Latest IHACPA Report Shows HELF Is Becoming a Financial Imperative

The latest IHACPA Residential Aged Care Pricing Advice 2026–27 Technical Specifications highlights a significant difference in the economics of everyday living services between providers with Additional Services Fees (ASF) or Extra Service Fees (ESF) revenue and those without.

Homes without Additional Services Fees or Extra Service Fees revenue are projected to lose $5.81 per occupied bed day (PBD) on everyday living services.

For a 100-place home operating at 95% occupancy, that represents approximately $201,500 per annum.

The everyday living funding gap

IHACPA forecasts the cost of providing everyday living services at $98.04 PBD over the next 12 months.

Across all homes, estimated everyday living revenue is $98.22 PBD, producing a small $0.18 PBD surplus. On the surface, therefore, the everyday living funding model appears essentially balanced. 

But there is an important issue hidden within the headline result. 

The sector-wide everyday living position only reaches approximately break-even only for homes charging ASF and ESF. 

For homes without Additional Services Fees or Extra Service Fees revenue, projected everyday living costs are $97.66 PBD, while revenue is $91.85 PBD.

The cost difference is small

There is another aspect of the IHACPA analysis that deserves attention.

In 2023–24, average everyday living costs were $82.96 PBD across all homes and $82.73 PBD for homes without Additional Services Fees or Extra Service Fees.

This suggests that additional services do not necessarily require a proportionate increase in operating expenditure. Some enhancements may have relatively low marginal costs, may make better use of existing staff and infrastructure, or may be delivered within expenditure that would otherwise already be incurred. 

The findings reinforce the importance of service design, rather than simply adding expensive new services. 

Providers should look closely at their existing everyday living operation and ask where additional resident value can be created at a sustainable marginal cost. 

A provider may already have kitchens, chefs, buses, laundry infrastructure, cafés, outdoor spaces and other resources. A well-designed HELF program can potentially use this existing capability to offer residents higher or additional choices without requiring an equivalent increase in the provider's fixed cost base. 

The commercial opportunity is to create additional resident value while generating margin that contributes to the sustainability of the home's everyday living operation.

The strategic question has changed

Historically, some providers regarded additional services as optional - a revenue opportunity that could be pursued or ignored without fundamentally changing the economics of the home. 

IHACPA's analysis challenges that assumption. 

Providers without ASF or ESF revenue are projected to have an everyday living deficit of $5.81 PBD, while the national result, which includes homes generating these additional resident-funded revenues, is approximately break-even. Yet the reported everyday living cost bases of the two cohorts are remarkably similar.

The opportunity is to identify services residents genuinely value, clearly distinguish them from standard entitlements, understand the marginal cost of delivery and price them appropriately. Done well, this can create additional resident value while generating a sustainable revenue stream for the provider.

For providers that previously generated ASF or ESF revenue, the priority is protecting and transitioning that revenue under HELF.

For providers that historically generated little or no ASF/ESF revenue, the IHACPA figures raise a different question:

If the underlying everyday living service is already costing almost the same to deliver, what is the cost of continuing without an additional resident-funded revenue stream?

Thinking about how to implement, transition to or optimise HELF in your organisation?

Pride Aged Living has supported providers across Australia to design, implement and improve HELF programs that enhance resident experience while supporting financial sustainability.

We're assisting providers to transition over 25,000 residents to HELF.

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