The Australian Government provides funding for the aged care system through subsidies and grants. These contributions cover part or all of the costs for aged care services under the Act. The government pays most of its funding contributions as subsidies to providers for services they deliver to an older person through the 4 service groups.
The way the department or a delegate works out the eligible subsidy funding amount depends on:
- the service group – the kind of care the older person is receiving
- the classification type and level for the older person for the service group
- if the service is being delivered through a specialist aged care program.
Types of subsidies
There are 2 types of subsidies: person-centred and provider-based. Both are paid to the registered provider.
Person-centred subsidies:
- apply to all 4 service groups
- are linked to services delivered to an older person.
Provider-based subsidies:
- only apply to ongoing home support or short-term or ongoing residential care service groups
- are meant to help meet the fixed costs of delivering aged care services
- help providers be more flexible in the way they deliver services.
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