ObjectivesTo examine the sociodemographic and diagnostic factors associated with a discharge from hospital to residential aged care (RAC) for younger people (aged 15–64 years) with neuropsychiatric disorders.DesignAn exploratory case–control study using a historic cohort of people with neuropsychiatric disorders. Cases were people transferred to RAC on hospital discharge during the study period. Controls were people not transferred to RAC on discharge during the study period.SettingPublic and private hospital admissions in New South Wales (NSW), Australia.ParticipantsPeople aged 15–64 years with a neuropsychiatric disorder hospitalised in NSW between July 2002 and June 2015 (n=5 16 469).Outcome measuresThe main outcome was transferred to RAC on discharge from hospital. We calculated ORs for sociodemographic and diagnostic factors to determine factors that may impact discharge to RAC.ResultsDuring the period of data capture, 4406 people were discharged from hospitals to RAC. Discharge to RAC was most strongly associated with diagnoses of progressive neurological and cognitive disorders. Acute precipitants of RAC transfer included a broad range of conditions and injuries (eg, Wernicke’s encephalopathy, stroke, falls) in the context of issues such as older age, not being partnered (married or de facto), living in areas of lower socioeconomic status, functional issues and the need for palliative care.ConclusionsThere are multiple intersecting and interacting pathways culminating in discharge from hospital to RAC among younger people with neuropsychiatric disorders. Improved capacity for interdisciplinary home care and alternative housing and support options for people with high support needs are required.