Older adults with sensorineural hearing loss have greater difficulty understanding speech than younger adults with equivalent hearing (Gates & Mills, 2005). This increased difficulty may be related to the influence of peripheral, central auditory processing or cognitive deficits and although this has been extensively debated the relative contribution to speech understanding is equivocal (Working Group on Speech Understanding and Aging, 1988). Furthermore, changes to the speech mechanism that occur as a result of age lead to natural degradations of signal quality. Studies involving hearing impaired listeners have not examined the influence of such naturally degraded speech signals. The purpose of this study was to determine: (1) whether older hearing impaired listeners demonstrate differences in speech understanding ability or perceived effort of listening on the basis of the age of the speaker and the predictability of the stimulus, and (2) whether any individual differences in speech understanding were related to central auditory processing ability. The participants included nineteen native speakers of New Zealand English ranging in age from 60 to 87 years (mean = 71.4 years) with age-related sensorineural hearing loss. Each participant underwent a full audiological assessment, three measures of central auditory processing (the Dichotic Digits Test, the Random Gap Detection Test and the Staggered Spondaic Words Test), and completed a computer-based listening experiment containing phrases of high and low predictability spoken by two groups: (1) young adults (18 – 30 years) and (2) older adults (70 years and above). Participants were required to repeat stimulus phrases as heard, with the researcher entering orthographic transcriptions into the custom-designed computer programme. An Analysis of Covariance (ANCOVA) was used to determine if significant differences existed in percentage words correct scores as a factor of speaker group (young versus older speakers) and stimulus predictability (high predictability versus low predictability phrases), with level of presentation (dB) as a covariate. Results demonstrated that although there were no significant differences in percentage words correct with regards to speaker group as expected, lower scores were achieved for low predictability phrases. In addition, increased listener effort was required when listening to the speech from the older adult group and during the low predictability phrase condition. Positive correlations were found between word understanding scores and tests of dichotic separation, which suggests that central auditory processing deficits contribute to the speech understanding difficulties of older adults. The implications of these findings for audiological assessment and rehabilitation are explored.