
Home care providers are not receiving an adequate return on investment to provide essential services to older Australians living independently, according to analysis from StewartBrown.
Crunching data from 75,783 home-care packages, the Aged Care Financial Performance Survey – which provides an overview of the financial performance of the aged care sector for the 12 months ended 30 June 2022 – recorded a surplus for providers of $3.98 per client a day, compared to $6.05 the previous year.
“Home care financial performance has stagnated over the last four financial years,” say the report’s authors. “This is not an adequate return based on the investment required and
business risk to provide these essential services to the elderly in a domestic home
setting.”
Home care also faces “significant operating issues” with workforce shortages “the most crucial concern”. This – coupled with a “complicated regulatory environment” – has seen the home care sector’s financial performance decline.

Responding to StewartBrown’s findings on ABC radio Tuesday, Minister for Health and Aged Care Mark Butler said: “The headline conclusions from this report are no surprise to a party that’s been saying this for two or three years: that the aged care sector was pushed into crisis by the former government.”
However, Mr Butler added that – while StewartBrown’s reports were a “really important part of the jigsaw puzzle” when it came to scrutinising the financial performance of Australia’s aged care sector – “listeners would expect me to make an independent assessment of this rather than just rely upon a report commissioned on behalf of aged care providers.”
Other findings in the report include:
- revenue was $68.39 per client per day – a decrease of 4.3 per cent from FY21 ($72.08)
- care management revenue as a proportion of total revenue was 18.7 per cent
- package management revenue as a proportion of total revenue was 10.7 per cent
- revenue utilisation decreased by 2.3 per cent to 85 per cent of funding received for FY22 (FY21 87.3 per cent)
- direct service costs decreased by $1.06 to be 58.6 per cent of total revenue (FY21 58.4 per cent)
- operating results have declined from $6.05 per client per day for FY21 to $3.98 for FY22.
As for the decrease in the actual amount charged for providing home care services, this may be as a result of competition and consumer choice, say the authors. “However, it is more likely a reflection of concerns by providers in lifting their pricing, as due to staffing
constraints which has restricted the range of service delivery.”
Workforce challenges
The authors of the 26-page report cite staffing as the “biggest challenge” facing the industry with considerable shortages being felt in all regions of Australia. “The ability to attract and retain staff has reached a critical stage,” say the authors.
Pointing to the recent Fair Work Commission wage increase of 5.2 per cent and the current work value case before the FWC, the authors say: “Whether these increases are sufficient on their own to attract additional staff is questionable, and other incentives and benefits may be required.”
Emergency funding could bridge gaps
A major issue for the sector, say the report’s authors, is that while major reforms are waiting to be implemented there will be a “lag period of some years” before financial performance improves. “This is where the pressure point is likely to occur, and short-term remedial assistance may be required.”
To avoid reduced care delivery – especially in regional locations – the report’s authors recommend an emergency funding package to “ensure current viability” and to bridge the gap between now and when the impacts of the reforms kick in.
While the new federal government “has been very active” in considering and implementing reform of the aged care sector, the authors say, “a lack of a consistent strategy and agreement from all sector stakeholders has inhibited some of the significant reform that is required.”
The industry as a whole, conclude the authors, “needs to embrace reform and provide solutions and not just focus on funding issues.”
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This report made no mention of the RC recommendations that all aspects of the funding and expenditure of operators be subject to intense supervision and reporting as the RC found so many incidents of operators not using the funds for care but for profits. The RC reported on most of the issues raised in this report and made detailed recommendations on how to fix them . All we need is a government nthat is prepared to allocate the resources to give the aged a reasonable chance of care with dignity and compassion