Support at Home: how the new rules change cash flow for home care providers

What changed for providers on 1 November 2025?

The changes that matter most for cash flow are these:

• Each client has a quarterly budget based on their classification, instead of a package amount accrued over the year.
• Ten per cent of each quarterly budget is set aside for care management. It does not roll over.
• Unspent service funds can roll over to the next quarter, up to the greater of $1,000 or 10% of the quarterly budget.
• Funds are held by Services Australia. Providers claim for services after they have been delivered and are paid against those claims.
• Clients pay contributions that depend on the type of service and their means, and providers collect those contributions.

The rollover cap matters for planning. Take a client with an $8,000 quarterly budget. Ten per cent is $800, so the cap is $1,000. If that client uses less than their budget, anything above $1,000 is gone at quarter end. For the provider, that is revenue that was planned and never earned.

Why does claiming in arrears create a cash gap?

Think about the order of events. Your support workers deliver services through the month. You pay them every fortnight. At some point after the month ends you lodge claims. Then Services Australia processes and pays them. Wages go out first and the money comes in weeks later.

None of this is unusual. NDIS providers have lived with it for years. But some home care providers came from a model where cash timing felt easier, and the change has caught a few off guard. A growing provider is hit hardest, because each new client adds wage costs today and revenue later.

How much working capital does a home care provider need?

Here is a simple model. Change the assumptions to match your own business.

• 150 clients with an average quarterly budget of $8,000 (assumption).
• 10% care management: $800 per client per quarter.
• Service funds: $7,200 per client per quarter.
• Clients use 85% of their service funds on average (assumption).
• Direct costs, mainly wages and travel, are 75% of service revenue (assumption).
• Claims are lodged monthly after month end and paid around two weeks later (assumption).

That $344,000 is cash you need in the bank, or in an overdraft, before you earn a dollar of profit. It doesn’t include care management revenue, which also comes in after the work. It also leaves out client contributions that are late or never paid, and any claims rejected and resubmitted.

What happens to cash when you grow?

Using the same assumptions, each extra client adds about $2,040 a month in service revenue ($7,200 × 85% ÷ 3) and about $1,530 a month in direct costs. With a 1.5-month gap, each new client ties up roughly $2,300 of extra working capital.

Take on 50 new clients in a quarter and you need about $115,000 more cash, even if every one of those clients is profitable. This is how good providers end up in trouble. The profit and loss looks fine and the bank account doesn’t.

How can providers ease the pressure?

1. Claim more often. If your systems allow it, lodging claims weekly or fortnightly rather than monthly can cut weeks off the gap.
2. Fix rejected claims fast. Track rejections and how long they take to fix. A claim stuck for a month doubles the wait on that money.
3. Collect contributions on a schedule. Direct debit, clear statements and early follow-up keep contributions from becoming bad debt.
4. Watch budget use. Clients well under budget may need a care plan review, and clients close to their limit need a conversation before services stop being funded.
5. Build a 13-week cash flow forecast. Update it weekly with actual wages and receipts so you see a squeeze coming a month or two ahead.
6. Arrange finance before you need it. A bank is far more helpful when you show up with a forecast than when you show up with a payroll due on Thursday.

What should boards be asking about Support at Home?

• How many weeks of wages do we hold in cash or available finance?
• What is our average time from service delivery to payment, and is it getting better or worse?
• What share of client budgets is unspent each quarter, and how much will be lost above the rollover cap?
• How much do clients owe us in contributions, and how old is it?
• What does the cash forecast look like if we grow by 20% this year?

If those questions are hard to answer today, that is normal for a first year under new rules. It is also fixable. Talk to us if you want help building the forecast and the reporting behind it.