Retirement Living Council (RLC) Executive Director Daniel Gannon and his operator members have successfully convinced in a meeting today with representatives of the Aged Care Quality and Safety Commission (ACQSC) that it should rework its Financial and Prudential Standards guidance for providers.
The deadline has been extended seven days to Friday 14 March 2025 at 5pm AEDT.
"In a meeting with the Retirement Living Council today, the Commission has acknowledged the unintended consequences in its initial liquidity standards modelling. This acknowledgment is an important one, and we thank them for it," Daniel said.
"As a consequence, they have initiated new modelling.
"Additionally, the Commission has agreed to extend the consultation period on financial standards until Friday 14 March.
"That is an extension for everyone, not just the RLC and village operators," said Daniel told The Weekly SOURCE before re-entering the meeting.
As The Weekly SOURCE revealed last week, residential aged care providers operating independent living units (ILUs) and retirement villages will have to retain 10% of ILU and retirement village refundable amounts as liquid funds under new aged care financial and prudential standards proposed by the ACQSC that will take effect from 1 July this year.
The RLC states this indicates the Commission does not understand the retirement village business model in that the average village resident occupies their home for eight to ten years (or say an average of 10% turnover a year). The operator makes 100% of their income from the DMF when they depart.
"We've heard from a lot of operators over the past 48 hours who have communicated what these changes would mean for their organisations, their communities and their future supply. This advice has been critical,” Daniel said, adding he was reconvening for a second meeting with ACQSC next week.
Of particular concern is the impact on smaller community based operators that rely on their village revenue to subsidise their loss making residential care activities.
ACQSC’s requirement of retaining 10% equates to one year’s full gross profit before overheads; it would need to be siloed off and it would hit badly-needed new development funding as the ageing population surges.
Peter Edwards, Acting Deputy Commissioner ACQSC, told Senate Estimates they had consulted broadly when developing the liquidity ratios, including with the Older Persons Advocacy Network (OPAN), Council on the Ageing (COTA), Ageing Australia, McGrathNicol, StewartBrown, and the Aged Care Workforce Remote Accord.
The RLC successfully sought a meeting with ACQSC after a holding a meeting with retirement living CFOs who expressed grave concerns about the liquidity proposals.
