Profits up for residential care sector
Net profit before tax for the residential care sector has more than doubled in Q3 2024-25 compared to the previous year and puts seven in 10 residential providers in the black.
The Department of Health, Disability and Ageing has released the Quarterly Financial Snapshot for the Aged Care Sector report for the third quarter of the 2024-25 financial year.
According to the report, the financial performance of the sector is strengthening. For Q3 2024-25 just over 70 per cent of residential aged care providers reported a positive net profit before tax position for that financial year to date. The sector reported a NPBT of more than $1 billion for the quarter, up 132.6 per cent on the previous 12 months.
NPBT for not-for-profit and for-profit providers was up $10.79 per resident per day for residential aged care providers year to date compared to Q3 2023-24, and up $1.76 for home care providers. NPBT is now $19.29 and $7.60 per resident/client per day respectively.
Earnings before interest, taxes, depreciation, and amortisation was also up for both residential care and home care. EBITDA for residential care providers rose by $1.71 and now sits at $44.79 while home care providers saw a $1.81 rise, with their EBITDA now sitting at $8.00.
The percentage of profitable residential providers YTD – in relation to NPBT – rose from 64.9 per cent in March 2024 to 70.2 per cent. However, for-profit providers are more likely to be making a profit (83.2 per cent) than their not-for-profit counterparts (62.7 per cent). Profitable providers serviced 75.3 per cent of residential care recipients, the department noted.
Residential care providers with a positive EBITDA YTD also increased. Compared to Q3 2023-24 there has been a 3.5 percentage point increase, with 83.7 per cent of providers having a positive EBITDA YTD. Again, for-profit providers are more likely to have a positive EBITDA (91.2 per cent) than not-for-profit providers (70.4 per cent).
There was also an increase in expenses, up 5.3 per cent to $21.6 per resident per day, which the department said was driven by higher labour costs – specifically an increase in wage costs and employee benefits.
The average occupancy rate for residential care also increased and now sits at 90.2 per cent, up 2.5 percentage points.
At 30 March 2025, there were 720 residential aged care providers. Compared to 12 months prior, there were eight new providers and 29 had exited.
Home care NPBT up 38 per cent
While the percentage of profitable home care providers YTD is higher than the residential care sector, with 74.7 per cent of home care providers profitable, it is 5.3 percentage points down on Q3 2023-24. Similarly, for-profit home care providers are more likely to be in the black (80.8 per cent) than not-for-profit providers (70.1 per cent).
The total NPBT for the home care sector was $558.1 million – $153.8 million more than Q3 2023-24 – signifying a 38 per cent increase.
The department attributes the increase in revenue to the 5.3 per cent increase in claim days and an increase in Home Care Package utilisation from 83.4 per cent in Q3 2023-24 to 85.5 per cent in Q3 2024-25. This was in turn driven by an increase in labour costs from an associated increase in labour hours.
In relation to EBITDA YTD results, the home care sector saw a decrease of 5.8 percentage points in profitable providers to 76.1 per cent, including 81.4 per cent of for-profit providers and 72 per cent of not-for-profit providers with a positive EBITDA.
At 30 March 2025, there were 917 home care providers. There were 52 new providers over the previous 12 months and 32 providers had exited.
The Q3 snapshot reflects the impact of several reforms and initiatives, including:
- an additional $3.8 billion from 1 January to fund the Fair Work Commission’s Stage 3 increase to award wages and an additional $2.6 billion from 1 March for the award wage increase for enrolled and registered nurses working in aged care
- consecutive increases in the AN-ACC price, which rose from $253.82 to $280.01 from 1 October 2024 and to $282.44 from 1 March 2025
- an increase to the hotelling supplement, which rose from $11.24 to $12.55 from 20 September 2024, to $13.46 from 20 March 2025 and to $15.60 from 1 July 2025
- a 2.8 per cent increase to the 24/7 registered nurse supplement from 1 March 2025
- an increase to the mandatory care minutes to an average of 215 minutes per resident per day from 1 October, including 44 minutes of RN care
- an increase to the maximum room price a provider can charge without Independent Health and Aged Care Pricing Authority approval, up from $550,000 to $750,000 from 1 January 2025 with annual indexing on 1 July
- increase of the Home Care Package subsidy by 0.93 per cent on 1 January and 0.10 per cent on 1 March – to support providers to meet the FWC’s Stage 3 wage increases
- an additional 7,615 HCPs released from 1 December 2024 to 30 June 2025.
Read the full report here.
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