This paper sets out to critically evaluate reports from the Australian-wide National Survey of Mental Health and Wellbeing of very low rates of ICD-10 anxiety and depressive disorders in community resident older Australians. Data from the National Survey, which relied on the Composite International Diagnostic Interview (CIDI) were re-computed and re-analysed to address concerns about population sampling, interview response patterns and alternate measures of mental health. Rates of anxiety and depressive disorders fell to low levels after 65 years and continued to fall thereafter. This is at odds with findings from gerontological surveys that used assessment tools better suited to frail older people. Scores on mental health scales, together with diagnostic algorithms that obviated CIDI skip patterns, showed much less change in mental wellbeing across generations. It is argued that sampling and case ascertainment bias combined to reduce rates of anxiety and depression in very old people, especially when adjustments are made for the high morbidity levels encountered in aged residential facilities. Functional mental disorders almost certainly rise in frequency in advanced old age, often in conjunction with dementia.