A 2.6% AN-ACC Increase Is Not a Lifeline: Small Providers Cannot Afford to Get This Wrong

The Australian Government has confirmed that the AN-ACC price will increase from $295.64 to $303.19 from 1 October 2026.

On the surface, a 2.6% increase sounds like welcome news.

But before anyone starts celebrating, we need to look beyond the headline.

This is an increase of $7.55 per National Weighted Activity Unit. It is not an automatic payment of $303.19 for every resident, every day. What each residential aged care home actually receives will continue to depend on its resident classifications, AN-ACC price weights, Base Care Tariff, occupancy and applicable supplements.

In other words, the headline may say “more funding”, but the real question for every provider is:

How much additional funding will actually reach your organisation—and will it be enough to cover your increased costs?

For many smaller providers, I suspect the answer will be uncomfortable.

The Increase Is Already Behind Cost Pressures

The 2.6% increase is below the reported annual CPI increase of 3.5% to July 2026.

Of course, CPI is not a precise measure of aged care operating costs. Aged care has its own particularly painful collection of rising expenses:

• Workforce and award costs
• Superannuation
• Overtime and agency use
• Workers’ compensation and insurance
• Clinical governance
• Education and competency requirements
• Technology and reporting systems
• Regulatory compliance
• Audit and re-registration preparation
• Allied health and increasingly complex resident care

The Government says the new price aligns funding with the cost of residents’ care across Australia.

Many providers may be forgiven for asking: which Australia?

Because the cost of delivering care in a small regional home, a stand-alone community organisation or a provider operating without a large corporate office is very different from the theoretical “average” cost used to inform national pricing.

The IHACPA Residential Aged Care Pricing Advice 2026–27 is evidence-based and important. However, national averages do not pay an individual provider’s wages, fill an unexpected roster gap or fund another layer of regulatory administration.

The Hotelling Problem Has Not Gone Away

The hotelling supplement will remain at $22.15 per resident per day.

That funding contributes to essential everyday-living services, including:

• Food and catering
• Cleaning
• Laundry
• Utilities and other household expenses

These are not optional luxuries. They are fundamental to the dignity, health and daily experience of residents. Yet food, cleaning and laundry costs continue to rise, and providers are still expected to absorb the difference.

IHACPA is reviewing everyday-living costs, but according to The Weekly SOURCE, advice to government is not expected until December 2027.

That is a long time to keep serving meals, washing linen and paying electricity bills with funding that may not reflect the real cost of delivering these services.

A review in the future does not help a provider manage next month’s expenses.

Small Providers Do Not Have the Same Safety Net

This is where I become concerned about the future of small and stand-alone aged care providers.

Large organisations generally have access to:

• Dedicated AN-ACC teams
• Internal financial analysts
• Clinical governance departments
• Quality and compliance specialists
• Centralised education teams
• Sophisticated reporting systems
• Greater purchasing power
• The ability to spread risk and costs across multiple homes

Many also appear to have achieved a status of being “too large—or too important—to fail.”

When a major provider experiences difficulty, there is significant attention because of the number of residents, employees and services involved.

When a small provider struggles, it can be described as an issue of financial viability, governance or operational performance.

That is not a level playing field.

A small provider can be delivering excellent care, be deeply connected to its local community and still be placed at risk because it lacks the scale and financial buffers available to larger organisations.

One missed reassessment, an incorrect classification or a resident remaining in a default class for too long may be absorbed across a large group.

For a 30, 40 or 50-bed provider, that same loss matters enormously.

Small providers do not necessarily fail because they provide poor care. Sometimes they fail because the system has become so complex that they are expected to be a care organisation, funding specialist, data analyst, compliance department and corporate governance office—all at the same time.

A 2.6% Increase Will Not Fix Poor AN-ACC Governance

As I discussed in The Hidden Revenue Leakage Crisis, AN-ACC is no longer simply an administrative funding process.

It is a governance issue.

If your organisation is not consistently identifying changes in resident care needs, reviewing classifications, preparing for reassessments and monitoring funding outcomes, money may be leaking from the business without anyone fully understanding where it is going.

That leakage commonly occurs through:

• Resident deterioration not being identified
• Delayed reassessment requests
• Residents remaining in default classifications
• Inconsistent mobility evidence
• Poorly described cognitive or behavioural impacts
• Missing pressure-risk evidence
• Compounding factors not being adequately supported
• Contradictions between assessments, care plans and progress notes
• Staff not understanding the AN-ACC branching structure
• Executives and boards receiving inadequate funding-performance information

The Government could increase the AN-ACC price by 5%, 10% or more, but providers will still miss funding if their systems do not identify and demonstrate the resident’s actual care needs.

Documentation is not about exaggerating care requirements or manufacturing evidence.

It is about ensuring that the care being delivered every day is clearly, consistently and accurately represented.

As outlined in our earlier article, What is an AN-ACC Assessment?, the assessor cannot be expected to magically discover everything your team knows about a resident.

If the evidence is vague, inconsistent or missing, the funding outcome may not reflect the actual level of care being delivered.

Funding, Quality and Compliance Cannot Be Separated

I have said this before, and I will continue to say it: funding, quality and compliance cannot operate in separate silos.

In Strategy in Aged Care Is No Longer Optional, I discussed why providers must build integrated systems that support both financial sustainability and compliance.

The same clinical records supporting AN-ACC are also reviewed during:

• Complaints investigations
• Quality audits
• Registration renewal
• Incident reviews
• Clinical governance reporting
• Regulatory monitoring

Poor documentation can therefore expose a provider twice:

1. The organisation may not receive the funding that accurately reflects the resident’s needs.
2. The same documentation may fail to demonstrate that safe, quality and person-centred care was delivered.

That is a financial risk and a compliance risk.

For small providers already working with limited resources, it is not a risk that can be ignored.

What Providers Need to Do Before 1 October

Do not simply add 2.6% to your current AN-ACC revenue and consider the work finished.

Providers should urgently:

• Model the increase using their actual resident-classification profile, Base Care Tariff and occupancy
• Review the classification of every resident whose condition or functional ability has changed
• Identify residents remaining in default classes
• Examine unsuccessful or unexpected assessment outcomes
• Review mobility, cognition, pressure-risk and compounding-factor evidence
• Check for inconsistencies between assessments, care plans and progress notes
• Compare the funding increase against real workforce and operational cost increases
• Report the net financial effect—not merely the headline increase—to the board
• Monitor care funding and everyday-living performance separately
• Ensure managers and clinical teams understand the current AN-ACC assessment expectations

There is now less than a month before the new price takes effect.

This is not the time to wait and see what appears in the payment statement.

ATACA Is Fighting for Small Providers to Remain Viable

ATACA works with providers that do not have unlimited resources, oversized corporate teams or millions of dollars available to absorb preventable funding losses.

We understand the pressures managers are working under because we work directly with them, their documentation and their residents.

We do not begin with software or a generic financial model.

We begin with the resident, the clinical evidence, the care being delivered and the people responsible for documenting it.

Our support includes:

• Resident-by-resident AN-ACC reviews
• Identification of reassessment opportunities
• Review of unexpected classification outcomes
• Documentation and evidence improvement
• RN and care-team education
• Funding-performance analysis
• Governance and executive reporting
• Care-minute and workforce alignment
• Ongoing outsourced AN-ACC support

Small providers deserve more than being told to become more “efficient” while the system becomes increasingly complex and the cost of delivering care continues to rise.

They deserve the opportunity to remain viable, independent and part of the communities they have served for decades.

But survival will require more than hoping the annual AN-ACC increase is enough.

It requires visibility, specialist knowledge, strong documentation and active funding governance.

If you are a small or stand-alone provider, now is the time to have your AN-ACC position independently reviewed.

Not after the revenue has been missed.

Not when the budget is already under pressure.

And certainly not when your organisation is being asked to explain why it is no longer financially sustainable.

Contact Karina Peace at karina@ataca.co for a confidential discussion about how ATACA can support your organisation.

Helping aged care providers maximise funding and strengthen compliance.