The federal government has confirmed $1.1 billion in future funding provisioning to increase and restructure the Accommodation Supplement paid to residential aged care providers, including a new additional payment specifically targeted at homes with more than 60 percent low-means residents.
The measure forms part of the broader $3.7 billion aged care funding package announced in the 2026-27 Budget, and directly addresses a long-standing concern that facilities caring for a high proportion of low-means residents face particular financial pressure under the current funding model.
What the Accommodation Supplement Does
The Accommodation Supplement is a government payment made to aged care providers to help cover the cost of accommodation for residents who cannot afford to pay the full market rate themselves. Facilities with a higher proportion of low-means residents — meaning residents with limited assets and income — have historically faced a more difficult financial position, since they receive less revenue from resident-funded accommodation payments while carrying the same underlying facility costs.
Why Targeting Low-Means Facilities Matters
Advocates have long warned that without adequate government support, providers could face financial pressure to limit the number of low-means residents they accept, effectively reducing access to quality aged care for older Australians without significant assets. The new targeted payment for homes with more than 60 percent low-means residents is designed to directly counter this pressure, protecting equity of access regardless of a resident’s financial position.
Part of the Broader $1.7 Billion Bed Investment
This funding sits alongside the separate $1.7 billion commitment to incentivise construction of up to 5,000 new aged care beds annually from 1 July 2027, along with new capital subsidies for providers who build or expand residential accommodation — together representing a substantial push to both grow and equitably fund residential aged care capacity.
What It Means for Providers and Families
For aged care providers, particularly those serving lower-income communities or regional areas with a higher proportion of pensioner residents, the restructured supplement should improve financial viability and reduce pressure to limit low-means admissions. For families seeking placement for a low-means relative, the changes are intended to support continued and potentially improved access to quality residential care, regardless of financial circumstances.
Timing
Full details on implementation timing for the restructured Accommodation Supplement are expected to be released as the broader aged care funding package rolls out progressively through 2026 and 2027.
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