About the residential aged care subsidy
The Australian Government pays registered providers to deliver care and services for each aged care resident. This funding is known as the ‘subsidy’.
Each person entering permanent care has a residential aged care funding assessment to work out their AN-ACC classification. This determines the funding you receive to meet their assessed care needs. If eligible, you also get supplements on their behalf.
Learn more about permanent care subsidy and supplements.
For respite care, refer to residential respite care subsidies and supplements.
Calculating the subsidy
To calculate the government funding for each resident:
- start with the AN-ACC daily basic subsidy
- add any initial entry adjustment payments
- add any primary supplements
- subtract any reductions
- add any other supplements
AN-ACC daily basic subsidy
The AN-ACC daily basic subsidy has 2 components:
- a variable component based on the resident’s AN-ACC classification.
- a fixed component (Base Care Tariff or BCT) to account for shared costs across all residents which vary by location and type of provider.
View the current rates in the Schedule of Subsidies and Supplements.
For more information about AN-ACC daily basic subsidy.
Initial entry adjustment payment
Providers receive this payment each time a person enters permanent residential aged care. This helps to cover costs associated with transitioning a new resident into care.
View the initial entry adjustment payment rate in the Schedule of Subsidies and Supplements.
Primary and other supplements
Supplements provide extra funding for specific care needs.
For some supplements, we automatically check eligibility for you. For others, you need to apply on a resident’s behalf.
View the daily supplement rates in the Schedule of Subsidies and Supplements.
Reductions
Reductions apply if the resident gets a compensation payment or pays care fees.
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.
When a resident is on some types of temporary leave, you will still get the subsidy up to a certain number of days.
Subsidy payments
You will get advance payment in the first few days of each month. Services Australia estimates the payment amount based on past payments.
When they get a claim form, Services Australia checks the advance payment against the form. If needed, Services Australia will either:
- make an extra payment in the following month
- reduce the following month’s payment.
Services Australia may deduct other amounts from the payment, such as:
- amounts to repay capital grants
- recovery of overpayments.
Starting 1 July 2026, we are transitioning to a payment system based on services delivered. Providers will transition incrementally over 2-years to minimise disruption.
Who decides the subsidy rates?
The Australian Government sets the subsidy and supplement rates.
The Independent Health and Aged Care Pricing Authority (IHACPA) provide advice to Government to inform changes to AN-ACC and the hotelling supplement. .
You can participate in IHACPA’s consultations to help inform pricing advice.
When can the subsidy vary?
Subsidy rate changes
Changes to AN-ACC funding occurs on 1 October each year, following pricing advice from IHACPA.
The Hotelling supplement is indexed annually on 20 September, following consideration of pricing advice by IHACPA.
Supplements that relate to accommodation are indexed twice a year, on 20 March and 20 September, in line with pension increases.
Temporary leave
If a resident takes leave from their aged care home, their subsidy may decrease, depending on the type of leave they take and how long their leave is for.
Find out how leave affects subsidy payments.
