Home care providers’ operating results have almost halved over the past four years, dropping from $5.67 per client per day in March 2021 to $3.13 in March 2025, according to StewartBrown’s March quarter 2024-25 Aged Care Financial Performance Survey.
Results also declined year-on-year, down from $3.41 per client per day in March 2024, as margins continued to erode. The average profit margin for the March 2025 quarter fell to 3.8%, compared to 4.5% a year earlier.
Government education required on necessary price hikes
The report highlights a major challenge ahead for providers: the upcoming 10% cap on care management fees and the removal of package management fees under Support at Home, set to commence from 1 November 2025.
In the March quarter, care management revenue as a proportion of total revenue was 18.6%. Nearly all – 92% – of Home Care Packages and programs in the March quarter survey had care management revenue of more than 10% of total available funding. Package management revenue as a proportion of total revenue was 13.2%.
When the 10% care management cap is introduced, StewartBrown estimates home care providers will lose $5.91 pcpd in care management revenue ($15.49 pcpd will decline to $9.58 pcpd). In addition, the removal of package management fees will mean providers will need to factor $10.93 pcd into prices.
"The increased pricing for each home care service that will be required is driven by the new funding model, and not through providers merely seeking to increase their operating margins. This is an important narrative," the report states.
"The direct margin on service delivery (both internal and sub-contracted) will need to increase to 32.1% from the current 11.9% to simply maintain the present operating surplus (3.8% on revenue)."
Staff hours have declined significantly in the last decade
Notably, average total staff hours declined to 5.37 hours per client per week, a slight improvement on the 5.13 hours recorded for the December 2024 quarter.
"It is significantly below the average 9 hours per client per week provided prior to the implementation of the Consumer Directed Care model in July 2015," the report states.
Unspent funds also reached a record $4.3 billion.
The survey captured results for 79,446 Home Care Packages.
Read the report in full here.
