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By Laura Haylen
Catholic Health Australia Director of Aged Care Policy
In February, the Aged Care Quality and Safety Commission released its draft new Financial and Prudential Standards (the Standards) for consultation.
Amongst changes, the draft standards impose minimum liquidity requirements on aged care providers. This includes holding a minimum liquidity amount equal to 35 per cent of the provider’s cash expenses for the previous quarter and 10 per cent of the deposited amount balances held by the provider at the end of the previous quarter.
CHA and its members are very concerned about the substantial overreach proposed through these draft Standards that would have a significant detrimental effect on the investability of the aged care sector, particularly residential aged care, as well as unintended consequences for retirement villages and other care sectors. The transition timeframe is also far too short and would be very hard for many providers’ boards to comply with.
CHA is engaged in ongoing dialogue with the Government and the Commission on the standards. We have had several productive meetings with the Commission to discuss CHA’s submission and key concerns.
In discussions we have raised CHA member concerns about the scope and scale of proposed liquidity requirements on the aged care sector. Amongst other priorities, we’re asking the Commission and Government to:
- Allow providers to identify and report on their own minimum liquidity amounts OR reduce the agreed percentage to between 5 to 10 per cent of RAD balances
- Exclude non-residential aged care business units from the calculation
- Ensure liquidity is broadly defined to include all relevant assets of a provider
- Delay implementation for 12 months to support sector adoption.
We are committed to ensuring the new standards achieve the intent of the Royal Commission’s recommendations and will work collaboratively with Government and the Commission to get this right.
CHA’s submission on the new Standards is available here.
Laura Haylen is Director of Aged Care Policy at Catholic Health Australia
Laura Haylen
Laura brings nearly a decade of aged care, social and health policy experience to the position of Director Aged Care Policy, including roles at Commonwealth and State level.
