At 11:40am, lunch service starts to take shape: regular meals, easy to chew, minced and moist, puréed. Thickened fluids, fortified meals, supplements, allergies, preferences. Then, a last minute diet switch because someone’s swallowing status has changed since breakfast. And nobody standing in that kitchen is thinking about AN-ACC classifications – they’re thinking about getting every plate right.
This week, a $7.55 increase reopened a much bigger conversation about the real cost of aged care. From 1 October, the AN-ACC price will increase from $295.64 to $303.19. Providers have already raised concerns that the 2.55% increase doesn’t keep pace with wage growth, inflation and rising operating costs, with some describing it as ‘a real terms cut’.
That’s an important conversation. But while we’re asking what it really costs to provide care, there’s another question worth putting on the table.
What does it actually cost to feed an aged care resident well?
Not simply what the ingredients cost, but what it costs to run the system that gets breakfast, lunch and dinner safely and consistently onto the plate.
Food cost is not just the cost of feeding someone.
Ask what an aged care home spends on food and the answer will often be expressed as a single figure: food cost per resident per day. Which is a useful benchmark, but it only tells part of the story.
StewartBrown’s March 2026 benchmarking puts food, supplements and related consumables at around $18 per resident per day. Once catering labour and preparation are included, total food and preparation expenditure is around $45 per resident per day across surveyed homes, and $46.76 for homes providing catering in-house.
That gap matters because between buying ingredients and serving lunch sits an entire operating system:
- Culinary and catering labour
- Ordering and storage
- Menu planning
- Texture modification
- Food safety
- Equipment and utilities
- Cleaning and waste, plus
- Training and communication between catering, care and clinical teams.
Australian researchers have even developed a dedicated Foodservice Costing Tool to capture foodservice expenditure more comprehensively. Their work found total foodservice costs substantially exceeded food expenditure alone and identified additional meal-related work being performed by staff outside the foodservice team.
Food cost tells us what the food costs, but it doesn’t tell us what feeding the resident costs.
The resident population has changed
We also can’t discuss the economics of aged care food without looking at who now lives in residential care.
A Registry of Senior Australians study followed 509,944 people entering permanent residential aged care between 2006 and 2015. Over that decade, the proportion entering with high frailty increased from 19.7% to 49.7%, while the proportion entering with five to nine comorbidities also increased.
More recent AIHW data shows just how dependent the current residential population is. At 30 June 2024, 96% of permanent residents with an AN-ACC assessment had some level of mobility need: 57% were classified as having assisted mobility and 39% as not mobile. More than half of people living in permanent residential aged care, 54%, have dementia.
A 2024 Australian study by O’Shea and colleagues assessed 711 residents across 10 aged care homes in NSW, South Australia and Queensland and found 40% were malnourished.
These aren’t simply clinical statistics. They fundamentally change what it takes to feed someone well.
One resident may eat independently from the standard menu. Another may require a Level 4 Puréed meal, thickened fluids, fortification, supplements, encouragement throughout the meal, and close monitoring of intake.
Another may have dementia, poor appetite, an allergy and strong cultural food preferences. Someone else’s swallowing status may change between breakfast and lunch.
From the kitchen’s perspective, these aren’t equivalent foodservice propositions.
When complexity becomes volume
Experienced aged care chefs will recognise another change that national datasets don’t measure particularly well.
Gone are the days when texture-modified food necessarily meant feeding 100 residents with just two puréed meals sitting at the end of the production line. In many homes, texture modification has become a substantial production stream of its own.
We don’t currently have a national longitudinal dataset telling us exactly how the proportion of texture-modified meals in Australian residential aged care has changed, and I’m not going to invent a percentage to make the argument sound stronger.
I don’t need to.
The surrounding resident profile already tells us that frailty, dementia, functional dependency, malnutrition and swallowing difficulty are substantial features of contemporary residential aged care. And when food complexity becomes volume, the operational consequences spread well beyond simply producing a different meal.
Texture modification can change workflow, batch production, menu design, plating, ingredients, fortification, IDDSI quality assurance, training, communication, meal service, feeding assistance and food waste.
More importantly, complexity rarely arrives neatly in one category. Dysphagia may sit beside malnutrition risk; dementia beside poor intake; texture modification beside feeding assistance.
The workload compounds.
Geography changes the cost of lunch
Resident complexity is only one variable, as the location and size of the home matter too.
StewartBrown’s March 2026 benchmarking (linked above) shows average catering expenditure of $43.37 per resident per day in metropolitan MM1 homes, compared with $49.74 in MM5 small rural locations. Catering labour alone rises from $21.85 in MM1 to $29.83 in MM5.
That’s a catering-cost difference of almost 15% before we’ve changed the resident.
The reasons aren’t difficult to understand. Smaller facilities have fewer economies of scale and fixed kitchen costs spread across fewer residents. Regional and rural services can face higher logistics costs, tighter labour markets, less supplier competition and fewer opportunities to outsource.
Those external pressures are moving as well. ABS data has recorded sharp increases in road freight prices, with fuel surcharges being a significant driver, while The Reserve Bank has reported that businesses are passing higher transport and fuel costs through supply chains, including hospitality.
The cost of lunch doesn’t begin when the chef opens the cool room door. It begins much further up the road.
We measure care complexity. What about food complexity?
This is the part I keep coming back to. AN-ACC recognises that residents don’t cost the same to care for. Mobility, cognition, function and other compounding factors influence classification and funding because the system accepts that different resident profiles require different resources.
Then those same residents arrive at lunch.
One eats independently from the standard menu. Another requires texture modification, fortified food, supplements, thickened fluids, supervision, encouragement and ongoing communication between clinical, care and catering teams.
AN-ACC already accepts that they’re different care propositions. So why would we assume they’re equivalent foodservice propositions? This is a question that exposes a measurement gap.
Australia can measure AN-ACC classifications, care minutes, funding weights, food spend, catering labour and even geographic differences in catering costs. Yet nationally, some basic questions remain surprisingly difficult to answer:
- How many texture-modified meals does Australian residential aged care produce every day?
- What’s the incremental cost of feeding a resident with dysphagia, malnutrition risk and high mealtime-assistance needs compared with someone eating independently from the standard menu?
- How much work outside the catering department is required to make the meal successful?
- What does increasing resident complexity actually cost once it reaches the kitchen and dining room?
That doesn’t mean aged care needs another mountain of forms or another reporting burden for already stretched providers. It means we may need better ways of understanding the work already being done.
We’ve become increasingly sophisticated at measuring the complexity of care. We may need to become equally sophisticated at understanding the complexity of feeding the people receiving it.
Policy may already be heading there
IHACPA’s current multi-year review of the Hotelling Supplement is examining differences in the cost of providing everyday living services according to factors including Modified Monash location, a resident’s assessed AN-ACC class and service size. The review may ultimately inform a different structure, including possible tiering of the supplement.
That deserves attention.
The Hotelling Supplement is only one component of everyday living funding and shouldn’t be mistaken for a stand-alone food budget. Required everyday living services are supported through the Basic Daily Fee and Hotelling Supplement, and the Government has confirmed that the supplement itself will remain at $22.15 per resident per day from 1 October while IHACPA’s review continues.
But the review acknowledges the larger point: delivering everyday living services may not cost the same for every resident, in every home, in every part of Australia.
For those working in aged care food and dining, none of this will come as a surprise, but you may be thinking: why has it taken us so long to start measuring it?
Expectations have risen too
The expectations placed on aged care food have rightly become more sophisticated. We’re no longer talking only about calories, a rotating menu and whether the meal passed a temperature check; today the conversation includes safety, nutrition, genuine choice, culture, texture modification, presentation and the dining experience itself.
None of that should be wound back. But greater resident complexity and higher expectations both require capability, and there’s a limit to how much can simply be absorbed through another round of “efficiency”, restructuring and tighter budgets.
Good procurement matters. Menu engineering, waste control and labour productivity matter too.
But at some point, the question must shift from “How do we stretch the budget further?” to “Do we properly understand what we’re asking the food system to deliver?”
Back to lunch
By now it’s probably 12 o’clock. The regular meals are moving, the puréed plates still have to look like something someone wants to eat, someone needs their drink thickened, and someone doesn’t like what they ordered. And another resident needs encouragement to keep eating.
None of them experiences a funding model: they experience lunch.
And increasingly, that lunch is being produced for residents with more complex needs, across very different operating environments, while expectations of food, nutrition and dining continue to rise.
But before we ask kitchens to keep stretching the number, we should probably make sure we understand what the number is supposed to cover. Feeding a resident isn’t just about a repeatable dollar figure – it’s also about whether food spend adequately describes what that dollar figure really covers.
