The Australian Government has confirmed new funding increases for residential aged care from next month – including a 42% jump in the hotelling supplement.
From 1 October 2025, the Australian National Aged Care Classification (AN-ACC) price will lift to $295.64 per resident, per day – a 5.6% rise on last year’s $280.01 rate, and up 33.4% on the original $221.50 set in 2022-23.
The revised figure incorporates the Fair Work Commission’s work value case (17.2%), superannuation guarantee increases (1.2%), and wages and inflation (11.9%), with an additional $1.59 per day for outbreak management.
At the same time, from 20 September 2025, the hotelling supplement will increase from $15.60 to $22.15 per resident, per day. The uplift is intended to help providers cover essential costs such as food, cleaning and laundry, where IHACPA has identified a national average funding gap of $6.24 per occupied bed day – or $12.48 where operators do not charge extra service fees.
Aged care accountants StewartBrown had also highlighted an ongoing gap, estimating hotelling costs remain underfunded by around $8 per bed day, despite the Aged Care Taskforce recommending these costs be fully covered.
The announcement follows ongoing criticism over the late release of AN-ACC pricing. Despite a 2023 commitment to publish rates each August, providers have again been left waiting until September – only weeks before the changes take effect.
Minister for Aged Care and Seniors Sam Rae said the increase “means more funding for aged care homes, supporting higher wages for workers and better care for our loved ones.”
The Government has also extended the AN-ACC Transition Fund for a further 12 months, to support smaller and regional operators adjusting to the funding model.
Sector reaction is expected to focus not only on the size of the uplift, but on whether it is enough to keep pace with escalating workforce and operational costs, and whether it will stimulate investment in new residential beds.
The new AN-ACC price will apply for the period 1 October 2025 to 30 September 2026.
