Data shows that aged care providers are charging as much as 40% more for services like cleaning, gardening, personal care, and nursing. Is there a way to resolve this issue?
The rise in prices is triggering a wave of distress calls from older adults and their families, with the Older Persons Advocacy Network (OPAN) reporting a 96% increase in complaints since the new Aged Care Act took effect.
As part of the reforms, older adults are expected to contribute more towards their services, with providers having the freedom to set their own prices. However, these reforms have also led to an increase in the hourly rates for care and support services.
It is asserted that this has caused some individuals to cut back on the services they receive.
A large part of the increase in hourly rates can be blamed on the introduction of a 10% cap on care-management fees.
This cap was implemented by the Federal Government to improve transparency and reduce excessive administrative costs. However, it has largely backfired, as providers have simply shifted this cost into the hourly rates for aged care services to maintain their operations.
Does this mean that the claims of price hikes are merely a minor issue, or do the rising fees serve as a warning sign of an impending crisis that must be addressed?
What are the charges currently being levied on older Australians?
There are assertions that the hourly rates for typical aged care services have risen sharply.
A private organization that facilitates connections between clients and providers has reported that, in certain situations, consumers are being charged more than $180 per hour for a shower, $290 per hour for gardening, $170 per hour for cleaning, and $320 per hour for a registered nurse.
Nevertheless, these claims of significant price gouging raise broader concerns.
What is the actual cost of care provision in Australia, and are the providers (and the regulations that govern them) functioning in a way that maximizes efficiency and productivity in this labor-intensive field (recent data indicates that 58.8% of provider income is allocated to wages)?
The straightforward answer is that we are uncertain. However, we ought to be informed.
Indeed, there is quarterly data on provider finances, but it can be difficult to interpret.
For instance, on average, providers had an income of $89.82 per person per day and operating expenses of $83.01, leading to a net margin of $6.81 per person per day (in the first quarter of 2025-26). However, only 75% of providers reported profitability.
While the proportion of profitable providers has increased, the level of profits has decreased, falling from a median Net Profit Before Tax margin of 8.8% in the first quarter of 2023-24 to 6.7% in the first quarter of 2025-26.
This information is readily available here, but it is unlikely that the average individual will be motivated to explore it.
What we need instead are methods to convert such data into something simple and meaningful for older individuals (which is a goal that NSA is pursuing).
Older Australians are reducing services due to financial constraints
Older individuals and their families have lodged numerous complaints with OPAN.
The most frequently reported issues include:
- Sudden increases in fees
- Extended waiting periods for assessments
- Assessment decisions based on algorithms that do not accurately reflect individuals’ actual needs
- Challenges in locating a provider even after receiving approval
- Residential aged care charging for services that were previously included.
If the rising fees are accurate, they risk compelling older Australians to diminish or forgo essential support – placing them at greater risk.
OPAN reports that many older individuals feel worse off under the new Act – contrary to the promises made by the reforms.
Transparency and efficiency must be prioritized
National Seniors Australia (NSA) has consistently maintained that aged care pricing should be transparent. Why? Because you have indicated that this is crucial!
In a period when providers are imposing higher rates, Australians deserve assurance that:
- Fees correspond to actual workforce and service delivery expenses
- Providers are functioning efficiently
- Funds are allocated to care rather than administrative excess or profit enhancement.
Currently, older individuals cannot see beyond the pricing facade – which is unacceptable.
If providers are unable to prove true efficiency and financial transparency, the government must intervene.
Price caps are forthcoming
Effective from 1 July 2026, the Australian Government will implement mandated price caps for all services under the new Support at Home program to guarantee fair pricing, preventing providers from charging above these thresholds.
However, price caps alone may not suffice. If they are set excessively high, some providers will merely charge the maximum, retaining any profit.
Should we also consider capping provider profits to ensure that older Australians are not left to bear unlimited fee increases for essential care?
Aged care is a vital service and should be accessible, accountable, and equitable. It necessitates robust safeguards, not a system that burdens older individuals with an ever-increasing financial obligation.