The long-awaited Independent Review of Residential Aged Care Accommodation Pricing was released on 22 April 2026. Authored by Mr Nigel Ray PSM and Associate Professor Nicole Sutton, the 83-page report makes 18 recommendations, and the Federal Government has used the 2026 Budget to begin a $3 billion response.
For providers who have been waiting on policy clarity before committing to capital decisions, the Review now provides it. It also sharpens a question we have been working through with clients for some time: how does your organisation generate the surplus from non-care revenue that funds quality, growth, and reinvestment?
What the Review delivers
The recommendations cluster into four themes.
What the Review does not do is hand out an across-the-board uplift. Most of the new capital subsidies are tied to investment after 1 November 2025. Established homes trading at break-even will not see a meaningful revenue change without action.
A more competitive market by design
The reforms reward providers who actively manage their accommodation strategy. Removing price caps and reapproval cycles gives confident operators pricing flexibility they did not have before. The new conversion-rate freedom changes the economics of RAD versus DAP. The supported-resident loadings reward providers who deliberately specialise.
What boards and executives should do now
Three actions are time-sensitive.
Stress-test your accommodation pricing against the post-Review settings. If your room prices were anchored to the $550k or $750k thresholds, or if you have not formally reviewed pricing in the past 12 months, there is almost certainly revenue being left on the table.
Model your supported resident ratio honestly. The new loadings, the High Supported Resident Loading at 60%, and the proportional interest-free loan scheme all reward providers who know their position and have a plan. The Review also asks existing homes to maintain their ratio within five percentage points of 2024-25 levels for three years — so the position you take now sets the boundary on what comes next.
Treat capital decisions as reversible only until they are not. Land sales, exits, and major refurbishments evaluated under the old regime should be re-tested. The economics of a regional rebuild, a memory support upgrade, or a future two-tier strategy can look fundamentally different under the new package.
How we help
Our Review process assesses your current room pricing, market segment, capital position, and additional services exposure against where the market is now moving. We then take the guesswork out of accommodation pricing drawing on facility pricing reports and competitor analysis to design cost-recovery structures that hold up under the new settings, including a Higher Everyday Living offer that stands up if consumers opt out. We’ll then provide you with a strategy to support the build, refurbish, or exit decisions the Review has now made urgent, including how to prepare for a future in which RADs may need to be refunded without being replaced like-for-like.
