It should be mandatory for doctors to report patients with dementia to the NSW roads authority, Alzheimer's Australia says.

Doctors should be obliged to report patients diagnosed with dementia to the NSW roads authority, according to Alzheimer's Australia.

It is currently a driver's responsibility to tell their insurer and the Roads and Maritime Service of their diagnosis.

But a lack of awareness around this requirement makes what is already a difficult time more confusing, stressful and challenging, Alzheimer's Australia says.

Medical professionals aren't bound to report people with dementia to the RMS, and only do so if they're worried somebody is driving when they shouldn't be, according to the advocacy group.

"This can place them in a difficult position and can be seen by their patient as the cause, if their licence is revoked, which can impact on their on-going relationship with their patient,"

Alzheimer's Australia NSW chief executive John Watkins said on Tuesday.

"If reporting is made mandatory, it removes the need for this discretion and takes it out of the hands of the physician."

Mr Watkins said the issue would only grow as the country's population aged, with about 142,000 NSW licence holders aged over 80 and 50,000 over 85 in 2014.

He said it's not known how many of these drivers were diagnosed with dementia but research suggests the incidence of the condition increases significantly with age.