The biggest opportunity for aged care operators to shore up their balance sheets right now isn’t waiting on Canberra – it’s in accommodation pricing.
12 months after it was first pledged, the Federal Government has finally confirmed the details of its review into residential aged care accommodation pricing.
At the Ageing Australia National Conference on Tuesday, 30 September, Aged Care and Seniors Minister Sam Rae announced Nigel Ray PSM and Associate Professor Nicole Sutton will lead an independent review, tasked with examining the accommodation supplement, incentives for providers to invest in new beds, and pricing arrangements for residents.
The final report will not land in Parliament until 1 July 2026, meaning reforms are months – if not years – away.
Two points stand out
First, why appoint a bureaucrat and a researcher rather than an accountant or someone with operational expertise who understands the financial realities of running aged care?
Second, with no conclusions expected until mid-2026, and likely another year before reforms are implemented, providers cannot afford to wait.
Rising costs, weak incentives
Yes, the review is a step forward. Operators have long warned that the current supplement risks discouraging investment and leaving low means residents without access to quality beds.
With construction costs climbing – up to $800,000 to build a bed in some regional areas – the sector desperately needs better settings to encourage investment.
But here’s the reality: providers already have levers they aren’t pulling. Since 1 January 2025, operators have had the ability to raise Refundable Accommodation Deposits (RADs) to $750,000.
Yet Mirus data shows just 36% of homes have increased a price beyond $550,000 this year, with the national average RAD sitting at $572,489 at the end of July – only an 8.7% lift since December 2024.
StewartBrown’s forecasts point to RADs reaching an average of $680,000 by FY29 – still well below the $750,000 cap.
At the same time, the latest AN-ACC funding settings appear set to drive margins on care down to zero. The message is clear: operators can no longer rely solely on Government policy to restore financial sustainability. Accommodation pricing is one of the few immediate levers they can control.
The Government’s review may eventually deliver fairer and more sustainable funding. But the courageous operators will be the ones who act now – not in 2026. Those who wait risk being left behind.
