LASA wants major Government action on aged care, forecast losses for 65% aged care operators

Media Release: 18 March 2021

LASA is calling for major Government moves on residential and home care, with predictions up to 65 per cent of age care homes will record operating losses in the next financial year, putting quality care for older Australians at greater risk.

The latest independent StewartBrown report says 58 per cent of homes surveyed were operating at a loss in the first six months of this financial year, with an average operating deficit of almost $2,750 per bed per annum.

“We appeal to the Government and the Parliament to provide older people with quality care, choice, and respect,” LASA CEO Sean Rooney said.

“With a significant surge in operating losses forecast for residential care, we need urgent action on the Royal Commission recommendations.

“The final report said collective decisions of successive governments had cut more than $9.8 billion from the budget for aged care in 2018–19, prompting lengthy waiting lists for home care and serious stress and deficiencies in residential care.

“Constantly, we hear from our members that financial subsidies for residential aged care are not keeping pace with the real costs of caring. LASA members and their staff battle every day to provide top-quality care with limited resources.”

The Aged Care Funding Instrument (ACFI) has increased by 10 per cent over four years but direct care costs have increased by 22 per cent.

Despite these financial stresses, the StewartBrown report said total direct care staff hours per resident per day had increased over the past six months, with a cumulative increase of 12 per cent since December 2016.

“There are many of our members who have worked hard to raise standards and we are working with them to continue to improve the standard of care provided for older Australians,” Mr Rooney said.

“We implore the Government to lead fundamental change in our aged care system. Funding is a key part of this reform so we are looking forward to the full Government response in the May federal budget.

“It is critical that additional funding will increase the numbers of nursing and care staff, have them better paid and trained and lead to better outcomes for residents.”

On the home care front, the report says average revenue per client per day has decreased by 1.1 per cent, with results predicted to further decline in the next six months of this financial year.

“The December report says overall unspent funds for Home Care Packages were likely to be greater that $1.4 billion,” Mr Rooney said.

“We support the Government’s move to pay in arrears but we hope the unspent funds will be used to reduce the home care queue, as recommended by the Royal Commission final report.”

Mr Rooney said, given the level of aged care funding required, Australia needs to consider what is likely to be a mix of contributions between Government funding and consumer finance.

This could include a levy, personal contributions, support for home equity release and payment through superannuation products such as annuities and longevity insurance.

“Fixing aged care is above politics and this is the only way we will improve aged care,” Mr Rooney said.

“Australia spends 1.2 per cent of GDP on aged care, as opposed to comparable countries who spend 2.5 per cent.

“If major changes are not made in the next few months, we will see losses increase and this will impact on aged care service delivery.”

The latest StewartBrown report is available here.


  1. The residential sector has to seriously consider deliberate and targeted non compliance of reporting etc.
    Associations have played footsie with the government to the detriment of its members and their clients. There is no reason to believe that the man that oversaw the financial demise of the sector as treasurer will now as Prime Minister be any more forthcoming than previous.
    Clearly the planned tax cuts need to be delayed and funds utilised for the safety of the sector. Residential care providers and superannuation investors that have lost millions should be forming a class action to recover the years of losses deliberately enacted by the government that has done so much damage.


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