The average cost of residential aged care per resident per day, according to a costing study by Scyne Advisory (formerly PricewaterhouseCoopers Consulting) commissioned by the Independent Health and Aged Care Pricing Authority (IHACPA), was $352, almost $100 above the current Australian National Aged Care Classification (AN-ACC) price.

This figures comprised:

• $230 (65%) in direct care labour,
• $10 (3%) in direct care non-labour,
• $63 (18%) in hotel costs and
• $48 (14%) in accommodation costs.

Currently, the AN-ACC price is set at $253.82, after the Government increased it by 4% from 1 December 2023 to help residential aged care providers fund the Fair Work Commission (FWC)’s annual wage review decision, which increased the award wage for aged care staff by 5.75% from 1 July 2023. That increase will cost the Government $2.2 billion.

The costing study was conducted between January 2023 and November 2023, so does not include the Fair Work Commission's 15% pay rise for direct care staff, which took effect on 30 June 2023, and higher award wages for the full period.

IHACPA, which began providing annual advice to the Government on the costing and pricing of residential aged care from 1 July 2023, commissioned Scyne to undertake the research to help it determine the price for residential aged care services in 2024-25.

Data was collected from 111 aged care facilities with a range of provider sizes, remoteness, AN-ACC classes, and organisational types. Scyne made a number of recommendations for future costing studies, including increasing the sample size, reviewing the Quarterly Financial Report template and processes, and streamlining the process of securely transferring data from facilities to IHACPA.

The 102-page Costing Study report is available here.