At present, aged care homes are paid at the beginning of each month using estimates of the care and services they will provide. From July 2027, this will gradually change, with more funding paid after services have been delivered.

The transition is expected to be completed by 30 June 2029, when funding will be paid in arrears.

Residential aged care homes approved and opened from 1 July 2027 will use the new payment approach from the start.

The government says the new system is intended to:

• make payments simpler
• cut down on administrative work
• make funding easier for providers to manage.

The changes will cover providers receiving funding through the Australian National Aged Care Classification (AN-ACC) and associated residential subsidies and supplements.

The total amount of funding providers receive will not change because of this payment reform.

The new arrangements will not cover residential aged care delivered through the National Aboriginal and Torres Strait Islander Flexible Aged Care Program (NATSIFACP) or Multi-Purpose Service Programs (MPSP). 

New payment model planned for residential aged care

Source: Australian Government- Department of Health, Disability and Ageing. Residential aged care payments for services delivered