More funding for residential aged care
We are increasing residential aged care funding to support the Fair Work Commission’s decision on the Aged Care Work Value case. This means a 15% award wage increase for aged care workers on the Aged Care Award 2010 and Nurses Award 2020.
Funding includes:
- an additional $10.1 billion in Australian National Aged Care Classification (AN-ACC) funding (over 4 years from 2023-24), with an increase to the AN-ACC price to $243.10, including:
– $7.6 billion to align with the award wage increase (at 200 care minutes)
– $2.5 billion in indexation to cover other cost increases since the AN-ACC price was set - a new $10.80 per resident per day hotelling supplement, including additional funding of $116 million (over 4 years from 2023-24)
- an additional $743 million (over 3 years from 2024-25) to align with the award wage increase to deliver a sector average of 215 care minutes from 1 October 2024
- an increase in the 24/7 registered nurse supplement of $178 million (over 4 years from 2023-24) to align with the award wage increase.
An additional $6 million in 2023-24 for a new grant opportunity under the AN-ACC Transition Fund (in 2023-24) will provide targeted support to particular residential aged care services.
Providers can estimate their AN-ACC funding increase, and associated care minutes targets for 1 October 2023, using the online AN-ACC funding and care minutes estimator.
AN-ACC and hotelling supplement funding comparisons
The funding uplift will increase the average AN-ACC funding per resident per day by approximately 17% from $223 to $260. This is in addition to funding provided from 1 July 2023 through the 24/7 registered nurse supplement.
Under the AN-ACC increase, more equitable care funding is provided to regional, rural and remote, First Nations and homeless facilities, recognising additional care cost requirements:
- under the AN-ACC price of $216.80, non Aboriginal and Torres Strait Islander services in remote (Modified Monash Model (MMM 6) and very remote (MMM 7) locations receive on average $283 per person per day, compared to an estimated $328 per person per day under an AN-ACC price of $243.10 combined with a hotelling supplement of $10.80 per person per day from 1 July 2023
- under the AN-ACC price of $216.80, services in regional Australia (MMM 5) receive on average $229 per person per day, compared to an estimated $267 per person per day under an AN-ACC price of $243.10 combined with a hotelling supplement of $10.80 per person per day from 1 July 2023
- under the AN-ACC price of $216.80, homeless services receive on average $298 per person per day, compared to an estimated $344 per person per day under an AN-ACC price of $243.10 combined with a hotelling supplement of $10.80 per person per day from 1 July 2023
- under the AN-ACC price of $216.80, specialised remote and very remote Aboriginal and Torres Strait Islander services receive on average between $380-$650 per person per day, compared to an estimated $437-$740 per person per day under an AN-ACC price of $243.10 combined with a hotelling supplement of $10.80 per person per day from 1 July 2023.
This funding also helps prepare the residential aged care sector for the start of the 24/7 registered nurse responsibility from 1 July 2023, and mandatory care minutes from 1 October 2023, through helping to attract and retain staff.
Increase to the AN-ACC price
The increase to the AN-ACC price funds the 15% award wage increase for:
- registered nurses
- enrolled nurses
- personal care workers
- assistants in nursing
- recreational activities officers (lifestyle workers).
The wage rise will also encourage recruitment and retention to help protect the sustainability of the sector. The increase also accounts for inflation and other cost increases since the first AN-ACC price set on 1 October 2022.
The new AN-ACC price reflects the recommendation of the Independent Health and Aged Care Pricing Authority (IHACPA). IHACPA has released its Residential Aged Care Pricing Advice 2023-24 to Government that informed the new AN-ACC price of $243.10 commencing on 1 July 2023.
IHACPA has also released the following documents:
- Pricing Framework for Australian Residential Aged Care Services 2023-24
- Towards an Aged Care Pricing Framework Consultation Report
- Technical Specifications.
This determines the fixed (Base Care Tariff (BCT)) and variable (casemix of AN-ACC classes) funding residential aged care services receive under the AN-ACC funding model.
Each BCT and AN-ACC class has a corresponding National Weighted Activity Unit (NWAU). This adjusts funding based on factors like location of a service and casemix of residents. The AN-ACC price is equivalent to one NWAU.
For the new funding amounts for BCT categories and AN-ACC classes, see the tables below.
Table 1a BCT funding for services where funding is calculated based on occupied places
|
BCT Category |
Services Australia Payment Statement code |
NWAU |
Funding Basis |
Funding per occupied place (current rate) |
Funding per occupied place from 1 July 2023 |
|---|---|---|---|---|---|
|
Standard MMM 1 – 4 |
Fixed subsidy – class 6 |
0.49 |
Occupied places |
$106.23 |
$119.12 |
|
Standard MMM 5 |
Fixed subsidy – class 7 |
0.55 |
Occupied places |
$119.24 |
$133.71 |
|
Specialised homeless |
Fixed subsidy – class 5 |
0.92 |
Occupied places |
$199.46 |
$223.65 |
Table 1b BCT funding for services where funding is calculated based on operational places
|
BCT Category |
Services Australia Payment Statement code |
NWAU |
Funding Basis |
Funding per operational place (current rate) |
Funding per operational place from 1 July 2023 |
|---|---|---|---|---|---|
|
Standard MMM 6 – 7 |
Fixed subsidy – class 3H |
0.68 for first 29 places |
Operational places |
$147.42 |
$165.31 |
|
Standard MMM 6 – 7 |
Fixed subsidy – class 3L |
0.52 for places 30 and above |
Operational places |
$112.74 |
$126.41 |
|
Specialised Aboriginal and Torres Strait Islander MMM 6 |
Fixed subsidy – class 2 |
0.78 |
Operational places |
$169.10 |
$189.62 |
|
Specialised Aboriginal and Torres Strait Islander MMM 7 |
Fixed subsidy – class 1 |
1.80 |
Operational places |
$390.24 |
$437.58 |
Table 2 Variable funding rates by AN-ACC class
|
AN-ACC class |
Resident description |
NWAU |
Funding (current rate) |
Funding from 1 July 2023 |
|---|---|---|---|---|
|
Class 1 |
Admit for palliative care |
1.00 |
$216.80 |
$243.10 |
|
Class 2 |
Independent without compounding factors |
0.19 |
$41.19 |
$46.19 |
|
Class 3 |
Independent with compounding factors |
0.31 |
$67.21 |
$75.36 |
|
Class 4 |
Assisted mobility, high cognition, without compounding factors |
0.21 |
$45.53 |
$51.05 |
|
Class 5 |
Assisted mobility, high cognition, with compounding factors |
0.37 |
$80.22 |
$89.95 |
|
Class 6 |
Assisted mobility, medium cognition, without compounding factors |
0.35 |
$75.88 |
$85.09 |
|
Class 7 |
Assisted mobility, medium cognition, with compounding factors |
0.49 |
$106.23 |
$119.12 |
|
Class 8 |
Assisted mobility, low cognition |
0.54 |
$117.07 |
$131.27 |
|
Class 9 |
Not mobile, higher function, without compounding factors |
0.54 |
$117.07 |
$131.27 |
|
Class 10 |
Not mobile, higher function, with compounding factors |
0.87 |
$188.62 |
$211.50 |
|
Class 11 |
Not mobile, lower function, lower pressure sore risk |
0.83 |
$179.94 |
$201.77 |
|
Class 12 |
Not mobile, lower function, higher pressure sore risk, without compounding factors |
0.81 |
$175.61 |
$196.91 |
|
Class 13 |
Not mobile, lower function, higher pressure sore risk, with compounding factors |
1.00 |
$216.80 |
$243.10 |
Table 3 Variable funding rates by respite class
|
Respite Class |
Services Australia Payment Statement code |
Resident description |
NWAU |
Funding (current rate) |
Funding from 1 July 2023 |
|---|---|---|---|---|---|
|
Respite Class 1 |
Variable subsidy – class 101 |
Independent mobility |
0.304 |
$65.91 |
$73.90 |
|
Respite Class 2 |
Variable subsidy – class 102 |
Assisted mobility |
0.404 |
$87.59 |
$98.21 |
|
Respite Class 3 |
Variable subsidy – class 103 |
Not mobile |
0.864 |
$187.32 |
$210.04 |
For more information on AN-ACC, see the Australian National Aged Care Classification (AN-ACC) funding guide.
Hotelling supplement
A new $10.80 per person per day hotelling supplement will be provided in addition to the AN-ACC funding increase. This will separate hotelling funding (representing the previous Basic Daily Fee (BDF) supplement that was rolled into AN-ACC) from care funding and is equivalent to $3.5 billion over 4 years from 2023-24.
This supports providers to meet the costs of hotelling services (such as catering, cleaning and gardening) not covered by the BDF. It also funds higher wages for heads chefs and cooks and establishes a mechanism to fund other non-care professionals for future Fair Work Commission decisions.
The separation of this funding from AN-ACC aligns with the expectation that additional care funding should be spent on delivering care, including increased worker wages.
24/7 registered nurse supplement
The new 24/7 registered nurse supplement commences on 1 July 2023 to support providers to meet the new 24/7 registered nurse responsibility. This supplement has been increased from the previously announced rates to account for the 15% award wage increase for registered nurses.
The new monthly supplement rate will be as follows:
Table 4 Monthly supplement funding
|
Average number of residents per day |
MMM 1-4 (previously published rate) |
MMM 1-4 from 1 July 2023 |
MMM 5-7 (previously published rate) |
MMM 5-7 from 1 July 2023 |
|---|---|---|---|---|
|
1–5 |
$21,416.67 |
$27,667 |
$61,083.33 |
$77,083 |
|
6–10 |
$21,416.67 |
$27,667 |
$55,083.33 |
$69,000 |
|
11–15 |
21,416.67 |
$27,667 |
$48,166.67 |
$63,500 |
|
16–20 |
21,416.67 |
$27,667 |
$41,666.67 |
$53,250 |
|
21–25 |
21,416.67 |
$27,667 |
$32,916.67 |
$42,250 |
|
26–30 |
21,416.67 |
$27,667 |
$25,333.33 |
$32,083 |
|
31–35 |
$15,000.00 |
$19,167 |
$19,000.00 |
$23,833 |
|
36–40 |
$11,500.00 |
$14,750 |
$14,000.00 |
$17,750 |
|
41–45 |
$10,166.67 |
$13,167 |
$12,250.00 |
$15,750 |
|
46–50 |
$9,333.33 |
$11,750 |
$10,250.00 |
$13,583 |
|
51–55 |
$7,666.67 |
$9,833 |
$8,750.00 |
$11,250 |
|
56–60 |
$7,083.33 |
$7,917 |
$8,000.00 |
$8,917 |
|
60+ residents |
No supplement |
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Targeted support under the AN-ACC Transition Fund
From 1 July 2023, a new grant opportunity under the AN-ACC Transition Fund will offer more targeted support to residential aged care services. This includes specific characteristics, such as being located in an isolated community, and/or larger services in remote and very remote locations, who do not fit into the profile of the current BCT categories.
For more information, see AN-ACC Transition Fund.