How Does AN-ACC Funding Work — and What Does It Mean for Your Cash Flow?
The short answer
AN-ACC care funding combines a facility-level Base Care Tariff with a variable component linked to each resident’s assessed care needs. The AN-ACC price rose to $303.19 from 1 October 2026, but that is a pricing input, not a flat payment for every resident. Forecast using the current tariff, classification mix, occupancy and payment adjustments. Track supplements separately.
The Australian National Aged Care Classification replaced ACFI (the Aged Care Funding Instrument) in October 2022. It was a significant structural change: instead of funding based on assessments across three care domains, funding now flows from each resident's classification into a specific AN-ACC class — combined with a fixed facility component. For providers that carried institutional knowledge of ACFI, the adjustment took time.
The difficult part is turning the funding model into a reliable cash forecast. A new admission, an assessment adjustment or a change in occupancy can move income without changing the headline price. A forecast that simply multiplies that price by occupied beds will miss those differences.
This guide explains the funding structure and the records you need to forecast receipts. The worked example uses invented round-number inputs to show the method; it is not a schedule of government payment rates.
What are the main parts of residential aged care funding?
AN-ACC care funding includes a fixed Base Care Tariff and a variable component reflecting a resident’s classification. The facility’s characteristics and assessed care needs both matter. Supplements, including hotelling, sit alongside care funding and should be tracked separately.
The Department’s October 2026 update sets the AN-ACC price at $303.19, compared with $295.64 previously. It states that the hotelling supplement remains $22.15 per resident per day. Neither figure means every resident attracts the same total payment. Use the current subsidy schedule and your service’s actual entitlements.
Keep the effective date of each rate in your model. A price change part-way through a month or financial year should not be applied retrospectively to all days of care.
What happens when a new resident is admitted?
Record the admission date, assessment status and the applicable funding classification. Where a default classification applies pending assessment, treat it as provisional rather than a permanent forecast assumption. Reconcile any later adjustment against the payment advice.
Track any eligible one-off entry payment separately from recurring daily income. Mixing it into your average daily rate makes an admission-heavy month look more profitable than a steady-state month.
Keep respite and permanent-care income separate. Apply the relevant current rules rather than assuming that a permanent resident’s classification and payment structure can be used for respite care.
How do you model cash flow using AN-ACC rates?
Start with each resident’s applicable daily entitlement and eligible days of care. Add the appropriate fixed component and supplements, then account for adjustments. The following example assumes 50 residents for a 30-day month and deliberately uses hypothetical rates, not current AN-ACC rates.
| Component | Assumed daily rate | 50 residents per day | 30-day total |
|---|---|---|---|
| Illustrative variable component | $170.00 | $8,500.00 | $255,000.00 |
| Illustrative fixed component | $140.00 | $7,000.00 | $210,000.00 |
| Illustrative supplement | $20.00 | $1,000.00 | $30,000.00 |
| Total | $330.00 | $16,500.00 | $495,000.00 |
These rates are invented modelling assumptions. Replace them with verified entitlements for your facility and resident mix. The table shows revenue earned, not the timing of cash receipts.
Reconcile your model to Services Australia payment statements each month. Investigate changes in occupancy, classifications and adjustments rather than treating the difference as a general forecasting error.
What does AN-ACC mean for cash flow timing?
At the time of writing, residential providers generally receive an estimated advance early in the month, followed by reconciliation once the monthly claim is processed. An underpayment can lead to an arrears payment; an overpayment can reduce a later advance. Do not assume that all funding is currently paid one month in arrears.
The Department has announced a transition towards payment on services delivered from July 2027. Build the applicable transition timetable into a separate cash scenario and check current guidance before changing your working-capital assumptions.
Keep earned revenue, submitted claims and bank receipts as separate lines in your forecast. Include payroll dates, supplier payments, resident contributions and expected adjustments. A profitable month can still require a cash buffer.
Home care has a different funding model. Our Support at Home cash flow guide discusses that separately; do not carry residential payment assumptions across to home care.
What financial reporting do aged care providers need?
Check the Department’s current Quarterly Financial Report and annual financial reporting requirements for your provider type. The October 2026 funding guidance also describes the requirement to attest that additional funding for award wage increases has been passed on to eligible workers.
For management, report occupancy, classification-driven income, payroll and care-minute costs alongside cash received. Compare actual results with the forecast and explain the cause of each material difference. Keep supplements and resident contributions visible rather than folding everything into one income figure.
If you want help building a forecast around your facility’s actual funding and costs, start with the contact form.
Sources
- Department of Health — Residential aged care funding update
- Department of Health — About funding for residential aged care
- Department of Health — Paying residential providers on services delivered
This article is general information, not financial or tax advice. Worked examples use illustrative figures. Check current program rules and speak to a registered tax agent about your own circumstances.
