Aged care providers carrying estimated half a billion dollars in debt

Struggling aged care homes are being pushed further into debt as they await the payment of an estimated half a billion dollars in grants promised by the federal government to cover the extra costs of containing COVID-19 outbreaks.

One large provider, Calvary Health Care, runs 62 residential aged care homes around the country and has submitted claims for about $55 million in COVID-19 grants but has only been paid $5 million.

The sector’s peak body, the Aged and Community Care Providers Association, said the delays had created a “perfect storm” for care homes already running at a loss.

“We do still have providers who are waiting, in some cases on many millions of dollars,” chief executive Tom Symondson said.

“We shouldn’t be a sector that if we are owed money from a COVID grants program, we are pushed to the wall.”

Catholic Health Australia, which represents about 15 per cent of the nation’s aged care market, said the delays could lead to more care homes having to close.

“They’ve spent the money, the money has gone out the door and they are carrying these huge debts at a time when more than half of aged care providers are running at a loss,” director of aged care Jason Kara said.

“Aged care providers cannot continue to be left out of pocket.”

He says some of the outstanding claims relate to outbreaks as far back as 2021 but have been bogged down by bureaucracy and quibbling over small details.

“Claims worth hundreds of thousands of dollars are held up for months by the government agency querying a $100 COVID test expenditure,” Mr Kara said.

Outstanding COVID grants

• Calvary Health Care, a large national provider, has submitted about $55m worth of COVID-19 grant claims, with only $5m paid out
• Southern Cross Care (SA, NT & VIC) has claimed just over $6m, with only $230,000 paid out
• Southern Cross Care (NSW & ACT) has claimed $6m, with $2.2m outstanding
• Southern Cross Care (Western Australia) has claimed $3.946m, with zero paid out
• Southern Cross Care (Tasmania) has claimed $1.23m, with zero paid out
• MercyCare in Western Australia has submitted $1.55m in claims, with only $55,000 paid out
• Southern Cross Care (Queensland) has had all 2021/22 claims paid but has $600,000 outstanding from 2022/23.

The grants were announced at the height of the pandemic and allowed aged care providers to claim back all additional costs incurred during a COVID outbreak.

The total amount of grant money available was increased from $100 million to just over a billion dollars in the November budget.

A total of 11,383 applications for grants have been received.

Of those, 5365 have been finalised, with more than $432 million paid out.

Another 6018 claims are still outstanding, totalling an estimated half a billion dollars.

A spokesperson for federal aged care minister Anika Wells said the government could not put a figure on the total amount of outstanding claims.

Figures provided in March, following questions from the federal Opposition, show that claims of $570 million were still to be finalised.

The government said that all applications were subject to a “rigorous assessment” and that extra staff were being put on to speed up the processing of claims.

Providers known to be in “significant financial distress” were being given priority, the spokesperson said.

Mr Symondson said while some of those would have been paid out, an estimated half a billion dollars’ worth of claims were still to be settled.

“The government has to do its due diligence to make sure people are not claiming for things they shouldn’t, but ultimately that money should still be flowing much faster,” he said.

‘Difficult for us to go without’ 

Ashfield Baptist Homes, which runs a residential aged care facility in Sydney, has dealt with three COVID-19 outbreaks so far this year.

“Last financial year we spent about $400,000 just on COVID outbreaks,” chief executive Leigh Kildey said.

“Our estimation is that this financial year, it will be at least that amount.”

For the first time in its 92-year history, the care home expects to end the year in the red.

“Two years of lack of grant payment and continuing effects of COVID in the industry is seeing us post a loss for the very first time,” Ms Kildey said.

Up until a few days ago, it was owed almost a million dollars in outstanding COVID-19 grants.

One claim for $528,613 relating to an outbreak in November 2021 was settled last week after Ms Kildey wrote a letter to Prime Minister Anthony Albanese.

“That was from two financial years ago and operationally half a million dollars was very difficult for us to go without,” she said.

Another $434,624 in claims are still to be settled.

She said the delays had taken a heavy toll on smaller operators.

“There have been numbers of instances, Wesley Mission being one, [of facilities] closing the doors and saying we are not going to participate in the residential aged care space anymore.”

The latest figures show that 54 per cent of care homes are operating at a loss.

Running costs have increased significantly due to reforms introduced following last year’s Royal Commission into Aged Care.

A 15 per cent pay rise for the lowest-paid workers came into effect this month along with a requirement that every aged care facility must have a registered nurse on duty around the clock.

“We have seen our staffing costs go up, inflation is sky high, costs are going up far faster than the abilities of governments to afford to pay for those services,” Mr Symondson said.

Seventy-six residential aged care homes have closed their doors in the past two years.

“I don’t want to see any facility close,” Mr Symondson said.

“My hope is that these grant payments will start to flow more quickly.”

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