New figures from the Aged Care Financing Authority (ACFA) show “serious decline” in financial performance for the sector

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ACFA’s seventh Report on the Funding and Financing of the Aged Care Industry (2017-2018) released on Friday shows that expenses of residential care providers increased by 5.3 per cent while their income increased by only 1.7 per cent. For home care, expenses per consumer increased by 7 per cent while income decreased by around 1 per cent

Average earnings before interest, tax, depreciation and amortisation (EBITDA) per resident fell by 24 per cent, and 44 per cent of residential care providers reported a loss. Similarly, earnings per home care consumer fell 60 per cent.

General Manager of Policy & Advocacy at peak body Leading Aged Services Australia (LASA), Tim Hicks, says feedback from LASA’s consultations suggests that there appears to be a growing number of smaller providers, particularly in regional and remote areas, facing significant financial stress and seeking to leave the industry.

“A notable development in 2017-18 is the ongoing decline in the number of residential care providers reporting that they planned to rebuild or upgrade their facilities,” he said. “Many providers have curtailed or delayed investment plans because of policy and regulatory uncertainty.”

  “Despite the pressure they are under, residential care providers continue to increase the number of hours of care per resident, but this cannot continue, and some providers have already been forced to cut back on staffing.”