The aim of this study was twofold: to compare the functional levels of elderly awaiting nursing home placement and nursing home residents, and to compare their nurses' physical and psychological workloads. In Norway, the demand for nursing home placement has increased greatly. Elderly awaiting placement can receive care from home health care services and/or from their families. Documenting elderly's functional levels may illuminate the extent of the carers' workloads and the need for support during the waiting period. The study was conducted in 2005 on two groups in northern Norway. Using the Multi-Dimensional Dementia Assessment Scale to assess functional levels, one group of nurses assessed elderly awaiting nursing home placement (n = 36) and another group of nurses assessed nursing home residents (n = 47). The nurses also reported physical and psychological workloads in caring for these elderly. A comparison of the functional levels between elderly awaiting nursing home placement and nursing home residents showed few statistically significant differences. Nursing home residents had two lower motor functions, needed more assistance with activities of daily living, more regular administration of enemas, were more often unable to speak, and showed lower orientation levels. Clinically significant similarities were found in five motor functions, including rising from lying to sitting, rising out of bed and walking, and in behavioural and psychiatric symptoms. Both groups of elderly had a high prevalence of sadness and fearfulness. The results of this study indicate that elderly awaiting nursing home placement can be as frail as nursing home residents. These results highlight the elderly's need for assistance and reveal the need for more nursing home beds. Nurses in home health care and nursing homes rated physical and psychological workloads similarly. As many carers provide care 24 hours a day, these results also illuminate the need to support carers during the waiting period.