Residential aged care funding reform

The Australian Government is one year into a five-year, $18.8 billion aged care reform program. This includes the new Australian National Aged Care Classification (AN-ACC) to replace the Aged Care Funding Instrument (ACFI) from 1 October 2022.

AN-ACC overview

The AN-ACC care funding model will deliver:

  • a care funding model that better matches funding to resident needs
  • more equitable distribution of funding
  • independent assessments of resident’s needs for funding purposes, freeing nurses from undertaking paperwork
  • a new methodology for annual changes in prices/indexation, informed by independent costing studies and advice
  • an equitable model for distributing funding uplifts from 1 October 2022, including the Basic Daily Fee supplement, care minutes funding and increased residential respite funding.

Learn more about the AN-ACC funding model.

2022- 2023 Budget Announcement

In the 2022-23 Budget the Government announced:

  • The AN-ACC starting price of $216.80 compared to an ACFI price of $188.60 from 1 October 2022 for the 2022–23 financial year. The AN-ACC price is equal to an average per bed day funding of approximately $225. The AN-ACC care funding model works by applying weightings to the price that reflect variations in the cost of care, based on facility characteristics and the needs of individual residents. 
  • Data from AN-ACC Shadow assessments completed by independent assessors is now available through the My Aged Care Provider Portal.
  • Refinements to the Base Care Tariffs to increase funding and support to regional, rural and remote services that reflects their additional costs of care delivery.
  • It will invest a further $20.1 million into the AN-ACC Transition Fund taking the total investment to $73.4 million ensuring no residential aged care facility will receive less funding under the AN-ACC compared to funding received under ACFI. This funding builds on the $135.9 million provided in 2021 to develop the new, transparent AN-ACC funding model.

The Transition Fund, for the first two years of operation of the AN-ACC, will give facilities time to adjust their business operations and transition smoothly to the new model. Eligible providers will be invited to apply to access the AN-ACC Transition Fund through a non-competitive grant opportunity.

Transition arrangements

Preparations are underway, with all residents currently being assessed and allocated into an AN-ACC class (via Shadow Assessments). Services Australia will calculate and pay subsidies to providers based on the new AN-ACC classifications for residents from 1 October 2022.

In the meantime, providers can use their AN-ACC classifications, along with the AN-ACC starting price, to estimate the funding levels they will receive from
1 October 2022 to assist with their transition planning.

A Transition Support plan has also been developed to assist aged care providers prepare for the new arrangements. It sets out details on how to access support and information, including access to a specialised AN-ACC Funding Helpdesk if you have any questions about your funding.

Providers will need to keep ACFI paperwork up to date and finalise claims as soon as possible after 1 October 2022 for the period up to the end of September 2022. It is important that providers continue to submit client entry and exit information to Services Australia in a timely manner as this will support the timely assessment of residents in care.

Background

In 2016–17, the Australian Government announced it would look into strengthening residential aged care funding, including looking at possibly replacing the current funding assessment tool, the ACFI. The key milestones associated with this work are set out below.

Timeframes

Stages

Date

Alternative Aged Care Assessment, Classification System and Funding Models Report (University of Wollongong)

February 2017

Review of the Aged Care Funding Instrument Report (Applied Aged Care Solutions Pty Ltd)

June 2017

Resource Utilisation and Classification Study Reports (University of Wollongong)

February 2019

$4.6 million trial of the AN-ACC assessment model announced

10 February 2019

Report on the trial of the AN-ACC

August 2020

Aged Care Royal Commission Report

26 February 2021

$17.7 billion reform package for aged care, including $7.8 billion to improve residential aged care services announced at the 2021-22 Budget

May 2021

AN-ACC - Shadow Assessment Period  

April 2021 – Sept 2022

Basic Daily Fee supplement commenced

1 July 2021

Release of AN-ACC pricing 30 March 2022
Publish AN-ACC Transition Support Plan 8 April 2022
Release of Shadow Assessment data  8 April 2022

New Service Australia payment system go live

June 2022

Quarterly financial reporting commences

July 2022

Publication of AN-ACC guidance information

September 2022

AN-ACC commences (replaces ACFI)

1 October 2022

AN-ACC Transition Fund commences

1 October 2022

New residential respite funding model commences

1 October 2022

Publication of Star Ratings to help senior Australia, their carers and families to compare services and choose one that is right for them

December 2022

IHACPA informs on annual funding increases in residential aged care, including residential respite

1 July 2023

Mandatory care minutes standard commences

1 October 2023

Learn More

A series of fact sheets have been developed to support aged care providers as they transition to the new arrangements, including:

General fact sheets:

AN-ACC Transition Support Plan: This plan outlines the resources, financial support and other services available to residential aged care providers to help providers with transition planning to the new AN-ACC care funding model

Transitioning from ACFI to AN-ACC - FAQs: This sets out Frequently Asked Questions on the AN-ACC care funding model that replaces the ACFI from 1 October 2022.

Key AN-ACC Facts: This fact sheet provides data and information on AN-ACC and how it will provide equitable care funding to providers that better matches resident needs with the costs of delivering care enabling a more efficient, transparent and sustainable system.

What is AN-ACC and how will it work?: This factsheet provides information on how AN-ACC will work from 1 October 2022.

AN-ACC funding

What is the AN-ACC starting price?: This fact sheet outlines the AN-ACC price for the 2022–23 financial year and how it was determined.

What are AN-ACC Base Care Tariffs?: This fact sheet explains the Base Care Tariffs (BCTs) that will apply from 1 October 2022 under the AN-ACC care funding model, including recent changes to better support residential aged care facilities located in small rural towns and remote communities.

How do I calculate my AN-ACC care funding?: This factsheet outlines how funding is calculated under the AN-ACC to help providers understand funding levels as they transition to the new model.

How do I calculate my residential respite funding under AN-ACC? This fact sheet provides details on how to calculate respite care funding under the new arrangements.

What is the AN-ACC Transition Fund? This factsheet provides information about the AN-ACC Transition Fund that will be available to support providers as they transition to the new funding arrangement.

How allied health care is supported under AN-ACC? This fact sheet provides information on allied health services under AN-ACC.

Assessments

How is cognition assessed under AN-ACC? This fact sheet outlines how cognition and mobility will be assessed under the new arrangements.

What are shadow assessments?: This fact sheet provides information on the shadow assessments.

How will AN-ACC shadow assessments impact residents? This fact sheet provides information about the shadow assessment process and what it means for residents living at a Government funded residential aged care facility.

Are AN-ACC shadow assessments high quality? This fact sheet provides information on the quality assurance of shadow assessments conducted by independent assessors to support the transition to the new funding arrangements.

Can I ask for an AN-ACC re-classification? This fact sheet outlines the processes for requesting a reclassification of a resident classification decision. 

Care Minutes

What are care minutes?: This fact sheet explains the new care minute standards which are being introduced for residential aged care facilities as part of the AN-ACC care funding model.

How do I estimate my care minutes target?: This factsheet explains how providers can calculate their total care minute and registered nurse minutes target based on a facility’s resident casemix.

For further Aged Care Funding Reform information or related aged care activities please visit:

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] health.gov.au

View contact

Last updated: 
20 May 2022

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