Australia’s home care sector experienced a decline in profitability in 2021-22, the first in half a decade, the Financial Report on the Australian Aged Care Sector 2021-22 reveals.
The home care sector, which received 17.8% of Government aged care funding in 2021-22, generated a profit of $2.78 per care recipient per day in 2021-22, down from a profit of $4.29 in 2020-21 – the first decrease in profitability in five years.
Expenses declined, but revenue declined further over the period.
In total, home care providers generated $197 million in profit, down from $248 million in 2020-21.
UNSPENT FUNDS
The introduction of Improved Payment Arrangements (IPA) may also have eroded profitability, according to the 148-page Report.
Unspent funds sat at $2.3 billion, despite the introduction of the IPA from 1 September 2021, which means unspent funds no longer accrue, but are either spent by the consumer or returned to the Government.
HOURS OF CARE DOWN
Providers spent almost 44% of income on direct care, down from 49% in 2020-21.
The SOURCE: Australia’s aged care strategy is based on growth in home care services. Home care providers need to make a return on investment in order to be financially viable and continue to offer services.
