The work undertaken for the United Protestant Association by David Payne Constructions includes eight dementia-specific beds, a commercial kitchen and laundry, archive room, loading dock and staff amenities.

UPA district manager Megan Whitney said the existing residential aged care facility would be extensively renovated during stage two works due to start almost immediately.

"The internal fit-out is expected to take five months," she said.

"Work will begin in the special needs unit and extend throughout the whole building.

"Stage three work will involve the construction of 12 additional beds in the general hostel area.

"The new beds will be on the western side of Bracken House, overlooking the Macquarie River.

"Extending and revamping Bracken House will create much needed room and a more pleasant and workable environment for residents and staff.

"Technology is being increased and we are making environmental improvements with ventilation systems to maximise heating and cooking.

"Solar panels and a battery back-up system will mean that power outages will not be a concern."

Ms Whitney said UPA consistently had a waiting list for residency at Bracken House.

Demand was in line with demographic data obtained by the Australian Bureau of Statistics through censuses in 2006 and 2011.

Data analysis showed a change in population numbers for Dubbo across each age group in the five year period.

The Dubbo population had grown by 2.5% between 2006 and 2011. Significant growth had been experienced in the older age group from 50 above.

The largest increase - 23.5% - was in the 85 and over age category.

Ms Whitney said the rising elderly population had resulted in a corresponding increase in demand for aged care and seniors living accommodation.

"UPA provides significant services in Dubbo but we want to do more," she said.

"When the three stages of the $8 million upgrade and revamp are completed Bracken House will go from 53 beds to 73 beds.

"In the latest round of government aged care approvals we were successful in obtaining 30 new consumer directed care packages.

"This will allow us to assist more people in the Dubbo area.

"Community assistance ranges from taking people shopping or doing shopping through to washing clothes, preparing meals, personal care duties such as showering and dressing, and palliative care."

Ms Whitney said UPA had been encouraged by the response to the Oxley Village independent living retirement complex established on the Bracken House precinct.

"We have constructed 31 units so far," she said.

"Eight are currently available. There are plans to build more units as funds become available."

UPA is a not-for-profit organisation offering accommodation facilities across 45 regional centres in NSW.