Residential aged care providers have seen improved operating results, but continued losses in everyday living and accommodation are eroding the sector's viability, according to the latest UTS Ageing Research Collaborative (UARC).
UARC's 134-page Aged Care Sector Mid-Year Report 2024-25 states that in the six months to 31 December 2024, nearly half of all homes (48%) operated at a loss, an improvement from the 64% operating at a loss for the same period the previous year.
The operating result for the period was a minimal surplus of $0.10 per resident per day. The slim margin is likely to be eroded as providers move towards higher compliance with mandatory care minute targets.
The report also notes the dataset used, from StewartBrown financial surveys, only includes mature homes and could be weaker if all homes were included in the data.
There also remains the "persistent structural imbalance" in the residential aged care business model, where surpluses generated from Government-funded direct care are used to cross-subsidise losses from everyday living and accommodation services, according to the report.
On average, operators recorded a surplus of $19.38 per resident per day for direct care, but losses of $8.33 for everyday living and $10.94 for accommodation.
"Improvements in the financial results for everyday living and accommodation are essential if the sector is to become viable in the future," the report states.
The StewartBrown data used for the analysis captured 43.6% of the 2,617 aged care homes in Australia.
Read the report in full here.
