Collapse of trusted care provider Annecto leaves $19M in debt and thousands in limbo

Australia’s aged care and disability care sectors are facing fresh uncertainty following the collapse of long-standing provider Annecto, which has entered voluntary administration with over $19 million in unpaid debts.

Annecto, which supported more than 4,400 clients and employed over 1,000 staff across Victoria, NSW, Queensland, and the ACT, ceased operations early July. Since then, the scale of its financial distress has come into clearer view — including over $11.4 million in unpaid employee entitlements.

The financial fallout

According to reporting by the Herald Sun, the breakdown of entitlements owed includes:

• $3.3M in annual leave
• $1.5M in long service leave
• $1.9M in payment in lieu of notice
• $4.3M in redundancy
  

Administrators McGrathNicol, appointed on 7 July, estimate unsecured creditors will receive little to no repayment if the company proceeds to liquidation. Employees may be eligible to claim some unpaid entitlements through the federal Fair Entitlements Guarantee (FEG), but superannuation is not covered under this scheme.

Employees are expected to recover between 21.4 to 54.9 cents on the dollar, depending on final asset realisations.

Impact on clients and communities

Annecto’s sudden shutdown has left thousands of clients — many of whom rely on regular aged care, disability, or veterans’ support — urgently needing to find new providers. As reported by ABC News (ABC, 8 July 2025), staff and clients across the country have been left in “transition limbo.”

The not-for-profit had been operating for over 70 years, and its closure has been described by sector leaders as a “wake-up call” for government, funders, and industry regulators.

In an editorial by Hello Leaders (Hello Leaders, 8 August 2025), concerns were raised about the lack of early warning systems, financial transparency, and client protection measures, particularly in an environment already strained by workforce shortages and funding uncertainty.

What went wrong?

Annecto’s downfall was attributed to:

• Poor financial oversight
• Declining operational cash flows
• Mounting deficits from its NDIS and aged care service arms
• Failure to meet new funding and regulatory compliance pressures
• Over-extension across states without adequate financial controls

The board voluntarily appointed administrators after determining it could no longer meet ongoing financial obligations, prompting an urgent search for solutions.

Sector and political reaction

Dr Anne Webster, Federal MP for Mallee, raised concerns over the regional implications of Annecto’s closure. In a statement, she called on the federal government to ensure that no vulnerable clients fall through the cracks during the transition.

Meanwhile, aged care unions and provider peak bodies are calling for reforms to provider solvency monitoring, greater worker protections, and a sector-specific early intervention scheme to prevent similar collapses in the future.

What happens next?

Administrators have recommended liquidation, with final decisions pending creditor review. The immediate priority is ensuring that clients are safely transferred to new providers and that employees receive what they are legally entitled to.

Government agencies are coordinating with alternate providers to manage the transition of care services, while legal proceedings and creditor communications continue.