Exclusive: CHA warns Govt risks repeating NDIS price cap error

Two months out from the introduction of Support at Home price caps, Catholic Health Australia says new price ceilings are unnecessary.

Changes under the new Aged Care Act, effective 1 November 2025, have required Support at Home operators to lift prices as administration costs have been rolled into hourly service prices, rather than charged separately as they were under the old system.

The changes have been painful for consumers, with many choosing to reject Support at Home services due to the higher prices, which come alongside new consumer co-contributions.

As providers grapple with these challenges, the Government is due to implement Support at Home price caps from 1 July 2026.

“The intention for caps is fair enough,” Alex Lynch, Director of Aged and Community Care at Catholic Health Australia, told The Weekly SOURCE. “But the evidence from Australia’s own experience should give pause.”

Home care providers operate under mandatory registration requirements and are closely overseen by the Aged Care Quality and Safety Commission, with significant penalties for non-compliance.

“Layering a formal [price] cap over a system that is already this tightly regulated brings significant risks that outweigh the intended benefits.”

Lessons from the NDIS

The NDIS experience with hard price caps is “instructive”, said Alex.

Around 82% of NDIS providers operate at or near the caps, suggested caps have become a price signal, rather than keeping prices lower.

“Providers who had been charging less drifted upward. Those whose costs exceeded the cap because they were operating in remote areas or delivering complex care scaled back or left,” Alex said.

"The outcome was fewer providers where they were needed most and a price ceiling that became a price floor.

“Aged care does not have to repeat that experience, but hard caps will take us down that path.”

If caps are pitched above the market rate, they function as an invitation to charge more, Alex added.

“If caps are pitched below the real cost of delivering a service, providers stop delivering it.

“Consumers bear the consequences either way and that is especially true in regional towns, thin markets, and complex care situations.

“Not For Profit providers who focus their services on these areas cannot run at a loss indefinitely. When a funding model makes a service unviable in a disadvantaged community, that service eventually disappears.”

Better alternatives

“The Government’s aged care reforms are ambitious and have delivered real benefits,” said Alex.

“Australia now has its first rights-based aged care act and providers are being held to higher standards of clinical governance than ever before. The regulator has real teeth, and we strongly support the removal of co-contributions for showering, dressing and continence.

“It is counterintuitive to introduce further risks into the system.

“During this challenging transition period, genuine consumer protections – not premature caps – should be the focus,” he added.

He argued a better tool on My Aged Care that allows consumers to compare prices would be preferable to price caps and it would also be “perfectly reasonable” to require providers to justify pricing to the Department of Health, Disability and Ageing if concerns are raised.

“Where the Aged Care Quality and Safety Commission finds pricing has been excessive, it should have clear powers to compel repayment of consumer contributions,” he said.

Release more Support at Home packages

Alex recommends delaying prices caps until mid-2027 “at the earliest”, and only if evidence supports them.

Caps should be set based on how Support at Home operates, not projections made before the program existed, he said.

In the meantime, the Government should prioritise:

• releasing more Support at Home packages to reduce waiting times;
• discontinuing Interim packages at 60% of funding; and
• considering appropriate annual limits on Support at Home co-payments tailored to different consumer groups (eg. full pensioners, part pensioners and self-funded retirees).  

The Weekly SOURCE’s questions to the Department on price caps levels – critical information about what providers can charge – and if the implementation is on track to be rolled out on 1 July 2026 remain unanswered.