Resources to help aged care providers through the COVID-19 crisis

Meeting the challenges of the ‘black swan’ event in Australian aged care – with webinar: Redesigning your treasury function for future growth

In this article with accompanying webinar, Bentleys’ aged care specialist Heath Shonhan provides insights into how Australian aged care providers can redesign your treasury function for future growth.

 

Want a copy of the slides from this webinar? Click here

Tools aged care providers can use to help streamline staff and customer communications

In this webinar, Bentleys’ Hasi Samaratunga and hayylo Co-founder Greg Satur join forces to talk through tools and strategies you can use right now to quickly and effectively upscale your communications tools and strategies to keep your community and care recipients connected and informed at this crucial time.

 

$205 million for extra costs incurred from COVID-19 crisis

• One-off $900 payment per resident in metropolitan aged care facilities
• One-off $1350 payment per resident in regional aged care facilities
• Funds focused on helping providers manage costs incurred from the pandemic, including daily staff and visitor screening measures at facilities and added expenditure on PPE, which has become increasingly expensive with high demand

New payment expected to be paid by early June through Services Australia.

$444.6 million to strengthen the industry, with specific mechanisms to reinforce the aged care workforce

• $234.9 million for a COVID-19 ‘retention bonus’ to ensure the continuity of the workforce for aged care workers in both residential and home care
  • This will mean a payment of up to $800 after tax per quarter – paid for two quarters – for direct care workers
  • Two payments of up to $600 after tax per quarter – for two quarters – for those who provide care in the home
  • Payments will be delivered to providers to pay their workers and part-time workers will be paid a pro-rata rate
• $78.3 million in additional funding for residential care to support continuity of workforce supply
• $26.9 million for a temporary 30 per cent increase to the Residential and Home Care Viability Supplements and the Homeless Supplement. This includes equivalent viability funding increases for National Aboriginal and Torres Strait Islander Flexible Aged Care Program providers, Multi-Purpose Services and homeless providers
• $92.2 million in additional support to home care providers and organisations which deliver the Commonwealth Home Support Programme, operating services including meals on wheels. This will include services for people in self-isolation such as shopping and meal delivery
• $12.3 million to support the My Aged Care service to meet the surge in aged care specific COVID-19 enquiries, allowing for additional staff to minimise call wait times

$101.2 million with a focus on:

• Upskilling aged care workers in coronavirus infection control
• Boosting staff numbers, support and training for residential care homes where an urgent health response is required
• A telehealth consultation service provided by doctors, both GPs and specialists, for anyone over the age of 70
• Specialist onsite pathology services ensuring residents don’t have to leave facilities and to quickly respond to potential cases; and
• Additional funds allowing the Aged Care Quality and Safety Commission to work with providers on improving infection control

On a general business level, other Government support measures are also in place – some of which may apply to aged care providers.

View the updates to Government support for Australian businesses here.

 

• $52.9M grant funding available. A facility may claim a base amount of $20,000 per facility, plus $2,000 per operational place.
• Available for any eligible expenditure from the Trigger Date (first in-facility test for COVID-19 – earliest Feb 2020), and the End Date (no infected or isolated residents, clients or staff – latest May 2021).
• Award of grant agreements is paid as a single amount on the success of your application (up to 4 weeks from submission date).

YOU CAN APPLY FOR THIS FUNDING ON THE GRANTS.GOV.AU WEBSITE HERE

 

There is $48.7million in funding aimed at providing financial assistance to residential aged care providers who are experiencing financial difficulty and have limited access to funding support. The grant has specified that it will prioritise rural and remote providers and those impacted significantly by the bushfires earlier this year.

Funded activities are those which:

• improve your business, for example to restructure business operations and upgrade financial management and IT systems
• transition your business to a new provider
• close down your business in a safe and orderly manner and transition residents to other facilities (where there’s no other option)

Providers can access (generally) up to $7,500 per operational bed (or double that in the case of a sale), and there is no requirement for matched funding.

The Fund assesses applications on receipt, so we recommend applying as soon as possible.

MORE INFORMATION ABOUT THE BUSINESS IMPROVEMENT FUND CAN BE FOUND ON THE DEPT OF HEALTH WEBSITE HERE

YOU CAN APPLY FOR THIS FUNDING ON THE GRANTS.GOV.AU WEBSITE HERE. APPLICATIONS CLOSE 30 April 2021.

ACCESS MORE INFORMATION ABOUT HOW WE CAN HELP YOU TO APPLY FOR THE BUSINESS IMPROVEMENT FUND HERE

 

However, COVID-19 has created a new layer of risks – such as the potential of staff and health professionals being quarantined or unavailable due to school closures or other events.

This Rapid Response Checklist is a clear and comprehensive guide that will help you to review, update and activate your business continuity plan where required.

ACCESS THE RAPID RESPONSE CHECKLIST HERE

Further reading:  Are you prepared for the COVID-19 business impact?

 

 

This will help you make critical decisions around scenario planning – particularly around revenue, costs and working capital.

How to approach using your COVID-19 Financial Model:

• Key variables (e.g. occupancy, revenue levels (e.g. ACFI, extra services/additional services), staffing, RAD levels) should be tested under various scenarios. What is the impact on operating and financing cashflows with a 10, 20 or 50% change?
• Ensure key outputs from your business continuity plans are reflected in your forecasts.
• Outputs of scenario testing should be used to assess the risks and develop action plans.
• Stakeholders should be engaged and notified of assessed vulnerabilities.
• Targets and KPIs are revised at this time, based on the outcomes of forecasts.

ACCESS MORE INFORMATION ABOUT ROLLING QUARTERLY FORECASTS HERE

 

These risks include:

• outflows of refundable accommodation deposits (e.g. RADs, Bonds) in the event of resident mortality; coupled with
• restrictions on admission of new residents. (The NSW Department of Health has already recommended restricting the admission of new residents to protect both existing and incoming residents. This restriction could mean admitting residents to one wing only, or closing the facility to new residents entirely.)

This may leave providers exposed to risks around prudential requirements and occupancy vulnerabilities.

Potential mitigants for liquidity risks:

• Discuss the set up/extending of lines of credit, unsecured loans or bank overdraft facilities with your financier for prudential requirements or working capital relief.
• Consider the relief options offered by financial institutions (e.g. loan repayment deferrals for up to 6 months, interest rate reductions for small businesses).
• Actively monitor/nurture your waiting list in light of COVID-19 impacts.
• Develop new forms of communication and scheduling using technology.
• Review and cease any non-essential spending. Review formal approval processes for spend over a certain threshold (e.g. $500).
• Contact suppliers to discuss extended payment terms.
• Investigate other cash flow opportunities from the Government’s stimulus measures discussed above and the Department of Health Business Improvement Fund.

While rolling quarterly forecasts will allow you to understand and scenario test COVID-19 impacts, it may be critical to also maintain weekly cashflow forecasts to more closely monitor risks to liquidity over a 12 week period.

If the risk of trading insolvent is a key concern, be comforted that Legislation has been relaxed so Directors will not be personally liable for insolvent trading where debts are incurred in the ordinary course of business. We will continue to update this page as more information comes to hand.