Is aged care losing money? The sector’s two scorecards disagree, and both are right

Scorecard one: the survey that says distress

StewartBrown’s Aged Care Financial Performance Survey (December 2025 edition, published April 2026) covers 1,200 homes and 100,648 beds, which the firm describes as 46 per cent of the sector. Its headline measure is the operating result: revenue less operating expenses, before one-off and non-operating items. On that measure the half-year to December 2025 was the sector’s worst since 2022:

• The average home lost $9.80 per bed per day (a year earlier it made a $1.56 surplus). Per bed, per year, that is a $3,391 deficit.
• 61 per cent of homes ran at an operating loss, up from 48 per cent a year earlier; 35 per cent ran at a cash (EBITDA) loss, up from 25 per cent.
• The average provider’s operating result was a $1.04 million deficit, against a $49,000 surplus the year before.
• Staff costs reached 72.53 per cent of operating revenue (from 70.35 per cent), which the report attributes to the Fair Work Commission’s aged care wage decisions.

The driver is specific. Direct care revenue (chiefly AN-ACC subsidy) rose 7.82 per cent year on year, but direct care labour costs rose 13.68 per cent, so the direct care margin collapsed from $19.08 to $6.15 per bed day over the year, and to $1.57 in the December quarter alone. Homes are delivering more care minutes (221.68 per resident per day, up from 212.08) with better-paid staff, and the October 2025 AN-ACC price rise of 4.68 per cent did not keep pace. StewartBrown’s benchmark for a sector that can reinvest is operating EBITDA of $20,000 to $22,000 per bed per year; the survey average is $4,582.

Scorecard two: the census that says improvement

The Government’s Quarterly Financial Snapshot (Q1 2025-26, released February 2026) is built from the Quarterly Financial Report every approved provider must lodge, so it is closer to a census than a survey. Its headline measure is net profit before tax. For July to September 2025 it reports:

• Residential sector NPBT of $240.7 million, a margin of 2.9 per cent, up from 2.4 per cent a year earlier.
• 64.5 per cent of providers profitable on NPBT, up 1.5 percentage points, and those providers serve 67.4 per cent of residents. Four in five providers reported positive EBITDA.
• Sector EBITDA of $679.8 million, up 12.0 per cent in dollars, though the margin slipped 0.1 points to 8.1 per cent because revenue grew faster still.
• Care minutes above target sector-wide: 220.66 delivered against 215.85 targeted, with 60.0 per cent of homes meeting both their care-minutes targets, up 5.8 points on the prior quarter.
• Home care was stronger again: 75.0 per cent of providers profitable, margins steady at around 7 per cent.

Read alone, that is a sector where funding rose faster than costs (revenue up 11.7 per cent per resident day, expenses up 11.1 per cent), occupancy climbed to 90.9 per cent, and profitability edged up. The same government data series that the distressed survey cohort sits inside is, in aggregate, improving.

Why both are true

Three differences do almost all the work, and none of them is a trick:

• Different populations. StewartBrown is a voluntary benchmarking sample, 1,200 homes whose operators choose to be measured; the QFR captures the whole regulated population, including the government and not-for-profit tail. Neither is “wrong”, but they are different rooms of homes.
• Different windows. StewartBrown’s half-year runs to 31 December 2025, so it includes the October 2025 nurse wage tranche and the first two months of the new Aged Care Act; the Government’s quarter ends 30 September 2025, before both. StewartBrown’s own quarterly split shows the December quarter was markedly worse than September, so the windows genuinely diverge.
• Different definitions of profit. StewartBrown headlines the strict operating result; the snapshot headlines NPBT, which nets in non-operating and non-recurrent items such as fair value gains and one-off grants. The distance between the two is not small: on StewartBrown’s own numbers, the average provider had a $1.04 million operating deficit and a $0.63 million NPBT surplus in the same half-year. A provider can be unprofitable at the bedside and profitable on the bottom line at the same time, and in the December half the average surveyed provider was exactly that.

Our honest read, built on the figures above: the operating measure is the better early-warning gauge of whether daily care pays for itself, and it is deteriorating; the NPBT census is the better gauge of whether providers are keeping the lights on, and it says most are. Both things are happening. What would settle the divergence is the Government’s Q2 2025-26 snapshot, which will cover the same October-December window as StewartBrown’s bad quarter; we will report it when it lands.

The pressure on the funding side of this ledger has its own story: the AN-ACC price that sets most residential revenue expires on 30 September and its replacement has not been published, while the final aged care nurses pay rise lands on 1 August.

Primary sources

1. StewartBrown, Aged Care Financial Performance Survey Sector Report, December 2025 (report PDF).
2. Quarterly Financial Snapshot of the aged care sector, Q1 2025-26 (July to September 2025), Department of Health, Disability and Ageing, released 17 February 2026.
3. IHACPA, Residential Aged Care Pricing Advice 2025-26, for the AN-ACC price of $295.64 per NWAU from 1 October 2025.
4. Productivity Commission, Report on Government Services 2026, Part F section 14, for sector expenditure context ($39.8 billion in 2024-25).
5. Department of Health, Disability and Ageing, Better and fairer wages for aged care workers, for the wage tranche dates driving the cost side.

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