80% of home care services are non-clinical – but Support at Home will see Government cash re-directed towards nursing care and allied health. Are your services and workforce ready for this seismic shift?

The new Support at Home Program is transforming the home care model from a system of social support to a medicalised model – a move that will require a radical change in service and workforce strategy for operators.

Currently, home care providers have three main sources of revenue:

• Services (direct or brokered) – on average 69% of total revenue according to aged care accountants StewartBrown;
• Care management – on average 18.6% of total revenue; and
• Package management fees – on average 12.4% of total revenue.

Package Management will be gone. Care Management will be capped at 10%.

Operators will need to increase their service margins to compensate – from 69% to 88.4% just to maintain the current 3.5% average margin for home care, says StewartBrown – see the table below.

This is just to keep operating – not enough to achieve a return that is ‘investible’.

Where can operators find the cash?

Under Support at Home, the Government will only fully fund clinical care.

Part pensioners and self-funded retirees seeking ‘Independence’ (showering, dressing, mobility support etc) and Everyday living’ (cleaning, gardening, shopping etc) services will be required to contribute to their cost of services – see the table below.

While the Government has deferred the introduction of the yet-to-be-announced price caps for home care until 1 July 2026, the expectation is that providers will need to increase their prices to maintain their margins under this new funding model.

There is also growing concern that consumers will choose to spend their budgets on clinical care – leading to a decline in the lower-level services such as domestic assistance and gardening that typically make up a large proportion of operators’ services.

Take this example: if a care recipient must pay more for their cleaner under their Package, they may choose to hire a cleaner for a lower price outside of their funding.

In short, operators must decide where they want to play – are you prepared to deliver the higher-level care services, or will you focus on the traditional lower-level services?

Clinical care delivery requires volume

Historically, clinical care has not been a significant part of the service offered by most home care providers – nursing services have made up around 15% of services utilised under the Commonwealth Home Support Programme (CHSP).

Nurses are often utilised as case managers or simply support.

Under the new system and the Strengthened Aged Care Quality Standards, there is a much greater focus on clinical care – but given the grandfathering arrangements for existing home care clients, it may take time for the demand for clinical care services to increase.

“If you don’t have the volume of clinical care very quickly, it will be a prohibitive service to have and providers will be forced to say, ‘we can’t continue offering this’,” Lorraine Poulos, the Managing Director of specialist home care consultancy Lorraine Poulos and Associates, told SATURDAY.

Lorraine is advising her clients to review the makeup of their workforce now and look at restructuring to adapt to the new model.

How are home care providers preparing for these changes?

Australia’s fourth largest home care provider Dovida Australia, formerly Home Instead Australia, is already looking to invest in their workforce including upskilling its care coordinators ahead of Support at Home.

But the organisation brokers its nursing out to other operators – and new CEO Geoff Hogg (pictured top) doesn’t see the provider bringing the service back in-house from 1 July.

“There are some very specialist skills that are required in some of those functions. We are going through a review, but there are some services we would always say would be outsourced,” he told SATURDAY.

Instead, Dovida is looking at how it could diversify its existing services under Support at Home.

“We’re certainly looking at any gaps against the new Program,” said its National Client Experience Manager, Amy Devlin.

“So, for example, we already provide a good model for palliative care. So having that separate end-of life pathway, we’re exploring how we can meet the client’s needs under Support at Home, and the Standards.”

Is the future of clinical care in the home a partnership approach then?

With 13,000 clients and 4,500 staff, Dovida has the advantage of scale to pursue its strategy.

For most of the sector, a new status quo appears set to emerge.

If success at the clinical end depends on ‘volume’, more home care providers that specialise in nursing are likely to emerge.

For operators focusing primarily on lower-level services like domestic assistance, partnering with another provider that is a clinical care specialist could be the solution to ensuring clients have access to the full range of services.

Home care operators such as Silverchain, Australian Unity and Amplar Health – which specialise in nursing and allied health services – will be well-positioned to capitalise on demand.

While larger home care providers will be able to invest in their clinical teams, smaller operators may need to outsource their clinical support and governance.

Lorraine and her team are already supporting several smaller providers that have small clinical care teams with their decision-making and oversight.

The lesson?

Before investing in restructuring your workforce, providers should analyse their volume of services and determine the impact of price increases on demand and the current budgets of your customers.

Lorraine advises providers to undertake a time and motion study to understand where their case managers are spending their time.

It is worth running a range of scenarios from the best case to the worst case – you don’t want to make staff redundant only to see an increased demand for services.

The other issue to consider is that external assessors will also be determining a care recipient’s clinical needs under Support at Home, not the provider – so this may further impact on the demand for high-level services.

The positive news is that there are more Home Care Packages on the horizon – the Government has pledged 83,000 Home Care Packages in 2025-26 and another 24,000 in 2026-27 – so for operators that can push through the reforms, there are significant opportunities for growth.

“Their transition might be painful, but if operators have agile systems and cash reserves, they can afford to ride through this, and the demand will be there in the long term,” concluded Lorraine.