There is a question a provider CFO must be honest about, even when it sits awkwardly against the balance sheet. Is it in our financial interest for an older person to stay in their own home rather than move into one of our residential places?
For a purely commercial operator, the honest answer is uncomfortable. Residential beds carry revenue. Empty rooms do not. On that logic, a person who ages safely at home for another three years is three years of deferred occupancy. But I sit in the finance seat of a not-for-profit aged care organisation, and that framing gets the mission and, in the long run, the economics both wrong. Between 78 and 81 per cent of older Australians say they want to stay in their own home. Our job is not to talk them out of it, so our buildings stay full. It is to make staying possible for as long as it is safe, and to be there properly when it is not.
That reframing has real consequences for how a mission-led provider allocates capital. Home modification and ageing-in-place renovation sit right at the centre of it.
Looking at the two models from inside a provider’s accounts, the contrast is sharp. Residential care is capital heavy and labour heavy. It carries buildings funded through refundable accommodation deposits, a care minutes mandate now at 215 minutes per resident per day including registered nurse time, and a wage base set by the industrial Awards that keeps climbing. Nationally, a residential place costs the system in the order of 66,000 dollars a year. In-home support, on the AHURI numbers, costs closer to 15,500 dollars.
That gap is not an argument for doing residential care cheaply. It is an argument for taking the home seriously as care infrastructure. Most of what tips a person out of independent living is not a diagnosis. It is an event, usually a fall. Around 80 per cent of an older person’s daily activity happens inside the home, and the share needing help with everyday tasks climbs from about 5 per cent in the mid-fifties to 47 per cent past 85. The bathroom, the entry and the hallway are where the transition to residential care is set in motion.
So, a well-scoped renovation is not a soft benefit sitting outside the care model. It is one of the cheapest interventions we can point a family towards, and it defers a far more expensive one.
The reform agenda has now made this a strategic question, not a philosophical one. Support at Home replaced Home Care Packages from 1 November 2025 and brought in a dedicated Assistive Technology and Home Modifications scheme. For the first time, equipment and modifications draw on their own funded stream. Home care is no longer the poor cousin of residential funding. It is a defined, funded part of the continuum a provider is expected to deliver.
That should reshape how a board thinks about where capital goes. The instinct in aged care has always been to invest in bricks, because bricks are what we could see, fund through RADs and put on the balance sheet. Support at Home asks us to build capability that does not sit in a building at all. The ability to assess a client’s home, scope the right modification, work through the AT-HM tiers and manage the co-contribution where funding stops short is now core provider infrastructure. It just does not look like it on a fixed asset register.
The AT-HM scheme runs three tiers. Up to 500 dollars for simple items, up to 2,000 dollars for equipment that needs professional advice, and up to 15,000 dollars for complex modifications requiring a clinical assessment and prescription. For home modifications, that top figure is a lifetime limit.
That ceiling is where reality bites, and where a good provider earns its trust. It has been estimated that only about 2 per cent of people who need major modifications proceed, because of cost.
For a mission-led organisation, that 2 per cent is not someone else’s problem. It is the gap between what the scheme funds and what the person needs to stay safe. Our value is not in lodging the form. It is in helping a family sequence the work, use the funded tiers well, be honest about the shortfall, and find a way through it. Providers who build that capability will hold their clients longer and serve them better. Those who treat modification as paperwork will lose both the trust and, eventually, the client to a hospital admission.
This is the part a CFO should say plainly to a board. In our sector, the mission case and the financial case for ageing in place do not conflict. They converge. Supporting a person to stay home longer is the better human outcome and the lower-cost pathway. The only reason it looks like a threat to a provider is if we define ourselves by the number of beds we fill rather than the number of people we keep safe and independent.
Under the Aged Care Act 2024, the governance duties on approved providers have been strengthened, and rightly so. Stewardship now means more than occupancy and compliance. It means allocating our capital, our people, and our attention across the whole continuum, including the parts that keep people out of our residential care for longer. For a not-for-profit, that is not a strategic compromise. It is the mission expressed as a budget.
The building is not the mission. It never was. The person still living in their own home, safely, because we helped them modify it in time, is the clearest measure of whether we are doing our job. If we do that job well, we will need fewer beds than we thought. From this chair, that is exactly the outcome we should be planning and funding for.
