Residential Aged Care Funding Reform

The Australian National Aged Care Classification (AN-ACC) is a proposed new assessment and funding model for residential aged care. Find out about the research we have done to create and test the model, who we have consulted and what we’re doing now.

What do we want to change?

The Australian Government is proposing a new way to work out how to pay residential aged care funding:

This proposal aims to:

  • make funding for residential aged care fairer and more stable
  • improve the assessment process for funding so it is more accurate and nationally consistent
  • manage a credentialed workforce of registered nurses, physiotherapists and occupational therapists to assess residents for funding purposes
  • remove the paperwork burden on aged care providers and their workers so they can spend more time on providing safe and effective care
  • boost innovation in residential aged care, while fostering a culture of reablement and excellence

In 2017, we commissioned the Australian Health Services Research Institute (AHSRI) at the University of Wollongong to develop a funding model to meet these aims.

The result is a proposed new funding model — the Australian National Aged Care Classification (AN-ACC). A trial of the AN-ACC assessment framework started in November 2019.

The Government has not yet decided to implement the proposed funding model. The outcome of the trial and ongoing conversations with the aged care sector and consumers will inform the future of funding reform.

Why is this important?

In 2016–17, the Australian Government announced it would look into strengthening residential aged care funding, including:

ACFI has caused unstable funding for the Government and approved providers, and may encourage outdated types of care. 

The independent Aged Care Financing Authority (ACFA) has found issues with ACFI. See ACFA’s submission to the Royal Commission into Aged Care Quality and Safety

What have we done so far?

We have been working since 2016–17 to build evidence for a new funding model. This includes two scoping reports in 2017:

The second report recommended a blended payment model based on fixed and variable costs. The report also recommended research into what drives residential aged care costs.

Resource Utilisation and Classification Study (RUCS)

We commissioned AHSRI to run the research study, known as the RUCS, to:

  • look at the costs of residential aged care
  • work out which characteristics of residents and services drive costs
  • create a new model to assess needs, classify residents and distribute funding
  • develop an assessment tool suitable for use by external assessors

AHSRI completed the study in December 2018 and presented the results in seven reports.

Resource Utilisation and Classification Study (RUCS) Reports

RUCS was a national study that looked into the needs, costs and classification of residential aged care. The RUCS reports describe the key parts of the study including a proposed new assessment and funding model called Australian National Aged Care Classification (AN-ACC).

What is happening now?

Trial of the AN-ACC assessment framework

The trial started in November 2019. It will:

  • test the AN-ACC assessment tool and supporting software, hardware and IT systems
  • test the processes to manage an assessment workforce
  • confirm findings about the expected distribution of resident classifications


  • invited approved providers to take part in the trial through an expression of interest (EOI) in July 2019
  • sought assessment partners through an open request for tender (RFT)
  • engaged 4 assessment organisations in October 2019:
    • Access Care Network Australia
    • Aspire4Life
    • Care Tasmania
    • Healthcare Australia
  • started assessments in aged care homes in November 2019
  • will complete more than 10,000 assessments at over 150 aged care homes across the country by April 2020

In the trial, a registered nurse, occupational therapist or physiotherapist will assess and classify residents living in aged care homes. Participation by residents is voluntary.

To find out more, read the AN-ACC Trial fact sheet.

Who is being consulted?

Residential Aged Care Funding Reform Working Group

We will meet regularly with this working group, set up in November 2019, to discuss ways to develop and implement policy on residential aged care funding reform.

Find out more about the Residential Aged Care Funding Reform Working Group, including membership and communiques.

Resource Utilisation Classification Study (RUCS) Sector Reference Group

From 2017 to 2019 we met regularly with a group of aged care managers, clinicians, finance officers and other administrators to discuss residential aged care funding reform policy development and implementation.

This group was replaced by the Residential Aged Care Funding Reform Working Group in late 2019.

View resources related to the RUCS Sector Reference Group on the National Library Web Archive.

2019 consultation paper

We invited the public to submit their thoughts on our proposal for a new residential aged care funding model. Submissions closed on 31 May 2019.

Proposal for a New Residential Aged Care Funding Model – Consultation Paper

We used this paper as part of our 2019 consultation to seek feedback from the residential aged care sector and broader community.

We received 91 submissions. The submissions highlighted enthusiasm for ongoing conversations on funding reform and more information about the model.

Many people welcomed the proposed funding model as a positive opportunity to:

  • separate funding from care planning
  • promote best practice in the delivery of residential aged care

The submissions also highlighted that the aged care sector is keen:

  • for more discussions on sustainable funding
  • to take part in a reform process that is transparent

We will:

  • consider these submissions as we continue to develop funding policy
  • ensure we consult in an ongoing and transparent way about the proposed new model

2018 and 2019 stakeholder forums

We held stakeholder forums in 2018 and 2019 on the proposed model. View the presentations on residential aged care funding reform on YouTube.

View the slides, transcripts and other resources from stakeholder forums and events:

For Word versions, go to the National Library Web Archive.

2017 roadshow

We started consulting with the public in the 2016–17 financial year through our residential aged care funding reform roadshow. We travelled to all states and territories except the Northern Territory. Public feedback showed support for funding reform.

View the alternative funding model webinar held on 17 May 2017.


Aged care funding reform contact

Email us if you have questions about the Resource Utilisation Classification Study (RUCS) or the Australian National Aged Care Classification (AN-ACC).

ACFR [at]

View contact

Last updated: 
22 January 2020

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