IHACPA releases 2024-25 Aged Care Cost Collection findings

The independent pricing authority has released the results of its 2024-25 Residential Aged Care Cost Collection, which will inform aged care funding from 1 October 2026.

The Independent Health and Aged Care Pricing Authority (IHACPA)’s Residential Aged Care Cost Collection 2024-25 Final Report finds the average cost of delivering residential aged care was $430 per resident per day.

The report notes that care represented 67% of the total bed day cost in 2024-25 – the equivalent of $288.

The current AN-ACC price, Government funding intended to cover care, is $295.64 – about 2.7% higher than the Cost Collection result based on 2024-25 data.

Taking into account a Fair Work Commission wage rise on 1 October 2025 (care labour makes up 58% of the total bed cost) and inflation, it is no surprise operators tell The Weekly SOURCE that aged care funding is not keeping pace with rising expenses. StewartBrown’s 1H26 Survey also showed care earnings were down sharply.

Federal Health and Aged Care Minister Mark Butler has made clear that AN-ACC funding should not include a margin. However, there is growing support, including from StewartBrown, that a margin should be explicitly factored into care funding.

The 2024-25 Cost Collection data will inform IHACPA’s pricing recommendation to Government, although it is up to Government whether or not they accept the recommendation.

The recommendation is generally made in July, and in 2023 the Government committed to publishing new AN-ACC prices in August. However, last year the AN-ACC price, which takes effect from 1 October, was revealed in September, giving operators only weeks to adjust.

Data lags

IHACPA makes 10 recommendations for future cost collections in the Final Report.

Among the recommendations are developing new frameworks to assist with the capture more current data to inform pricing, for example by managing reporting lags and establishing better system linkages to gain more precise financial data.

Cost of care up to $1,800 per resident per day

The Final Report makes some key findings related to residential aged care costs.

• In 2024-25, care labour accounted for 58% of the cost per bed day, which was lower than the 65% for the previous Residential Aged Care Costing Study which was conducted in 2023. Labour is the primary cost driver of residential aged care.
• Permanent residents received an average of 100 minutes of direct care per day, noting this is a different measure to the mandatory care minute target of 215 minutes per resident per day.
• Costs varied enormously, with higher average costs observed in smaller and remote aged care homes and in Government-operated services. MM 6-7 locations recording average daily costs of $768, compared with $419-$460 in MM 1-5 locations. MM 6 and 7 locations had “extremely high cost variability”, with a daily cost of more than $1,800 at the 95th percentile, according to the Report.
• Average daily costs were lowest in Western Australia at $402 and highest in Tasmania at $504. Tasmanian costs also had the greatest variability, rising up to $1,200 per resident per day.
• The costing study also found a “narrowing” in the difference between the lowest and highest AN-ACC classes. Further analysis is needed to provide a “definitive explanation”, the report says.

The main sources of data were time data, collected in real-time from Bluetooth enabled cards and beacons, and financial data, from the Quarterly Financial Report and the Aged Care Financial Report.

The cost collection was led by specialist consultants HealthConsult, which has a Government contract worth more than $17 million to conduct the studies. Health costing specialists PowerHealth (now Telstra Health) and data modellers Venndelta also contributed to the Cost Collection.

The report was released on 28 April 2026, but was dated 20 February 2026, over two months ago.

You can read the report in full here.