In a significant boost for aged care workers, the Australian Government has announced an increase in the Australian National Aged Care Classification (AN-ACC) price to support higher wages for registered and enrolled nurses in the sector.
This move comes as part of the government’s continued response to the Royal Commission into Aged Care Quality and Safety, which exposed severe deficiencies in the system and called for urgent reforms.
As of 1 March 2025, the AN-ACC price increased to $282.44 per resident per day, up from the previous rate of $280.01. This additional funding is designed to help aged care providers cover the higher award wages set by the Fair Work Commission (FWC) in its Aged Care Work Value Case decision. The government will also boost the 24/7 registered nurse (RN) supplement rates by 2.8% from the previous levels.
Further financial support will be delivered through the AN-ACC funding model on 1 October 2025 and 1 August 2026, ensuring sustained investment in workforce remuneration and aged care service quality.
The hotelling supplement – which funds costs related to food, cleaning, and laundry – will also increase. From 20 March 2025, it will rise to $13.46 per resident per day, with an additional increase to $15.60 per resident per day from 1 July 2025. These increases reflect the FWC’s Stage 3 decision and adjustments recommended by the Independent Health and Aged Care Pricing Authority (IHACPA).
Finance Minister and Minister for Women Katy Gallagher emphasised the importance of these wage increases in addressing historical inequalities in the sector.
“This is an area where I think we all recall the Royal Commission which found that the state of aged care in Australia was in a terrible state. Their interim report was titled ‘Neglect’, so that gives you a bit of a picture of how aged care was faring,” Gallagher said.
“Since we came to government and under Anika Wells’ leadership, a lot of work has been done to try and address those failures. Part of that was the recognition of wages of workers in the sector.”
The wage increase is expected to have a direct impact on aged care nurse recruitment and retention, addressing a key challenge in the sector.
“We saw from the minute that aged care workers’ pay increased significantly, the separation rates and the retention rates responded quickly,” Gallagher explained.
“I was speaking with aged care providers who were saying for the first time that they could see staff staying in jobs, they were retaining trained staff, and they were able to attract staff into the vacancies.”
As the aged care sector continues to compete for nurses against hospitals and other healthcare settings, ensuring attractive wages and working conditions remains a priority.
“When you’re competing for nurses, and we know there’s no shortage of competition for nurses, you have to have attractive conditions and wages that compare with what nurses can earn in other settings like hospitals,” Gallagher added.
The government’s decision to boost funding for nurse wages is a positive step towards improving the quality of care in aged care facilities. By ensuring that wages remain competitive, the sector is better positioned to retain experienced professionals and attract new talent, ultimately enhancing the standard of care provided to older Australians.
As demographic shifts continue to place increased pressure on the aged care system, sustained investment in the workforce will be essential to meeting the needs of an ageing population.
The upcoming funding increases signal the government’s commitment to addressing the long-standing challenges in the sector and ensuring a more stable and well-supported aged care workforce.
