For the past 15 years, Kevin and Sue Dawson have called a neat little cottage home. Nestled next to the Loddon River, just west of Maldon in central Victoria, the idyllic township of Baringhup is where they have settled and where they are determined to stay. The senior citizens’ ability to maintain their lifestyle is largely thanks to the federal government’s Home Care Package program. The couple uses aged-care funding for mobility aids and other support. Without it, Mr. Dawson said, “we’d probably be in a situation where we’d have to go into aged care or maybe hospital.”
A month ago, the federal government’s Aged Care Act came into effect to help older Australians remain at home for longer. The changes, including a massive lift in government funding, are designed to improve the scheme’s efficiency and sustainability as Australia’s population ages. But they have not been universally welcomed, with many recipients, including the Dawsons, complaining of higher costs and increased contributions.
Despite their reservations and higher contributions, the Dawsons, especially Ms. Dawson, are happy with what the scheme provides. However, a conflict is brewing between the organizations that manage client funds — the providers — and the firms that provide the services — the suppliers — particularly those that specialize in wheelchairs and home modifications.
Providers Pressured to Provide Kickbacks
The new Support at Home program, which on November 1 replaced Home Care Packages, reduces management fees providers can charge users. But suppliers say providers are trying to recoup lost fees by other means. Industry body Assistive Technology Suppliers Australia reports some home care providers are trying to strongarm suppliers into “pay for service” arrangements.
Serena Ovens, the chief executive officer of the lobby group, stated,
“My industry — the suppliers, the manufacturers and distributors of assistive technology — are being pressed by a number of service providers — people that hold the individual’s funds — to provide kickbacks, incentives and commissions.”
Those who refuse can find themselves blacklisted or no longer included on an “exclusive list.”
“If they choose not to offer a commission or an incentive to the service provider, they may not be [asked] to provide the equipment,” she said.
More Government Cash but Tighter Fees
The sudden grab for cash from Home Care Package providers coincides with a dramatic drop in revenue. As part of the aged-care overhaul, providers have had fee commissions slashed. Previously, they were taking up to 30 percent of a recipient’s funds; now they can charge a maximum of 10 percent, and some are trying to recoup those funds the best way they can.
The ABC has obtained emails with direct requests for rebates and payments, which suppliers have argued eat into already slim profit margins. One email states:
“To help recover package management losses, I propose we offer a flat fee structure,”
another email reads.
Home Care Funding Balloons Nearly 30% in a Year
Home care is big business. KPMG compiles an annual report into the sector, and co-author Lauren Ffrost has tracked the massive lift in government spending. Between the 2023 and 2024 financial years, government funding for home care packages increased 29.2 percent.
“Government expenditure over the last few years has certainly increased, particularly into the support-at-home market, where we’re seeing about $8.8 billion or so,” Ms. Ffrost said. A staggering number of organizations and firms manage that money for elderly Australians. According to Ms. Ffrost, 855 home care providers now handle clients’ cash, a slight decrease on the previous year, with further rationalization likely.
She said the biggest 25 providers — a mix of not-for-profit groups, corporate outfits, and government entities — soaked up almost half the government expenditure and were getting bigger. “We’re seeing larger providers growing,” she said. “We’re also seeing the market grow naturally, just through the level of investment into the sector.”
Practice Outlawed in Other Programs
Signs of stress are appearing among home package providers. In recent weeks, two have gone to the wall, one with thousands of employees and operations across four states. Melbourne-based Annecto, a charity with 4,400 clients, many in rural areas, collapsed in July with debts of almost $20 million, while a Sydney-based charity failed a fortnight ago.
Equipment suppliers have been caught in the collapses and are likely to find themselves out of pocket, another reason many are loath to hook up with individual home package providers on exclusive arrangements. Most would prefer to continue dealing with individual clients.
Ms. Ovens said providers pursuing kickbacks undermined a fundamental principle of the new legislation — the individual’s right to choose. And she said backhand deals were explicitly banned from other government-run programs. “The NDIS states that you cannot offer commissions, kickbacks. They’re also concerned about conflicts of interest,” she said. “It’s really important that if someone has an arrangement with another provider, that that conflict of interest is declared up-front to the individual and they can then decide.”
The ABC’s questions to the major service providers went unanswered, while the federal government noted the concerns but made no response. As the aged care sector continues to evolve, the tension between providers and suppliers underscores the complexities of balancing financial sustainability with the ethical delivery of essential services.
