The profits of aged care homes surged 40 per cent in the past year as operators cut hours of nursing care while claiming higher payments from the federal government for servicing more of the most frail patients.

The earnings boom in the sector comes after the government introduced widespread reforms of aged care in 2014, including deregulating fees and lifting restrictions on the accommodation bond that nursing homes can levy on residents.

NSW's population is undergoing a huge demographic shift. Credit:Virginia Star

It also coincides with a spike in false claims by aged care home providers for government subsidies, which rise based on the level of need of the patient.

According to the latest annual survey of aged care homes by Bentleys Chartered Accountants, the average profit before interest and tax increasing from $4497 per resident per annum in 2014 to $6278 in 2015.