The Architecture of Care: Structuring Your NDIS & Aged Care Business for Protection, Profit & Purpose

Yesterday I had the privilege of speaking at the 2026 Melbourne National Care Leaders' Summit on Finance & Compliance in NDIS, SIL & Aged Care, held at the RACV Club on Bourke Street. It was a room full of dedicated care providers — people who spend every day keeping their clients and participants safe, supported, and empowered.

My session, "Understanding NDIS and Aged Care Effective Structure for Tax and Asset Protection Purposes," ran from 11:30am to midday. The 25-minute presentation covered three themes I believe every care provider should be thinking about right now: Protection, Profit, and Purpose.

A few attendees asked me afterwards to share the key points in writing so they could refer back to them — so I've put this article together. These are the same concepts I walked through on stage, expanded with a bit more detail for anyone who couldn't be there.

The 2026 Reality: Why Your Business Structure Matters Now

Running an NDIS or aged care business in 2026 is genuinely tough. Regulatory scrutiny continues to intensify. The NDIS Commission is watching closely — audits, reportable incidents, and registration conditions are becoming more frequent and more complex for all registered providers. Fair Work changes are squeezing margins, with wage increases and new employee entitlements compressing already tight budgets. And compliance pressure grows every year: reporting requirements, record-keeping obligations, and governance expectations continue to escalate for both NDIS and aged care operators.

You spend your days keeping your clients and participants safe. But the question I posed to the audience — and the one I want to pose to you now — is this: is your business safe?

Protection: The 'All Eggs in One Basket' Trap

Here's the single most common mistake I see when new clients walk through our door. They started small with one Pty Ltd company. As they grew, that single company ended up doing everything. It holds the NDIS registration, employs 100 staff, signs the leases, holds the cash, and maybe even owns the SIL properties.

This is a ticking time bomb.

If a serious incident happens — a massive workers' compensation claim, an unfair dismissal case, or a prolonged NDIS compliance freeze where your funding is suddenly stopped — that one company takes the entire hit. Everything is locked in the exact same room as your highest risk. Your operating cash, your properties, your vehicles — they are all exposed.

This is not a theoretical concern. It is happening to providers across Australia right now. One adverse legal or regulatory event can expose your entire accumulated wealth when everything sits in a single entity. If the business goes down, the assets go down with it. You do not want this.

The Solution: OpCo / AssetCo — Separating Risk from Reward

The golden rule of asset protection is simple: never own valuable assets in the same company that employs your staff.

Large organisations have always operated this way. Large care businesses separate risk-bearing operations from asset-holding entities. This approach is proven, legal, and prudent. It is time for care business owners to adopt the same mindset.

The firewall must be built before the fire starts — not after. If you restructure following a claim or incident, it is costly and often ineffective.

Here's the two-entity approach:

• The OpCo (Operating Company): This is the frontline. It holds your NDIS registration, employs the staff, and takes on all the daily operational risks. But — and this is the critical point — it owns almost nothing.
• The AssetCo (Asset Company): This is a completely separate legal entity. It holds your cash reserves, your real estate, and your vehicles. It does not employ anyone. It does not hold any registrations. It just holds assets.

How Does the OpCo Use the Assets If It Doesn't Own Them?

Simple: the AssetCo leases the properties and vehicles to the OpCo on formal, commercial terms. The OpCo pays rent to the AssetCo — just like it would pay rent to any third-party landlord.

Now, here's where the magic happens. If the OpCo gets sued, penalised, or goes into liquidation, the lawyers or creditors look at the OpCo's balance sheet and realise there is nothing to take. The OpCo doesn't own the house; it just rents it. Your real wealth is safely locked away in the AssetCo, completely out of reach from the OpCo's creditors.

You have built a legal firewall.

Profit: Why a Corporate Group Structure Beats the Old Trust Model

Now that your assets are protected, let's talk about how this group structure helps your business profit and tax position.

In the past, everyone loved using family trusts. But the game has changed. The recent Federal Budget has made it crystal clear that the government is cracking down hard on trust structures. From 1 July 2028, we're looking at a minimum 30% tax rate on trust income.

This makes old trust strategies clunky and expensive:

• If an individual beneficiary's marginal tax rate is over 30%, they will pay top-up tax on top of what the trustee has already paid.
• If their rate is below 30%, they receive a non-refundable credit for the tax paid by the trustee — meaning any excess credit is lost forever.
• If you have corporate beneficiaries (bucket companies), it gets even worse: they receive no credit for the tax paid by the trustee. The trustee pays 30%, then distributes the remaining profit to the bucket company, which then pays another 25-30% — effectively double taxation.

For care providers, a Corporate Group Structure — where a Holding Company sits at the top and owns both your OpCo and AssetCo — is much cleaner. It caps your tax rate at the small business rate of 25% (or 30% for larger groups), letting you retain more cash to grow the business without getting hit by top personal tax rates.

How the Inter-Company Dividend Flow Works

The real power of the Corporate Group Structure becomes visible when the OpCo makes a profit and you want to protect that cash by moving it up to the Holding Company. Here's the exact step-by-step scenario:

1. The OpCo makes a profit. Let's say the OpCo earns $100,000 in profit. It pays 25% tax to the ATO ($25,000). The OpCo now has $75,000 in cash sitting in its bank account.
2. Declaring the dividend. To protect that $75,000 from lawsuits, the OpCo declares a fully franked dividend and pays it up to the Holding Company.
3. The inter-company tax exemption. Because the Holding Company is an Australian company receiving a dividend from another Australian company, it gets to use the franking credits — the $25,000 tax already paid by the OpCo.

The result: The Holding Company declares the $100,000 as income, calculates the $25,000 tax, and applies the $25,000 franking credit. The net tax payable by the Holding Company is $0.

Tax Consolidation: One Return, Zero Admin Headaches

For larger care groups, there's an even cleaner option: tax consolidation.

Once the group structure is set up, the Holding Company can elect to form a Tax Consolidated Group with the OpCo and AssetCo. For tax purposes, the ATO treats all three companies as if they are a single entity.

This means:

• They only lodge one single tax return for the whole group — dramatically reducing compliance costs.
• All inter-company transactions — the OpCo paying rent to the AssetCo, the OpCo paying dividends to the Holding Company — are completely ignored by the ATO.

It wipes out the administrative headaches while keeping the legal asset protection firewalls fully intact. For care providers running multiple entities, this is a game-changer.

The Catch: Governance and the Division 7A Trap

A group structure is powerful — but it comes with governance responsibilities. You cannot simply treat your different company bank accounts like your own personal wallet.

Here's a real scenario: your OpCo makes a fantastic profit this year. You need to buy three new wheelchair-accessible vans, so you decide to put them in the AssetCo for protection. You log into internet banking and transfer $250,000 from the OpCo to the AssetCo.

If you do this without a proper written loan agreement, the ATO will hit you with a massive tax penalty known as Division 7A. You cannot just move money around because "you own both companies."

Division 7A treats certain payments, loans, and debt forgiveness from private companies to shareholders (or their associates) as unfranked dividends — taxed at your personal marginal rate of up to 47%. The rules require:

• A formal written loan agreement before the funds are transferred
• Commercial interest rates (the ATO publishes benchmark rates each year)
• Minimum annual repayments over a maximum 7-year term (or 25 years for secured loans)

The message is clear: the firewall doesn't just protect you from external threats — it must also be respected internally. Proper documentation is not optional; it's the price of protection.

Purpose: Long-Term Sustainability & Succession

Finally, your structure dictates your future. Long-term sustainability is about giving yourself options — whether you want to expand, bring in partners, or sell and retire. A clean setup makes your business far more valuable.

The OpCo/AssetCo model gives you three powerful flexibility advantages that a single-entity structure simply cannot match:

1. Expanding and Containing Risk

Let's say you dominate the SIL space, and now you want to move into Allied Health. Instead of dumping that new, untested service into your main company, your Holding Company sets up a brand new OpCo just for Allied Health.

If the new venture fails or faces a regulatory hurdle, you shut it down. It doesn't sink your profitable SIL business because the risks are quarantined in a separate entity. You expand with confidence, knowing one division's problem won't become the whole group's problem.

2. Rewarding Key Staff Without Giving Away the Farm

What if you have an amazing General Manager, and you want to give them 10% ownership of the business to stop them from leaving?

If you only have one company, giving them 10% means you are accidentally giving them 10% of your real estate too. That's not what you intended — you wanted to share operating profits, not hand over a slice of the SIL properties you spent decades building.

With the group model, you simply issue them 10% of the shares in the OpCo. They share in the operating profits and feel genuinely invested in the business's success. But you keep 100% of the hard assets in the AssetCo — still owned by you, entirely.

3. Selling and Retiring on Your Terms

Say you want to retire. A big national provider wants to buy your care business — but they don't want to buy your real estate.

Because everything is separated, you just sell them the OpCo for a clean multiple of profit. The transaction is straightforward, the valuation is clear, and there's no messy untangling of assets from operations.

You keep the AssetCo, and the new owners pay you rent for the next 10 years. You've just built your own passive retirement fund — the real estate keeps generating income long after you've stepped away from the day-to-day. That's the kind of exit most business owners dream about, and it's only possible with the right structure in place from the start.

Bringing It All Together

Running everything through one single structure just doesn't cut it anymore in 2026. Delivering great care takes compassion and skill — and protecting the business that delivers that care takes a bulletproof structure.

If you haven't looked closely at your company setup or how money moves between your accounts lately, now is the time. Talk to your accountant. Or talk to us — we specialise in helping NDIS and aged care providers build structures that protect, grow, and ultimately realise the full value of their life's work.

The best time to build your firewall was the day you started. The second best time is today.

Weiwei Fu is Principal at Elite Accounting Solutions, a CPA-registered accounting firm based in Mooroolbark, Victoria. The firm specialises in tax, business structuring, SMSF, and advisory services for NDIS and aged care providers across Melbourne and regional Victoria.