The fallout from The Australian’s story yesterday on the DP Jones aged care home in Murchison has been swift and sharp with the Opposition demanding Aged Care Minister Senator Richard Colbeck (pictured above with Prime Minister Scott Morrison left) explain why an “unprecedented” $520,000 in funding was provided for the 40-bed facility when aged care homes in Labor seats were allowed to shut their doors.
The paper reported today that Senator Colbeck wrote to Labor MP Emma McBride (pictured right inset) in November to tell her that the Government was “unable to intervene” in the closure of The Orchards Aged Care dementia unit and Henry Kendall Care centre in her NSW Central Coast electorate.
“The Australian government … is unable to intervene in the business operations of approved providers where they are acting within legislation,” he wrote to Ms McBride.
A separate letter from the Senator said decisions to close aged care homes were a “matter for the organisation’s management”, which was “responsible for ensuring the ongoing viability of the aged-care home”.
Viability “an issue for management”?
This is backed by evidence made by the Department of Health to the Senate Estimates Committee in October last year that the viability of a service is “an issue for management” – in a direct reference to the Murchison case (see our 25 October 2019, 182nd edition for the story).
But as covered in yesterday’s issue, the Government then spent $520,000 over the last four months to try to find a buyer for DP Jones following lobbying by its local National MP Damian Drum and the Deputy Prime Minister, Nationals leader Michael McCormack.
Senator Colbeck has told The Australian that Ms McBride did “not request support to keep the facilities open nor did providers seek to”.
“In both instances, the providers made independent business decisions to close. The department worked with the providers to support the relocation of affected residents from both aged care centres,” he said.
Health Minister Greg Hunt also told Ms McBride during Question Time he was unaware of the dates or details of her community’s request for assistance.
Government liable for $27 billion in RADs
The message is clear however: the Government will intervene in the case of aged care homes facing closure – albeit only if they are in its own electorates it would seem.
This puts them on the line for millions of dollars in ‘bailout’ money if the current financial losses in the sector result in more homes shutting their doors.
This could run into billions more.
One CEO reminded us in response to yesterday’s newsletter that the Government is also liable for the Refundable Accommodation Deposits (RADs) for homes that go under and will pay out around $4 million to DP Jones’ former residents.
“Extrapolate that $4 million over 52 homes!”, they said. “The government is sitting on a $30 billion liability to the sector if it has to repay RADs.”
Historically, the Government has paid out few refunds since the legislation on RADs was amended in 2014-15 with the rate of failures by approved providers dropping considerably – to just 0.0003% of providers in 2017-18.
But with $27.5 billion in RADs now held by the sector – and no new funding in sight – will the Government find its liability bill going up?
As our CEO pointed out: there is “no one coming to the rescue.”
