADLs, such as eating, washing/bathing, dressing, and getting in and out of bed), given that such severe limitations tend to be closely related to demands for long-term care. One of the principal findings from this review is that there is clear evidence of a decline in disability among elderly people in only five of the twelve countries studied (Denmark, Finland, Italy, the Netherlands and the United States). Three countries (Belgium, Japan and Sweden) report an increasing rate of severe disability among people aged 65 and over during the past five to ten years, and two countries (Australia, Canada) report a stable rate. In France and the United Kingdom, data from different surveys show different trends in ADL disability rates among elderly people, making it impossible to reach any definitive conclusion on the direction of the trend. One of the main policy implications that can be drawn from the findings of this study is that it would not be prudent for policymakers to count on future reductions in the prevalence of severe disability among elderly people to offset completely the rising demand for long-term care that will result from population ageing. Even though disability prevalence rates have declined to some extent in some countries, the ageing of the population and the greater longevity of individuals can be expected to lead to increasing numbers of people at older ages with a severe disability and in need of long-term care. The results of the projection exercise to 2030 for all countries, regardless of different trends in disability prevalence, confirm this important finding.