Skip links

Aged care provider funding & bond liquidity line

Dear Ministers,

Aged care provider funding

I note the recent announcement of further aged care funding assistance which is predominantly directed towards a bonus for aged care workers. This is a commendable idea. However it does not go to address the viability of aged care providers, 56% of which prior to Corona Virus were operating at a loss.

I have previously outlined the significant additional costs aged care providers are incurring on behalf of the government as a result of maintain hygiene and isolation protect aged care residents. These are costs which cannot be recovered from our residents. The government has a moral obligation to properly compensate providers for these additional costs. Furthermore, a mass aged care system failure is imminent if additional funding to cover operating costs is not forthcoming. In my assessment, the additional funds required for providers would be 10%, bringing average ACFI claiming to $198/day.

Accommodation bond liquidity line

Every aged care provider must maintain liquidity in line with the Liquidity Standard. However, a mass mortality event in any facility would exhaust the liquidity reserves (either by way of cash of bank line). I recommend that the Government establish a bond liquidity service for all providers who are impacted by a COVID-19 mass mortality, which is not in the course of ordinary business, so that an insolvency event does not occur.

Russell D. Egan