Hotelling supplement remains $22.15 a day for now; IHACPA estimates a $5.81 daily everyday living deficit where homes received no extra or additional service fees in 2023-24

What happened on 20 September

The department describes the supplement as one that funds registered providers of approved residential care homes to help meet the cost of providing everyday living services, including catering, cleaning and laundry. Every registered provider of an approved home gets it automatically, except homes in the Multi-Purpose Services Program.

Its page on the supplement, last updated 26 March 2026, says how the rate changes: The hotelling supplement is indexed each year on 20 September, following consideration of pricing advice by the Independent Health and Aged Care Pricing Authority. The department’s broader supplements page, last updated 16 July 2026, puts it more loosely: the supplement is subject to change on 20 September each year.

This year it did not change. The department’s schedules of subsidies and supplements for rates effective at 20 September 2026 and at 1 October 2026 both give the daily rate as $22.15, applicable from 20 September 2025. The Aged Care Rules, compiled to 20 September 2026, say the same in section 230-5: the amount of hotelling supplement is $22.15, a fixed figure in the Rules rather than a formula.

The hotelling supplement, date by date

1. 1 Jul 2023Introduced at $10.80 a resident a day, replacing an earlier $10 basic daily fee supplement.
2. 2023-24Paid at $11.04 on average over the year, the base year of IHACPA’s latest advice.
3. 20 Sep 2025Increased to $22.15.
4. 2 Sep 2026The Government’s release: For now it stays at $22.15, while IHACPA reviews it.
5. 20 Sep 2026The date the department’s page gives for indexation. Still $22.15. No change
6. No dateIHACPA’s review, which it calls multi-year. Neither IHACPA nor the Government gives an end date.

Why: the Government’s words, and the review behind them

The reason was given on 2 September, in the same release that announced the new AN-ACC price of $303.19 from 1 October.

For now, the hotelling supplement will remain at its current rate of $22.15 per resident, per day.

The release says the Government asked IHACPA to review the supplement, and that This review is currently underway and will inform Government decisions on any changes to the supplement.

IHACPA’s fact sheet on its 2026-27 advice describes the review as multi-year, on how location or resident-specific factors affect the cost of everyday living services. Its outcomes will inform any recommendations on the supplement, which may include a proposed new structure such as tiering, and then government will make a decision on whether the hotelling supplement could be funded using an alternative approach. That is a review that could change the supplement’s shape, not only its amount. It is not a decision, and no date is attached to it.

What it means for residents

A resident on the 1 November 2025 fee arrangements pays the basic daily fee and, depending on their means, a hotelling contribution and a non-clinical care contribution, separately from accommodation costs. Both contributions are means tested, and the fee schedule notes that Services Australia advises the contribution amount for a resident.

The hotelling contribution is tied to the supplement in the Act. Section 278 of the Aged Care Act 2024 caps a resident’s hotelling contribution at the maximum hotelling supplement amount, which section 235(4) defines as the highest amount the Rules prescribe for the supplement. A resident with means not disclosed pays that maximum. So when the supplement stayed at $22.15, so did the most a resident can be asked to pay towards it.

From the department’s schedules of fees and charges for residential care from 20 March 2026 and 20 September 2026 (p 1 of each). The last row is the maximum accommodation supplement amount, a daily means tested amount; under section 278 of the Act a resident pays a hotelling contribution only on daily means tested amounts above it. Changes are our arithmetic.

For a resident who pays the full hotelling contribution, that is $22.15 a day that did not rise, against a basic daily fee that rose $2.13, or 3.19 per cent (our arithmetic). The threshold above which the contribution starts rose by $1.43, so a resident who pays only part of the maximum may find their contribution slightly lower, depending on how their own means tested amount moved. What any one person pays is Services Australia’s assessment, not a figure to read off a table.

IHACPA’s arithmetic: the national average balances, homes without extra fees do not

Each year IHACPA’s residential pricing advice includes an estimate of the gap between what everyday living services cost a home and the revenue it gets for them. Its 2026-27 advice, dated July 2026 and published on 2 September, built that estimate on the supplement staying where it is:

This Advice assumes that government will continue to provide a hotelling supplement of $22.15 per resident per day, equal to the rate of the supplement applicable from 20 September 2025.

So IHACPA’s estimate describes the world the Government then chose: no rise on 20 September. On that footing it gives two figures for the year from 20 September 2026 to 19 September 2027, per occupied bed day: a surplus of $0.18 for all homes nationally, and a deficit of $5.81 for homes that did not receive revenue through additional service fees or extra service fees in 2023-24.

Everyday living revenue against cost, per resident a day, 20 Sep 2026 to 19 Sep 2027 (IHACPA estimate)

All homes

1. Revenue$98.22
2. Cost$98.04
3. Gap+$0.18

Homes with no extra or additional service fee revenue in 2023-24

1. Revenue$91.85
2. Cost$97.66
3. Gap-$5.81

• Basic daily fee $69.04
• Hotelling supplement $22.15
• Extra and additional service fees $6.17
• Other
• Cost

The national surplus is smaller than the fee revenue inside it. Extra and additional service fees are worth $6.17 a resident a day in the all-homes figure (our arithmetic from IHACPA’s table), against a margin of $0.18. IHACPA explains why it counts them: those fees are out of scope for its advice, but the cost of the services they pay for cannot be separated in the data, so it compares total revenue with total cost. That is a reasonable way to handle data it cannot split. It also means the national figure is not a test of whether the basic daily fee and the supplement alone cover everyday living.

IHACPA is careful about the second figure too. Because homes in some parts of the market may be more likely to charge those fees, its advice says the estimate for homes without them is not considered to be nationally representative of the everyday living cost gap across the aged care sector. Its technical specifications put those homes at 22.8 million occupied bed days out of 62.4 million in the cost data it used, a little over a third (our arithmetic). The two estimates are best read as a range, not a single answer.

A year earlier, the gap IHACPA estimated was larger

IHACPA has made the same estimate before, under the older name of the hotel cost gap. The two editions use different years of cost data and different assumptions about the supplement, so the change between them is not a measured fall in costs. Set side by side, they show what the September 2025 increase did to the arithmetic.

IHACPA’s estimate, two editions, per resident a day

1. 2025-26 adviceFor 2025-26, built on 2022-23 cost data and a supplement assumed to average $15.91 with CPI indexation. Gap: $6.24 short across all services, $12.48 short where there were no additional or extra services. Both exclude maintenance, estimated separately.
2. 2026-27 adviceFor 20 Sep 2026 to 19 Sep 2027, built on 2023-24 cost data and a supplement of $22.15. Gap: $0.18 surplus across all homes, $5.81 short where there was no extra or additional service fee revenue. Current

IHACPA’s fact sheet says it in its own terms: everyday living costs exceeded revenue in 2023-24, but revenue is estimated to have grown faster since, including the supplement’s rise from $11.04 on average over 2023-24 to $22.15 from 20 September 2025, and the twice-yearly increases to the basic daily fee.

One piece of arithmetic is worth putting on the record. The 2025-26 advice assumed a supplement of $15.91 and estimated a gap of $6.24. Add the two and you get $22.15, the rate set from 20 September 2025. That is our arithmetic, not anyone’s stated method: no document we read says that is how $22.15 was chosen.

Our view

Holding the supplement while IHACPA works out whether it should be tiered is a defensible call, and the Government’s own adviser built its estimate on exactly that hold. On IHACPA’s figures, everyday living across all homes now roughly breaks even, which it did not in the adviser’s previous estimate. For residents who pay the full hotelling contribution, the freeze is a small mercy in a month when the basic daily fee went up.

Two things sit less comfortably. First, the break-even is an average that includes $6.17 a day of extra and additional service fees. Homes that took none of that revenue in 2023-24 are estimated, as a group, to be $5.81 a resident a day short, and the review that might change that is, in IHACPA’s word, multi-year. “For now” is open ended for those homes. Second, the department’s own hotelling supplement page still says the supplement is indexed each year on 20 September. On 20 September 2026 it was not. A provider budgeting from that page would have expected a rise that did not come; the page should say what the Minister said.