Frequently asked questions

The Independent Health and Aged Care Pricing Authority (IHACPA) is an independent agency established under the National Health Reform Act 2011.

IHACPA was formerly established as the Independent Hospital Pricing Authority (IHPA) as part of the National Health Reform Agreement to contribute to significant reforms to improve Australian public hospitals. A major component of these reforms is the implementation of national activity based funding through the annual determination of the national efficient price and national efficient cost. 

These determinations play a crucial role in calculating the Commonwealth funding contribution to Australian public hospital services and offer a benchmark for the efficient cost of providing those services as outlined in the National Health Reform Agreement.

On 12 August 2022 amendments to the National Health Reform Act 2011 came into effect changing IHPA’s name to IHACPA and expanding its role to include the provision of advice on aged care pricing and costing matters to the Commonwealth and the performance of certain functions conferred by the Aged Care Act 1997.

The Independent Health and Aged Care Pricing Authority sets the national efficient price (NEP) and the national efficient cost (NEC) and price weights based on national data provided by the state and territory governments.

The NEP is a major determinant of the level of Commonwealth Government funding for public hospital services and provides a price signal or benchmark for the efficient cost of providing public hospital services. The NEC is for services that are not suitable for activity based funding, such as small rural hospitals. IHACPA undertakes several major areas of work designed to inform the annual determination of the NEP and NEC including ongoing consultation with all Australian health departments, expert advisory committees and key stakeholders.

We work in partnership with the Australian Commission on Safety and Quality in Health Care to ensure that pricing, quality and performance measures for public hospitals are complementary and facilitate a strong national framework for the delivery of public hospital services.

IHACPA’s work also covers policy development to resolve disputes on cross-border issues between the states and territories and provides advice and reporting to all Australian governments and the public.

Activity based funding (ABF) is a way of funding hospitals whereby they get paid for the number and mix of patients they treat. Put simply, if a hospital treats more patients, it receives more funding. However, because some patients are more complicated to treat than others, ABF also takes into account various adjustments.

A key aim of the National Health Reform Agreement is to move as much funding as possible to an activity basis and away from block funding to provide more transparency in regards to where funding is going and to improve efficiency. ABF aims to empower the health sector to drive continuous improvement and value for money in the delivery of public hospital services.

IHACPA is governed by a Pricing Authority. Members of the Pricing Authority bring significant expertise and skills to the role, including substantial experience and knowledge of the health industry, healthcare needs, the aged care industry, and the provision of health care in regional and rural areas.

The Pricing Authority is supported by a Chief Executive Officer, who is IHACPA’s only employee. The CEO is responsible for the day-to-day running of the agency. All other staff are seconded from the Department of Health, Disability and Ageing to IHACPA. IHACPA staff report to the CEO under a Memorandum of Understanding with the department.

All Australian Public Service (APS) employees must follow the APS code of conduct. View the code of conduct procedures.

IHACPA is required to publish details of Statutory Appointments. This list is published in accordance with the requirements for the Information Publication Scheme under the Freedom of Information Act 1982.

The national efficient price (NEP) is a set amount that is used to work out the funding for a public hospital activity.

A public hospital service operating at the NEP will be able to:

• Provide episodes of patient care (on average, across all types of care, as measured using agreed classifications) and other services (including teaching, training and research) at or below the national benchmark price.
• Respond to evidence based initiatives to improve patient care including new technologies.
• Provide services at a quality level consistent with national standards, and to minimise negative consequences that fall on patients (including those attributable to poor quality and safety) or on other parts of the service system.
• Make choices about how best to deliver services to ensure that people receive the ‘right care at the right time in the right setting’.

IHACPA determines the NEP for public hospital services through the analysis of data on actual activity and costs in public hospitals. Costing information used to determine the NEP is drawn from the National Hospital Cost Data Collection (NHCDC). This data is submitted to IHACPA by state and territories.

The national efficient price (NEP), the national efficient cost (NEC) and the national weighted activity unit (NWAU) are determined annually. The NWAU is the unit of measure of the activity based funding system. Each year, IHACPA publishes a Pricing Framework for Australian Public Hospital Services (Pricing Framework) – a key policy document which helps guide the development of the NEP and NEC.

The Pricing Framework is developed in consultation with the Commonwealth, state and territory governments, IHACPA's key health stakeholders and the general public prior to being finalised. IHACPA uses this consultation process to ensure all needs are met when delivering the NEP and the NEC.

In determining the NEP and NEC, IHACPA considers the need to ensure reasonable access to public hospital services, safeguard clinical safety and quality, and the efficiency, effectiveness and financial sustainability of the public hospital system.

In very simple terms, the national weighted activity unit (NWAU) multiplied by the national efficient price provides the total cost of a hospital service.

The NWAU allows activity across a range of settings to be compared – for example, inpatients, outpatients and emergency patients. It provides a scale that identifies the relative measure of resource use of each public hospital service. Specific examples of costs are available.

The annual Pricing Framework for Australian Public Hospital Services outlines the scope of public hospital services eligible for Commonwealth funding.

The National Health Reform Act 2011 and clauses A9–A17 of the National Health Reform Agreement, defines public hospital services eligible for a Commonwealth funding contribution to be:

• all admitted services, including hospital-in-the-home programs
• all emergency department services provided by a recognised emergency department service
• other outpatient, mental health, subacute services and other services that could reasonably be considered a public hospital service.

If a service is not suitable for activity based funding, such as a small rural hospital, it will receive block funding through the national efficient cost.

IHACPA uses an indexation methodology to account for the time lag between the costing data used and the price to be set. IHACPA reviews the indexation methodology each year in preparation for determining the national efficient price.

Activity based funding is an episodic funding model – this means that for the vast majority of patients, a single payment is made for their stay in hospital – which means that the hospital has a strong incentive to ensure that patients are kept in hospital only as long as they need to be.

The model also recognises that some patients require more care/treatment and makes additional payments to these patients to ensure that the hospital is not disadvantaged by treating them.

No. Block funding still exists for some hospitals which have been recognised as unsuitable for activity based funding.

The National Health Reform Agreement stipulates that the Commonwealth will provide block-funding amounts for relevant services in regional and rural communities via a state managed fund.

Both the Commonwealth, states and territories are committed to maintaining a flexible approach to health and community services delivered to small, isolated communities and funding agreements will reflect this.

IHACPA determines the national efficient cost for block-funded services.

No. The national efficient price determines only the Commonwealth contribution to public hospital funding. As system managers, the states and territories will set the volume of services to be provided by each local hospital network via a service agreement. States and territories can also choose to pay a price that is higher or lower than the national efficient price or national efficient cost if they choose to.

No. This is why IHACPA was also given the role of determining adjustments to reflect legitimate and unavoidable variations in the costs of delivering healthcare services. The full list of adjustments can be found in the national efficient price section of the IHPA web site.

These include an adjustment for:

• Indigenous patients
• patients who required treatment in an intensive care unit
• patients treated in specialist paediatric hospitals
• patients who live in outer regional, remote and very remote areas of Australia
• subacute paediatric patients
• specialist psychiatric care.

No. The National Health Reform Act 2011 specifies that the national efficient price is only applied to public hospital services in Australia. IHACPA does however consult closely with private health stakeholder groups which sit on IHACPA's stakeholder advisory committee.

Classification aims to provide the health care sector with a nationally consistent method of classifying all types of patients, their treatment and associated costs in order to provide better management, measurement and funding of high quality and efficient healthcare services.

Classifications are comprised of codes that provide clinically meaningful ways of relating the types of patients treated by a hospital to the resources required. They enable hospital and health service provider performances to be measured by creating a link between the patients treated and the resources consumed for providing those treatments. This allows hospital and health service provider output to be measured, which forms the crucial data for policies on funding, budgeting and setting costs.

Effective clinical classification systems ensure that hospital data is grouped into appropriate classes, which in turn contributes to the determination of the national efficient price and national efficient cost.

There are six patient service categories in Australia currently which have classifications being used nationally or in development stage.

• Admitted acute care
• Subacute and non-acute care
• Non-admitted care
• Mental health care
• Emergency care
• Teaching, training and research

More information is available in the Classification section of the IHACPA website.

The AR-DRG and ICD-10-AM/ACHI/ACS products and licences that can be purchased include:

• ICD-10-AM Alphabetic Index
• ICD-10-AM Tabular List
• ACHI Alphabetic Index
• ACHI Tabular List
• Australian Coding Standards
• AR-DRG Definitions Manual (Volumes 1-3)
• Mapping tables between ICD-10-AM/ACHI editions
• Electronic Code Lists (ECLs)

You may purchase any of the AR-DRG and ICD-10-AM/ACHI/ACS products and materials by visiting the AR-DRG Classification System Product Sales website.

Please note that purchasing of the ECLs requires entering into a licensing arrangement with IHACPA, which sets out the terms and conditions for the use of the ECLs.  To enquire about the ECL licensing arrangement, please contact us.

Further information on the AR-DRG Classification System is available on the IHACPA website including:

• international licensing arrangement
• licence Agreement for governments
• Software Developer Licence Agreement
• how to purchase classification system materials and products.

Please note that if you are from outside Australia, your country must be licensed for the AR-DRG classification system before you can purchase any the materials and products above. Please see ‘How to purchase a Licence Agreement’ for more information on entering into a licence for the AR-DRG classification system.

If you have any questions regarding how to purchase the AR-DRG products and materials, please contact us here.

To calculate the national efficient price and national efficient cost, activity and cost data is provided by state and territory jurisdictions.

IHACPA receives activity data from each jurisdiction on a six-monthly basis. This data includes inpatient admissions, emergency department presentations and outpatient appointments as well as a range of mental health and rehabilitation services.

In addition to activity data, each year IHACPA receives cost data from jurisdictions via the National Hospital Cost Data Collection (NHCDC). The NHCDC collates the vast majority of health system costs at a ‘product’ level.

Further information is available in IHACPA’s Three Year Data Plan.

IHACPA’s activity and cost data collections provide the primary input for the national efficient price (NEP) and national efficient cost (NEC). Once data is collected it is analysed by IHACPA using a pricing model. This price model is then used to produce the NEP and NEC Determinations for each financial year.

You contact us by email enquiries.ihacpa@ihacpa.gov.au or by calling +61 2 8215 1100.

IHACPA provides the Australian Government with expert residential aged care, residential respite care and in-home aged care pricing and costing advice that reflects the costs of delivering care. Our advice is independent, transparent, evidence-based and consultative. 

When developing our advice we balance a range of objectives. This includes promoting the standard of high-quality care expected by the community and required by government policy and legislation.

While our role is to provide pricing advice to the Minister for Health and Ageing, it is government who determines and announces the prices for aged care services. Following agreement from the minister, we publish our pricing advice on our website.

We are also responsible for assessing applications from registered providers of aged care to charge residents a higher maximum accommodation payment amount as a refundable accommodation deposit or equivalent daily amount. 

Our work is guided by the minister’s Expectations Setting Paper and our Statement of Intent.

Pricing refers to the development of pricing advice to government based on analysis of activity and cost data.

Costing refers to analysis of the care related costs in the delivery of residential aged care, residential respite care and in-home aged care services.

No. For Australian public hospital services, we determine the national efficient price and national efficient cost for public hospital services each year.

In contrast, our role in aged care pricing is advisory. Government remains responsible for determining and announcing prices for residential aged care and residential respite care, and the Support at Home service list.

IHACPA provides annual pricing advice to government on the costs of care and how changes in the cost of care may be considered when making funding decisions. We ensure our pricing advice is informed by a range of evidence, including cost collections and stakeholder feedback. 

The Department of Health Disability and Ageing is the aged care System Governor. The department is responsible for the policy and administration of aged care subsidies, supplements and grants, funding policy settings, broader aged care funding, system management and providing policy advice to government on these matters. These responsibilities are outside the scope of our pricing and costing advice.

The Australian Government provides subsidies to registered residential aged care providers through the AN-ACC funding model. AN-ACC aims to provide equitable funding to providers that better matches residents’ needs and the costs of delivering care. AN-ACC funding is provided for aged care services and is not intended to support hotelling and accommodation expenditure.

IHACPA provides annual residential aged care pricing advice to government, informing decisions on the AN-ACC price and price weights for each AN-ACC class, respite class and base care tariff category.

The management of AN-ACC funding model remains the responsibility of the Department of Health, Disability and Ageing.

No, we do not determine a resident’s AN-ACC class.

For more information about AN-ACC assessments, see the AN-ACC assessment process and classification information on the Department of Health, Disability and Ageing’s website.

A key element of our pricing advice relates to the AN-ACC funding model. Elements of care included for the AN-ACC funding model are set out in Chapter 1, Division 8-150 and Division 8-155 of the Aged Care Rules 2025 for residential and clinical care.

We consider a range of cost differentials by service size, type or location and the costs associated with specific resident groups and the AN-ACC classes.

IHACPA’s Pricing Authority relies on a number of different data sources to inform the design and key parameters of the model when providing pricing advice. We undertake regular data collections and consider other available cost and activity data such as the Aged Care Financial Report and Quarterly Financial Report data. We also seek input from stakeholders through annual public consultations and our advisory committees.

Cost collections ensure that the costs of aged care are accurately captured, and that pricing advice is directly informed by the costs of delivering care. This helps to ensure funding is sustainable, transparent and meets the needs of older Australians.

Our cost collections gather cost and activity data from a wide range of aged care providers, with different geographic, demographic and individual characteristics. This ensures our pricing advice reflects the variation in care requirements and costs across a diverse sector. In particular with underrepresented geographical locations, provider and service types.

Our cost collections continue to be refined over time. Each cost collection builds upon the data collected from the previous one. This improves accuracy and expands our understanding of targeted areas.

Our pricing advice considers the impact of wage increases on costs, only where these have been determined by the Fair Work Commission. Where a wage determination is made and takes effect outside of our advice cycle, the Minister for Health and Ageing may seek additional advice from us.

We note that any future Fair Work Commission decisions on minimum wage increases may impact our pricing advice.

We do not assess the appropriateness of wages within the aged care sector.

No. We do not provide advice on means testing arrangements or the appropriate level of resident contributions in aged care. This is the responsibility of government.

Our aged care pricing and costing advice is informed by consultation with a broad range of stakeholders across the aged care sector. This includes providers across the for-profit, not-for-profit and government sectors, residents, in-home aged care participants, families, carers, and anyone with an interest in aged care.

Each year, we publish a consultation paper with a set of questions. This explains how we plan to develop our pricing and costing advice. It also highlights key issues and future priorities for consideration.

We then use the feedback gathered to develop our pricing framework, which is the key policy document used to inform our pricing advice to government.

Yes, we value all feedback to our public consultations. It’s important that we hear from as many voices as possible. This ensures our pricing advice is representative and reflective of the diversity of the aged care sector and the community.

Through our public consultation, you have the opportunity to tell us what is important to you in developing our pricing advice.

Visit our engagement hub to find open and past consultations on our work in aged care

IHACPA is an independent government agency. We play a key role in ensuring fairness and transparency in the pricing of accommodation in residential aged care. We assess and approve or not approve applications from registered providers of residential aged care to charge refundable accommodation deposits above the maximum accommodation payment amount prescribed by the Aged Care Rules 2025. 

Visit Our role in aged care accommodation for more information.

A RAD is the lump sum payment you pay for a room (or part of a room) at a residential aged care home, if you are not eligible for Australian Government assistance. 

You can find more information about accommodation payments by visiting About refundable accommodation approvals and My Aged Care. 

A provider can charge you for a room or part of a room as a refundable accommodation deposit, or the equivalent daily payment, up to the maximum amount prescribed by the Aged Care Rules 2025 (section 289-5).

Visit the Department of Health, Disability and Ageing’s website for current information about the maximum amount.

A provider must have a valid approval from IHACPA to charge more than the maximum amount. Approvals expire after 4 years. 

No. Under the Aged Care Act 2024, registered providers can charge a RAD, up to and including the maximum accommodation amount, for a room in a residential care home without approval from IHACPA. 

If your provider has approval to charge a RAD above the maximum accommodation payment amount for rooms, they will have an approval letter from IHACPA or the former Office of the Aged Care Pricing Commissioner (ACPC). The letter will confirm the maximum price that can be charged for a given room. 

From 1 July 2025, providers are allowed to apply an annual index to their approved amount using the consumer price index.

Providers must publish the maximum amount they intend to charge for a room on the My Aged Care Find a provider webpage. 

You can request to see a copy of the approval letter from your provider. The approval must be current for the date you agreed to your room price in writing.

If you think your provider did not have a valid approval to charge the amount you paid on the date you agreed to your room price, please refer to the Aged Care Quality and Safety Commission’s (the Commission’s) fact sheet for more about your rights. You can also contact the Commission and ask for advice. 

When reviewing your provider’s approval letter, you should check that:

• the name of the service aligns with the service where your room is located
• the approval date covers the date you agreed to your room price in writing
• the room number you are paying for is listed in the table on page 2, however some letters may not list room numbers
• you are not being charged more than the price listed in the approval letter or the price listed in the letter with allowable indexation
• if you are sharing a room, the price you have agreed to is no more than the price listed in the approval letter for a dual occupancy room.

You may find the approval letter is issued by the Aged Care Pricing Commissioner (ACPC). This is because, before August 2022, assessment and approval of higher refundable accommodation deposit amounts was the responsibility of the ACPC. Your provider’s approval letter may still be valid even if it is on ACPC letterhead, as long as more than 4 years have not passed since the date of approval.

Providers may apply indexation to an approved refundable accommodation deposit (RAD) amount. This means adjusting the price to be in line with inflation.

If a provider has applied indexation to an approved RAD, they should publish the new amount on their website, on My Aged Care and in their written materials to prospective residents. They should do this before they enter into any new accommodation agreements. They can only charge the indexed amount to new residents who enter care on, or after, the day the indexation was applied. 

If your provider shows you a conditional approval letter, ask to see the Satisfaction of Conditions letter, too. This way you can make sure that they have a valid approval to charge a higher refundable accommodation deposit (RAD) price.

Your provider may have received a conditional approval to charge a RAD higher maximum accommodation payment amount from IHACPA or the former the Aged Care Pricing Commissioner. This means their approval is subject to conditions, such as completion of a refurbishment or construction programme. 

Your provider cannot publish or charge you the amounts listed in a conditional approval letter until we have verified that the conditions of the approval have been met. Your provider must receive a Satisfaction of Conditions letter confirming that they can commence charging the higher amount. 

If your provider did not have a valid approval on your room price agreement date, they cannot charge you more than the maximum accommodation payment amount while you reside in that room. 

Visit the Department of Health, Disability and Ageing’s website for current information about the maximum amount.

If you think your provider may have charged you a refundable accommodation deposit more than the maximum amount without a valid approval in place at the time you agreed to your room price in writing, talk to your provider about your concerns first. 

If you need help to do this, you can contact the Older Persons Advocacy Network (OPAN) for free advocacy support on 1800 700 600 (free call) or visit the OPAN website. An advocate can support you to exercise your rights and resolve your concerns.

If you cannot resolve your concerns by talking with your provider or need other support, contact the national regulator of residential aged care homes, the Aged Care Quality and Safety Commission. You can call them on 1800 951 822 or visit the Commission’s website.

More information about what to do if you think a provider has overcharged you is available in the Commission’s fact sheet Overcharged accommodation payments - Your rights.

The indexation of the maximum accommodation payment amount every year on 1 July will have no impact on the amount of accommodation costs payable for residents currently in care. There will still be a range of accommodation available at lower prices.

Your aged care provider can only charge you the room price you agreed in writing and that is set out in your accommodation agreement. 

This applies even if there has been a change to the maximum accommodation payment amount. 

If you are not eligible for Australian Government assistance with your accommodation costs, you are still liable to pay the same room price you agreed with your aged care provider before entering care. Providers cannot charge more than:

• the room price agreed with you before you entered care
• the room price advertised on My Aged Care, the provider’s own website and in any published materials for residents.

More information about accommodation costs can be found on My Aged Care.

If you have a concern or complaint about your refundable accommodation deposit (RAD) that you cannot resolve by talking to your provider, or need other support, you can contact the Aged Care Quality and Safety Commission on 1800 951 822 (free call) or visit the Commission’s website. They can also help you if you need to translate information.

For free advocacy support, or if you need help to raise a concern with your provider about your RAD, you can call the Older Persons Advocacy Network (OPAN) on 1800 700 600 (free call) or visit the OPAN’s website.

IHACPA is an independent government agency with functions conferred by the Aged Care Act. We play a key role in ensuring aged care accommodation prices represent value to residents through an assessment of the proposed price in relation to the quality, condition, features and amenities of a service. Registered providers of residential aged care who plan to charge refundable accommodation deposits (RADs) above the maximum accommodation payment amount prescribed by the Aged Care Rules 2025, are required to seek IHACPA’s approval before charging a resident.

For more information, visit About RAD approvals.

If you already have an approval from IHACPA to charge a maximum accommodation payment amount, it will not expire because the maximum accommodation amount changes every year on 1 July. The approval will remain valid, but will no longer be required. 

The maximum accommodation payment amount is indexed annually to the consumer price index. Read more about indexation.

For more information, visit the Department of Health, Disability and Ageing’s website.

More information about the Aged Care Taskforce and the Australian Government’s response can also be found on the department’s website.

To apply for approval to charge RAD above the maximum accommodation payment amount, please follow the instructions on our webpage Apply for a RAD approval.

It is important you submit your application at least 60 days before your existing approval expires, if you wish to continue to charge RAD prices above the maximum accommodation payment amount. We recommend you submit an application at least 4 months before a current approval expires, to allow for the assessment process, including requests for information notices.

If you do not receive a new approval before your current approval expires, you must not charge above the maximum accommodation payment amount until you receive a decision from IHACPA.

No. The form to apply for approval to charge a higher refundable accommodation deposit amount is the same whether you have applied for approval before or not.

You can find instructions included in the refundable accommodation deposit (RAD) application form to help guide you. The completed examples of the form and RAD data sheet on our website also show what you need to provide in your application responses.  

It is important that you provide the correct information and supporting documents with your application. This will help with the timely processing of your application. If we need to contact you to submit further information, the assessment period may be affected.

If you need to speak to someone about your application, contact us at applications.accommodation@ihacpa.gov.au or call (02) 8215 1100.

We will send you a decision letter within 60 days of receiving your complete application. However, requests for information may affect this. 

It is important that you provide all the information requested in the form, and the accompanying refundable accommodation deposit data sheet, to facilitate processing of your application.

A request for information letter is a formal request for additional information. It is used to help us decide the outcome of your application.

We may issue you with a request if:

• there is insufficient information in your application
• the information you have provided requires clarification
• you have not provided evidence for specific factors considered in our assessment and requested in the application form (for example, cost factors).

If you receive a request for information related to a refundable accommodation deposit (RAD) application form, the 60-day statutory assessment period is paused until you provide your response. 

You must respond within 28 days of receiving our request, or in accordance with the timeframes set out in the letter. If we do not receive a written response from you by the due date, your application will be automatically withdrawn. You will then have to submit a new application if you wish to charge RADs above the maximum accommodation payment amount.

IHACPA complies with the Privacy Act 1988 and the Australian Privacy Principles. We are committed to the protection of personal information.

To ensure the privacy of individuals is maintained, it is important that the photographs and data you submit in support of your application do not contain personally identifiable information. This information could be about residents, visitors, contractors or staff.

Before submitting your application, please make sure you:

• Review all photographs. If your submission contains images of residents, staff, visitors or names (for example on labels or other documentation captured in the photograph) you must redact or erase parts of the photograph before submitting it.
• Review your data sheet and other documents you are providing to support your application. If your submission contains any identifying information, like care recipient names, bank details, client reference numbers or addresses, you must redact the document before submitting it.

If you provide images or documents containing personally identifiable information, we will delete them and you will need to resubmit the information. This may extend the assessment process and delay our decision.

For more information, view our privacy policy.

If your residential aged care home is under construction, or refurbishment works have not been completed, you can apply for ‘conditional approval’. For more information, see the Refundable accommodation deposit approval process.

You cannot charge your conditionally-approved price until you receive a Satisfaction of Conditions letter from IHACPA. You cannot charge the approved amount until you have published the new amount on your website, on My Aged Care, and in your written information provided to residents.

There is no separate form to apply for a conditional approval. 

You will need to complete the refundable accommodation deposit application form on our website and provide the following supporting documents:

• evidence of your projected construction costs
• floor plans, including size of rooms and common areas
• architectural renders and design documents, including a schedule of fit-out and fixtures with photographs, if available
• a detailed room description, including any accompanying furniture, features or outlooks, such as photographs, if available
• the expected completion date of your build.

You can submit your application for conditional approval as soon as you are able to supply the supporting documents required in the application form.

Under subsection 290-30 of the Aged Care Rules 2025, if you have a conditional approval to charge refundable accommodation deposits above the maximum accommodation payment amount, you must write to IHACPA to have your conditional approval verified. You must do this before advertising your prices on My Aged Care, your website or in written information provided to residents.

Your submission for verification should include evidence that:

• your construction or refurbishment has been completed
• the costs of construction or refurbishment estimated in your application reflect the actual costs incurred
• the quality and condition of rooms is equivalent to, or better than, the proposal described in your application. 

We will process your application for verification of your conditional approval within 28 days and, if satisfied, issue you with a Satisfaction of Conditions letter confirming that the conditions attached to your conditional approval have been met. You must not charge or advertise a higher accommodation payment amount until you have received this letter.

A Satisfaction of Conditions letter is issued to a registered provider after we have verified that they have met the conditions attached to a conditional approval.

If you have a conditional approval to charge refundable accommodation deposits above the maximum amount, you must write to IHACPA to obtain final approval. This will be indicated in your Satisfaction of Conditions letter which is required before charging or advertising your prices on My Aged Care, your website or in written information for residents.

Approvals cannot be backdated to cover the period between approval dates.

No. The approved higher RAD amount can only be charged from the approval date shown in your approval letter from IHACPA, and you have published it on your website, on My Aged Care and in your written information provided to residents.

Applications for approval to charge higher RADs take 60 days to process, not including the time it takes for you to respond to any request we may have for further information. 

It is important that you submit your application at least 60 days before your existing approval expires, if you wish to continue to charge RAD prices above the maximum accommodation payment amount. 

If you do not receive a new approval before your existing approval expires, you must go back to charging the maximum accommodation amount until you receive a new decision from IHACPA.

Approvals cannot be given retrospectively. They cannot be backdated to cover the period between approval dates.

There is no separate form to apply for a conditional approval. 

You will need to complete the refundable accommodation deposit (RAD) Approval Application Form on our website and provide the following supporting documents:

• evidence of your projected construction costs 
• floor plans including size of rooms and common areas
• architectural renders and design documents (including a schedule of fit out and fixtures with photographs if available)
• a detailed room description including any accompanying furniture, features or outlooks (including photographs if available)
• the expected completion date of your build.

You can submit your application for conditional approval as soon as you are able to supply the supporting documents required in the application form.

Under Section 26(3) of the Fees and Payments Principles 2014 (No 2), if you have a conditional approval to charge refundable accommodation deposits (RADs) above the maximum accommodation payment amount you must write to IHACPA to have your conditional approval verified before advertising your prices on My Aged Care, your website or in written information provided to residents.

Your submission for verification should include evidence that:

• your construction or refurbishment has been completed
• the costs of construction or refurbishment estimated in your application reflect the actual costs incurred 
• the quality and condition of rooms is equivalent to or better than the proposal described in your application. 

We will process your application for verification of your conditional approval within 28 days and if satisfied, issue you with a ‘Satisfaction of Conditions’ letter confirming that the conditions attached to your conditional approval have been met.  You must not charge or advertise higher prices until you have received this letter.

A ‘Satisfaction of Conditions’ letter is issued to an approved provider after we have verified that they have met the conditions attached to a conditional approval.

If you have a conditional approval to charge refundable accommodation deposits above the maximum accommodation payment amount you must write to IHACPA to obtain final approval, as indicated by a ‘Satisfaction of Conditions’ letter before charging or advertising your prices on My Aged Care, your website or in written information for residents.

Your approval letter documents the maximum RAD amount you can charge residents as an accommodation payment. It also has the date on which you can start charging that amount (the approval date).

You may charge a resident the approved amount or less than the approved amount. However, you cannot charge more than the maximum RAD amount you have advertised on your website, My Aged Care (MAC) and any published materials for residents.

It is your responsibility to update your website, MAC and any published materials provided to residents before you start charging higher maximum RADs.

No. The approved higher RAD amount can only be charged from the approval date shown in your approval letter from IHACPA. You cannot start charging the approved higher RAD amount until you have published it on your website, on My Aged Care and in your written information provided to residents.

Applications for approval to charge higher RADs take 60 days to process, not including the time it takes for you to respond to any request we may have for further information. 

It is important that you submit your application at least 60 days before your existing approval expires if you wish to continue to charge RAD prices above the maximum accommodation payment amount. If you do not receive a new approval before your existing approval expires, you must go back to charging the maximum accommodation amount until you receive a new decision from IHACPA.

From 1 July 2025, the maximum accommodation payment amount of $750,000 will be indexed to the Consumer Price Index each year on 1 July.  This means you will need ensure you do not charge an amount higher than the maximum accommodation payment amount that is current for the year you enter into a new agreement with residents, unless you have approval from IHACPA to do so. 

Approvals cannot be given retrospectively. They cannot be backdated to cover the period between approval dates.

If you have charged an amount above the maximum accommodation payment amount as a RAD without a valid approval in place, you should:

• notify the Aged Care Quality and Safety Commission (the Commission) that you have charged a RAD above the maximum accommodation payment amount without valid approval in place (overcharged)
• work with the Commission to correct any errors and help you meet your legislative responsibilities.

For more information about what to do if you have charged a RAD above the maximum accommodation payment amount without a valid approval, please contact prudential@agedcarequality.gov.au. You can also review the Commission’s fact sheet Overcharged accommodation payments.

IHACPA endeavours to send reminder emails to providers with existing approvals before they expire. However, it is your responsibility to ensure your approvals are current. 

You should make sure you have robust governance systems in place to record your approval expiry dates, so that you do not inadvertently continue to charge a higher refundable accommodation deposit after your approval has expired. If your approval expires, you must revert to charging and advertising the maximum accommodation payment amount. You must do this until you receive a new approval from IHACPA. 

Approvals cannot be given retrospectively and cannot be backdated to cover the period between approval dates.

You should make sure your contact details with IHACPA are up to date, so that we can get in touch with you. If you need to update your contact details, please email us at applications.accommodation@ihacpa.gov.au or call (02) 8215 1100 (option 2). You can also subscribe to our mailing list.

If you do not have access to approval documentation from IHACPA, or the former Aged Care Pricing Commission (ACPC), you will need to submit a written request to us at applications.accommodation@ihacpa.gov.au.

If you have acquired a new residential aged care home that has rooms advertised above the maximum accommodation payment amount, you should check that:

• you have approval letters from IHACPA or the ACPC to charge refundable accommodation deposit (RAD) prices above the maximum accommodation payment amount and those approvals are valid (current)
• you have a final approval for any conditional approvals transferred to you as indicated by a Satisfaction of Conditions letter. You need this before you can start charging or advertising the approved amount.

If you charge, or have charged, a RAD above the maximum accommodation payment amount without a valid approval in place, you must notify the Aged Care Quality and Safety Commission (the Commission). The Commission will work with you to correct any errors and help you meet your legislative responsibilities. More information can be found in the Commission’s fact sheet for providers: Overcharged accommodation payments.   

From 1 July 2025:

• the maximum accommodation payment amount is indexed to the consumer price index each year on 1 July
• this means you will need to ensure you do not charge an amount higher maximum accommodation payment amount that is current for the year you enter into a new agreement with residents, unless you have approval from IHACPA to do so. 

You should submit your application to charge a higher RAD at least 60 days before you plan to open your new residential aged care home or enter into accommodation agreements with new residents. 

Alternatively, you can apply for conditional approval at any time before the completion of your build. 

If you have received a conditional approval for higher RADs, you will need to apply to IHACPA to have your conditionally approved RAD price/s verified. You should do this at least 28 days prior to the date you wish to start charging the higher amount. 

Importantly, you cannot charge or advertise conditionally approved prices on your website, in your published materials or on My Aged Care. You must wait until you receive final approval from us as indicated by a Satisfaction of Conditions letter.

No. You cannot include higher everyday living fee (HELF) services in your proposed RAD price if you charge an additional service fee. For example, if you charge HELF for an in-room television, you cannot use the cost of providing this feature to justify your proposed higher RAD price.

You can find more information about additional service fees on the Department of Health, Disability and Ageing’s website. Additional service fees cannot be charged for:

• services outlined in the Residential Care Service List
• services required as part of your provider responsibilities
• services already covered by the payment of an existing extra service fee or services included in HELF or the accommodation (RAD) price.

Before you can start charging an approved higher refundable accommodation deposit amount, you must publish the amount:

• on the My Aged Care website
• on your own website
• in your published material provided to residents and their representatives.

Information submitted in an application is considered ‘relevant information’ and may be considered ‘protected information’ as defined under the Aged Care Act 2024. ‘Relevant information’ and ‘protected information’ will only be used or disclosed in accordance with that Act.

If required, we may share relevant information about your application and approval to support the legislative responsibilities of the:

• Department of Health and Aged Care as the system operator
• Aged Care Quality and Safety Commission as the national regulator.

More information about the arrangements in place to support the coordination, cooperation and information sharing between Agencies can be found on our Exchange of letters and our website. 

No. IHACPA must consider a range of factors as set out in Division 2, subdivision B of the Aged Care Rules 2025 when deciding whether to approve a higher refundable accommodation deposit (RAD) amount. 

We assess all information provided in an application to decide whether the rooms included in each accommodation group represent value to residents.

An increase in the median house price in your area alone is not enough to show us that a higher RAD provides value to residents. 

You need to show us how the quality and amenity of the accommodation on offer at your residential care home supports charging a price above the maximum amount. 

You should also provide an analysis of your competitors and where your residential care home fits within the local market. More information about the factors you should consider when proposing a higher RAD can be found on our website.

You can apply to charge a higher refundable accommodation deposit (RAD) for a room or a part of a room. If you are applying for part of a room (that is, where a room is shared), you must clearly explain how the part of the room is worth more than the maximum RAD amount.

Under the Aged Care Act 2024, providers are required to regularly deduct part of each eligible resident’s RAD or refundable accommodation contribution (RAC).

This retention will apply only to residents entering care after 1 November 2025, under new fee arrangements introduced by government. Residents who entered care prior to 1 November 2025 are exempt from RAD retention.

Providers are to retain 2% per annum (applied as a daily rate), for a maximum of 5 years per resident, capping the total retention at 10% of the RAD. RAD and RAC retentions are calculated based on the daily balance and deducted regularly. These retained amounts are not refundable when the resident exits care. 

For more information about retention amounts, visit the Department of Health, Disability and Ageing’s website.

No. You can only apply indexation to an approved refundable accommodation deposit price that is above the maximum accommodation payment amount. For more information and guidance about indexation, please visit our website.

Yes. Under subsection 290-40 of the Aged Care Rules 2025 you can apply indexation to approved RADs annually (from the second year of approval) using the consumer price index. There is a calculator on our website to assist you to do this.

You do not need to seek approval from IHACPA to apply indexation to your approved price. If you decide to index, the indexed price substitutes your existing approved price.

Your approval letter shows the dates from which you can apply indexation. After 4 years you must apply for a new approval to charge higher RADs. 

If you have applied indexation to an approved RAD, you should publish the new amount on your website, on My Aged Care and in your published materials for prospective residents. 

Apply indexation before you enter into any new accommodation agreements. You can only charge the indexed amount to new residents who enter care on, or after, the day the indexation was applied.

No, you can only apply indexation for the current year. If you have not applied indexation for one or more years you cannot catch up by applying indexation retrospectively. 

Indexation can be applied to the maximum approved RAD or, if you have previously indexed, the indexed amount.

Once you index your maximum approved RAD, you are not locked into applying indexation each year of your approval after.  You can apply indexation one year and not the next.      

No. You can apply indexation annually at any time from the anniversary date of your approval. After 4 years you will need to re-apply for a new approval.

If you decide to index, the indexed amount substitutes your existing approved price. If you continue to apply indexation in subsequent years, you should use the previous year’s substituted indexed price (the indexed amount) to calculate it.

The indexation date starts on the date you choose to start charging the indexed refundable accommodation deposit. You can start on the anniversary date or within the anniversary year. However, the anniversary date of the original approval remains the date on which you can start to apply indexation in subsequent years. You can only apply indexation from the anniversary dates listed in your original approval letter.

No. You can index the approved amount in line with the provisions of your approval, even when this may take the approved RAD amount above the new maximum payment current at the time.