Aged Care price hikes undermine faith in system

Price spikes are prompting a wave of distress calls from older people and their families, with the Older Persons Advocacy Network (OPAN) reporting a 96% jump in complaints since the new Aged Care Act commenced.

Under the reforms, older people contribute more toward their services, with providers free to set their own prices, however reforms have also resulted in an increase in the hourly rate for care and support services.

This, it is claimed, has led some to cut back on the services they receive.

Much of the hourly rate price hike can be blamed on the introduction of a 10% cap on care-management fees.

This cap was introduced by the Federal Government to improve transparency and reduce excessive backoffice charges. However, it has largely backfired because providers have simply shifted this into the hourly rate for aged care services to remain viable.

Does this mean that the price hike claims are a storm in a teacup or are rising fees the canary in the coalmine for a looming disaster – one that must be averted?

What are older Australians now being charged?

There are claims the hourly rate for everyday aged care services have increased dramatically.

It has been reported (by a private company involved in matching clients with providers) that in some instances, consumers are being charged upwards of $180 an hour for a shower, $290 an hour for gardening, $170 an hour for cleaning and $320 an hour for a registered nurse.

But these claims of excessive price gouging, raise bigger questions.

What is the true cost of providing care in Australia and are providers (and the rules that govern providers) operating in a way that maximises efficiency and productivity in what is a highly labour-intensive sector (latest data show that 58.8% of provider income was spent on wages).

The simple answer is that we have no idea. But we should.

Yes, there is quarterly data on provider finances but it’s tricky to interpret.

For example, on average providers had income of $89.82 per person per day and operating expenses of $83.01, meaning a net margin of $6.81 per person per day (in the first quarter of 2025-26). However, only 75% of providers were profitable.

While the proportion of profitable providers has risen, the degree of profits has fallen, down 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 data is readily accessible here but it’s unlikely that average punters will be interested in trawling through it.

What we need, instead, are ways to translate data like this into something simple and meaningful for older people (something NSA is looking to do).