Care home patients suffering from dementia should be allowed to participate in consensual sex, experts said.
Safety fears and ageism towards elderly people in care facilities are denying them a "basic human right", the report suggests.
The article, published in the Journal of Medical Ethics, argues that physical intimacy and the expression of sexuality is a "normal and healthy" part of ageing.
The authors say the lack of attention paid to resident's sexual needs is "concerning".
"Since it has been well established that sexuality and intimacy continue to be important in later life and are central to an individual's health and wellbeing, the lack of attention paid by aged care facilities to residents' sexual needs is concerning," they write.
Many care facilities struggle to deal with the "complex moral and ethical issues" when residents express their sexuality, the report states.
"Particularly when a resident has dementia, staff apprehensions about the abrogation of their duty of care and concerns about unlawful activity, anxiety about potential risks to the resident, and fear of negative repercussions from a resident's family make many facility managers wary of physically intimate activity among residents," the authors say.
They say that older people, including those suffering from dementia, should have the right to chose whether they participate in consensual sex.
The report suggests that a person may perform badly on a test to assess their mental state, but they are often still able to express a preference for a friend or lover.
While it is important not to expose vulnerable patients to harm, this should not prevent patients with dementia from making their own decisions about sex, they say.
They add: "Seeking to 'protect' individuals with dementia by not allowing them to express their sexual needs, thereby stifling their autonomy and personhood, is a far greater failure of duty of care.
"It is also, we would argue, a violation of the fundamental right of a person with dementia to be recognised as a person before the law."
The authors from the Australian Centre for Evidence Based Aged Care suggest that residential care homes should consider implementing formal policies or appropriately trained staff to deal with the issue - which will become more prevalent with an ageing population.