The average time an older Australian spends on a Home Care Package has plunged 33% to 2.4 years in FY25 from 3.6 years in FY24, according to StewartBrown’s FY25 Aged Care Financial Performance Survey.
There is a question mark over whether the decline may reflect the slow release of Packages – HCP consumers grew 7.2% in the year to June 2025 versus projected demand growth of 13.5%.
Against that backdrop, providers will need to lift prices significantly under Support at Home to retain today’s slim margins.
Sector earnings improved in FY25: EBITDA per HCP client rose to $1,620 (up 36% from $1,213), the average operating result increased to $3.77 per client per day (from $2.76), and the profit margin edged up to 4.4% (from 3.5%), supported by an 8.2% lift in revenue to $84.89 pcpd (from $78.44 pcpd) and stronger revenue utilisation at 88.2% (86.3% in FY24).
Support at Home to erode margins
However, those gains are at risk under the new pricing arrangements. With a 10% cap on care management, providers will lose an estimated $6.23 pcd in care management revenue (from $15.85 pcd to $9.62 pcd).
The removal of the package management fee means providers must recover a further $11.18 pcd through service prices. Based on StewartBrown’s modelling, the direct margin on services must rise to 32.5% (from 12.2%) simply to maintain the current 4.4% operating surplus.
Unspent funds hit $4.3B
Total internal staff hours nudged higher to 5.35 hours per client per week (5.22 in FY24), but this remains well below the average nine hours pcpw delivered before Consumer Directed Care began in February 2017 – reflecting increased use of third-party delivery.
Unspent funds continue to climb: the average now $15,171 per client (from $14,517), taking the Government-held total to $4.3 billion. Consumer contributions remain modest at around 2.5% of total Home Care funding.
The FY25 survey covers 82,158 Home Care Packages, up from 71,003 last year.
For our analysis of StewartBrown's residential aged care results click here. You can read the StewartBrown report in full here.