Govt’s aged care data confirms StewartBrown viability warning

The Department of Health, Disability and Ageing’s latest Quarterly Financial Snapshot (QFS) shows residential aged care earnings firmed in Q1 2025-26, though expenses rose ahead of financial penalties for failing to meet mandatory care minute targets.

Some 82% of aged care operators recorded positive earnings before interest, tax, depreciation and amortistion (EBITDA) in the quarter, up from 76% a year earlier.

The residential aged care sector’s EBITDA rose 12% to $679.8 million, from $607 million in Q1 2024-25.

EBITDA per resident per day (prpd) increased 10% to $37.75 prpd, up from $34.40 prpd in Q1 2024-25.

The average EBITDA margin was virtually steady, decreasing by 0.1 percentage points to 8.1%.

There was a disproportionate increase in operating expenses for for profit residential aged care providers compared to Not For Profit operators during the quarter. The trend may indicate that For Profit providers are increasing direct care staff time ahead of funding changes that will “link care funding to the delivery of care minutes” starting in Q2 2025-26, the 38-page QFS noted.

The QFS result aligns with StewartBrown Q1 2024-25 report, which showed residential aged care providers achieved an operating deficit of $7.14 prpd, an improvement on the $8.45 prpd deficit recorded in Q1 2024-25. However, StewartBrown notes the result was a deterioration on the $3.08 prpd deficit recorded for the 2024-25 financial year.

Elsewhere in the QFS, the average occupancy rate in Q1 2025-26 was 90.9%, up 1.9 percentage points from Q1 2024-25.

And sector consolidation continued, with 34 operators exiting via ownership transfers and nine new entrants during the period.

You can read the report in full here.