The Government seems remarkably confident that it knows what it is doing in aged care. That confidence is not widely shared amongst providers and increasingly with the Australian public.
Canberra appears to have only been listening to a small group of policy insiders who believe providers can simply become more efficient. It has taken the measure of the sector once, using anecdotes, old data and early modelling, then cut the real value of care twice in the last eight months.
The first cut arrived when Support at Home began in November. The second begins in July, dressed up as a 2.6% funding increase.
The maths is simple: care costs are rising faster than the funding available to buy it. The outcomes are more complex: older people receive less care, families and unpaid carers carry more of the load and providers move closer to the edge.
How an increase became a cut
When Support at Home began, the Government removed Package Management as a separate fee and Care Management was reduced to a pooled 10% allocation. The work supporting older people at home did not change. Providers still need rostering, claims processing, payroll, technology, quality systems, compliance and governance. And let's not ignore the cost of fuel and travel that has materially increased over the last six months.
The Government directed providers to recover those costs through service prices. Its own guidance says prices can include labour, Package Management, administration, travel, subcontracting and a reasonable margin. Higher hourly prices were not an accident, they were built into the program.
StewartBrown found the median prices of five common services increased by an average of 39% between June 2025 and February 2026. Personal care moved from $80 to $112 an hour. Its market scan found no obvious evidence that providers were systematically pricing too high. Instead, providers were generally setting prices responsibly to remain viable.
Package funding did not rise by anything close to 39%. That was the first real cut.
Now minimum award wages are increasing by 4.75%, while Support at Home funding will rise by around 2.6%. The difference is in the maths and the outcomes.
The gouging story does not survive the data
Recent media reports have headlined that providers are price gouging, charging way too much for their services. It does not seem an accident that this price gouging narrative enables the Government to escape responsibility for price rises of its own design. It removed separate fees, told providers to include those costs in service prices and then allowed higher prices to be presented as evidence of provider greed.
The data contradicts the gouging narrative. StewartBrown’s December survey, covering 86,324 packages, found the overall provider margin had fallen to 1.7%. In the December quarter, which included two months of Support at Home, EBITDA was only $632 per participant per year. StewartBrown said the major trends were all negative, including service volumes, margins and the adequacy of prices.
The Government’s own reporting had already shown the pressure building. In the final quarter before Support at Home, home care expenses grew by 10.6%, faster than revenue at 9.8%, while labour costs rose by 9.3%.
If you struggle with accounting lingo, the plain English version is this: if this is gouging, providers are doing a remarkably bad job of it.
This is not a sector with endless room to absorb another redesign and another wage increase. Providers cannot roster their way out of every wage increase, automate their way out of care complexity or keep reducing margins without eventually reducing services.
Measure the real cost of care
The recent Invox Support at Home Pricing and Finances Essential Briefing was clear in its messages. Providers need to understand the real cost of each service, build budgets and prices together, manage utilisation and rostering, invoice accurately and hold enough cash to absorb shocks. Every price must be reasonable, documented and explainable.
But operational discipline cannot repair a package that is losing purchasing power by design.
The Government must publish the full calculation behind the 2.6% increase and explain how it reflects a 4.75% award movement. It must correct the public story about why prices increased, review package values against the actual cost of delivering care and urgently revisit the top classification.
Most importantly, it needs to listen beyond the same small policy circle. Listen to providers of different sizes, rural services, workers, participants and families living with the consequences.
Measure once, cut twice is terrible advice for a chippie. It is shameful when the thing being cut is the care that keeps an older person at home.