Funding for permanent residential aged care

How we fund permanent residential aged care

The Australian Government funds registered providers to deliver care for older people permanently living in an aged care home. This funding is known as the ‘daily basic subsidy’.

In addition to the daily basic subsidy, new permanent care residents also receive an initial entry adjustment payment.

Providers may also receive supplements on behalf of eligible residents. Alternatively, see funding residential respite care.

About the daily basic subsidy

As a registered provider, you are paid the daily basic subsidy for each person in your care approved for government-funded permanent residential aged care.

The daily basic subsidy is payable for each day a permanent care resident is in your care.

The AN-ACC daily basic subsidy has 2 components:

• Base Care Tariff – fixed subsidy to meet shared costs of delivering care.
• AN-ACC classification – variable subsidy to meet resident’s assessed care needs.

Base Care Tariff (BCT) subsidy

The BCT subsidy is the fixed funding component that covers care-related costs that don’t vary much with individual resident or small changes in occupancy. For example, providing general oversight of residents eating in common areas.

There are 8 BCT categories to reflect the overall needs of the approved residential care home depending on:

• location, using the 2023 Modified Monash Model (MM location)
• specialisation, for homes that provide care for residents who are homeless and at risk of homelessness, or remote Aboriginal and Torres Strait Islander people.

The BCT subsidy is paid per occupied bed (i.e., in use) or per operational bed (i.e. available for use) depending on the BCT category (see Table below of the BCT categories).

Residential care homes automatically receive a BCT category based on their MM location. If eligible, you can apply for specialised status funding.

For more information, see the AN-ACC funding guide and AN-ACC specialised status guide.

AN-ACC classification subsidy

The AN-ACC classification subsidy is the variable funding component that covers the cost of meeting each permanent care resident’s individual care needs.

There are 13 AN-ACC funding classes for permanent care residents. Each class represents residents with similar clinical characteristics and daily care costs.

Permanent care residents are generally assigned their AN-ACC class based on a residential aged care funding assessment (funding assessment). For planned palliative care admissions, a funding assessment is not required. Instead, you will submit a palliative care status form, which includes an assessment by a medical practitioner.

You can view your residents’ AN-ACC classifications in the My Aged Care Service and Support Portal.

For more information, see section 4 of the AN-ACC funding guide.

Funding assessments

Each resident must have a residential aged care funding assessment (funding assessment) to determine the appropriate AN-ACC class that meets their assessed care needs.

When a person enters permanent residential aged care, a referral for an initial classification assessment will trigger after you notify Services Australia.

When a resident’s care needs change, you can request a reclassification assessment through the My Aged Care Service and Support Portal.

Find out what you need to do to prepare for funding assessments.

For more information, see section 6 and 7 of the AN-ACC funding guide.

Default rates

You will receive a default variable subsidy rate during the period between a permanent care resident entering your care and when they are assigned an AN-ACC class.

The default rates are equal to:

• AN-ACC Class 8 subsidy for residents not entering for palliative care.
• AN-ACC Class 1 subsidy for planned palliative care admissions.

Once the resident is assigned an AN-ACC class, the variable subsidy for the actual classification will replace any default subsidy paid up to that time.

Any difference between the actual and default subsidy will be adjusted through the Services Australia payment system.

Initial entry adjustment payment

Under AN-ACC, you are paid a one-off initial entry adjustment payment each time a permanent care resident enters your residential care home. This includes when a resident:

• moves from another residential care home
• transfers from residential respite to permanent care in the same home.

This payment covers costs related to transitioning a resident into a new care environment. For example, the initial planning and monitoring required for new residents.

How to claim

You must submit an online claim each month to Services Australia. You must include the details of each aged care resident you’re claiming a subsidy for in that month.

You need to notify Services Australia of any events or changes for residents in your care before completing your monthly claim. This ensures you get the correct subsidy amount.

For example, when a resident is on some types of temporary leave, you will still get the subsidy up to a certain number of days.

Learn more about claiming for residential aged care funding.

Current rates

The Australian Government sets the AN-ACC variable and fixed subsidy rates.

These are subject to change on 1 October each year, following pricing advice from the Independent Health and Aged Care Pricing Authority (IHACPA).

For current rates, see the Schedule of Subsidies and Supplements.

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