The Government’s 37-page Quarterly Financial Snapshot for December 2024 shows improved profitability in residential aged care – but warns future gains could be short-lived as providers face tighter compliance with care minute targets.
EBITDA rose $3.44 per resident per day (prpd) to $45.77 prpd in the six months to December 2024, but margins fell 1.5 percentage points to 8.3%. While revenue jumped 8.4%, driven by a $0.7 billion boost in AN-ACC funding and a $1.75 prpd rise in the hoteling supplement, expenses – particularly labour – rose 5.6%.
The report raises concerns about providers using care funding to cover losses in accommodation and hoteling. Just 37% of services are meeting both total and RN care minute targets – and only 33% in metro areas (MMM1).
“To improve profitability while ensuring care funding is spent on care delivery, provider accommodation and hoteling results must improve,” the report states.
From the December 2025 quarter, operators in MM1 regions must meet care minute targets to receive full funding – a change likely to drive up labour costs.
Key stats:
- Care funding: up 10.4% to $302.81 per resident per day
- Occupancy: rose 2.1 points to 89.7%
- Agency staff: down to 7.9% of care labour costs (from 10%)
- Bed licences: $60 million still to be amortised in FY25
Industry concern remains.
StewartBrown’s Q2 2024 report echoed profitability gains but warned margins will narrow.
“The margins are higher than they ever were under ACFI. But they will start to contract,” said Senior Partner Grant Corderoy told The Weekly SOURCE at the time.
“That is why we need to see progress on key Taskforce recommendations such as reviewing the methodology for the Maximum Permitted Interest Rate (MPIR) and reviewing the Accommodation Supplement as a priority. Otherwise, we will see a return to the ‘bad old days’ of widespread financial losses,” he said.
You can download the full report here.
