Financial and prudential standards consultation summary published
A consultation summary report on the draft financial and prudential standards has been published by the Aged Care Quality and Safety Commission (ACQSC) — these standards will apply to aged care providers from 1 November, under the new Aged Care Act.
A key reform under the Australian Government’s commitment to improving the safety, quality and resilience of the aged care sector — as recommended by the Royal Commission into Aged Care Quality and Safety — the new financial and prudential standards will bolster the accountability, long-term sustainability and transparency of aged care providers across Australia, Aged Care Quality and Safety Commissioner Liz Hefren-Webb said.
“The new financial and prudential standards will ensure that aged care providers are not only meeting their obligations to deliver high-quality care but are also financially viable and effectively managing the funds entrusted to them,” Hefren-Webb said.
On the importance of the reforms, Gary Rake, Deputy Commissioner Regulatory Operations, said they mark a significant shift in regulatory oversight to better protect residents and ensure providers are equipped to deliver sustainable care and services into the future.
Feedback received throughout the public consultation process was considered by ACQSC in progressing drafting of the new standards, with ensuring clarity of the new requirements in the standards, minimum liquidity amounts and phasing of implementation being focus areas.
“These new standards provide a clear and consistent framework for financial stewardship in the aged care sector,” Rake said. “They will help ensure that providers are managing resources responsibly, while giving older people and their families greater confidence in the services they rely on.”
Minimum liquidity calculation
After consultation, ACQSC adjusted the minimum liquidity calculation — reducing the requirement for refundable retirement deposits from 10% to 2%. A commitment was also made to clarify how providers can use alternate methods to demonstrate they are meeting the objectives of the Liquidity Standard. ACQSC said it calculated that 84% of providers already hold liquid assets exceeding the minimum amount that would be required by the new Liquidity Standard.
| Component of the Minimum Liquidity amount calculation | Original Standard (for consultation) | Revised Standard (post-consultation) |
|---|---|---|
| Percentage of the previous quarter’s cash expenses | 35% | 35% |
| Percentage of retirement refundable deposit liabilities | 10% | 10% |
| Percentage of retirement refundable deposit liabilities | 10% | 2% |
The consultation summary report is available here, via the ACQSC website.
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