Many providers are sounding the alarm that the Support at Home program, which officially launched on 1 November 2025, is pushing them toward financial collapse.
Industry bodies and economic advisors have highlighted several “red flags” making the sector’s viability precarious:
1. The “Management Fee” Squeeze
- Previous Model: Under the old Home Care Packages (HCP), providers often charged up to 30% in management and administration fees.
- New Reality: Support at Home has capped care management at 10% of a participant’s budget. This dramatic drop in revenue has forced some providers to try to recoup losses through controversial “kickbacks” from equipment suppliers.
- Australian Government Department of Health, Disability and Ageing
2. The 60% Funding Gap
- Advocates have warned that many new Support at Home packages are initially being allocated at only 60% of their intended funding.
- Despite this reduced funding, providers are still legally required to meet 100% of the quality and safety standards, creating a massive gap between their resources and their responsibilities.
- hellocare.com.au
3. Looming Price Caps
- While providers can currently set their own prices to cover rising labour costs, the government will introduce mandatory price caps on 1 July 2026.
- Economic analysts like StewartBrown have noted that many operators need to increase their service margins to roughly 33% (up from 13%) just to stay “investible” and survive under the new regime.
- Australian Government Department of Health, Disability and Ageing
4. Operational Overload
- Providers have slammed the new system as “broken,” specifically citing the “impossible” administrative burden of creating hundreds of thousands of new service agreements in just a few months.
- Smaller and rural providers are considered at the highest risk, with some calling the recent reform requirements the “straw that breaks the camel’s back”.