Care minute countdown is on

Australia’s aged care sector is on the brink of its most significant funding and compliance transformation in years. From October 2025, the way residential aged care providers in metropolitan areas plan, deliver, and report care will fundamentally change.

The government’s new rules link funding directly to the delivery of mandated care minutes in a move that will have major financial and operational consequences for the sector. Here’s what you need to know to prepare, stay compliant, and safeguard your facility’s future.

Why October 2025 is the real deadline

While government penalties for failing to meet care minute targets won’t kick in until April 2026, the groundwork for compliance must be laid much sooner. The October–December 2025 quarter is the first official period where your facility’s care minute performance will determine your funding for the following year.

If you’re not ready by October, you risk not only regulatory action but also a substantial loss of revenue. Providers should note the following dates and actions to keep on top of the change:

June–August 2025: review staffing and care delivery to align with care minute requirements and ensure AN-ACC funding reflects your residents’ needs
September 2025: the Department of Health, Disability and Ageing will release updated, facility-specific care minute targets
October–December 2025: your performance during this quarter will determine your funding for April–June 2026
February 2026: submit your Quarterly Financial Report, including care minute data for the October–December 2025 quarter
April 2026: financial penalties and funding adjustments for non-compliance begin.

What’s changing in the new funding model?

The government is introducing a new care minutes supplement for non-specialised residential aged care homes in metropolitan areas, or MMM1 as defined by the Modified Monash Model. This is how it works:

Base Care Tariff – BCT – reduction: from April 2026, your BCT will be reduced by up to $31.92 per resident per day (based on current AN-ACC pricing)
Care Minutes Supplement: this amount is redirected into a new supplement. If you meet your care minute targets, you receive the full supplement – no change in overall funding. If you fall short, your supplement, and therefore funding, is reduced on a sliding scale
Sliding scale example: meeting 100 per cent or more of both total and registered nurse care minute targets earns you the maximum supplement. The less you deliver, the less you receive, with detailed rates published by the department.

It is important to note this change only applies to non-specialised services in metropolitan areas. Regional, rural, remote, and specialised homelessness services are not impacted, yet.

What counts as a direct care minute now?

Recent updates have clarified, and tightened, what counts toward your care minute targets. This means:

only direct care staff including registered nurses, enrolled nurses, personal care workers, and assistants in nursing are eligible
social and emotional support activities and time delivered by lifestyle staff are no longer included in care minute calculations.

What is the reason behind these changes?

Despite a 59 per cent increase in average care funding since 2022, compliance remains low. In the July–September 2024 quarter, only 45 per cent of all services met both their care minute targets, with compliance even lower in metropolitan areas (43 per cent). The government’s goal is clear: ensure that increased funding translates into more direct care for residents.

The new rules bring a raft of compliance and reporting requirements:

External audits: from the 2025–26 financial year, all residential aged care providers must undergo an annual external audit of care time and associated expense reporting
Monthly reporting: RN coverage must be reported monthly via the Government Provider Management System
Regulatory enforcement: the Aged Care Quality and Safety Commission is actively monitoring and targeting providers who persistently fail to meet targets, particularly in metropolitan areas.

It is imperative providers meet compliance requirements set forth by the department, as failing to do so could result in:

loss of up to $31.92 per resident per day in funding for MMM1 services
regulatory consequences including enforceable undertakings, loss of approval, or court action
increased scrutiny and mandatory audits.

The window for preparation is closing.

Why you must act now

With the October 2025 deadline fast approaching, the window for preparation is closing. Start by assessing your current care minute delivery and documentation practices. Invest in technology and staff training to close compliance gaps. The new funding model rewards proactive, well-prepared providers and penalises those who fall behind.

The future of aged care funding is here. By acting now, you can safeguard your facility’s financial sustainability and deliver the high-quality care every resident deserves. October 2025 isn’t just a date on the calendar, it’s the real deadline for securing your facility’s future.

Dr Tanvi Dalal is the founder and chief executive officer of FicusBridge

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