Managing Prudential Risk in Residential Aged Care

Overview

Public Consultation

The 2018 Budget included an announcement that the Government would move to strengthen the prudential standards in aged care to improve the financial management of providers and limit risk of provider failures.

This would provide better protection to residents and further limit risks of triggers of the Bond Guarantee Scheme.  This followed from recommendations in an Ernst and Young (EY) Review that proposed to make various changes to strengthen the prudential standards, which were supported in principle by the Tune Review.

In its examination of these Standards, EY identified gaps that may translate as larger risks to the protections of RADs. In broad terms, EY recommend increased transparency in approved provider reporting, enhanced disclosures and improved governance including financial risk management.

Since the release of the EY report, the Department has continued to consider the proposed options and has consulted with both peak organisations and technical experts. As a result, some alternative approaches to EY’s options and some new options for achieving the measure’s aims have also been developed.

Call for submissions

This call for submissions seeks to gather the sector’s views on the options for better managing prudential risk in residential care. Those views will be a key input for Government’s consideration, as will achieving an appropriate balance between effective protections for consumers and unnecessary administrative burden.

A discussion paper setting out the key policy issues, options and implementation matters is attached for your consideration and response. Additional technical information and legal context can be accessed below, as can the links to both the full EY report and the Tune Review.

The call for submissions on Managing Prudential Risk in Residential Aged Care opened on 1 February 2019 and closes on 15 March 2019.

Your submission

Information about how to make your submission is included in Part 1 of the discussion paper. Please email your completed submission to the Consultations Inbox at the following address.

FFBCONSULTATION@health.gov.au

Enquiries can be directed to the contact officer listed at the top of this page. Thank you.

What happens next

The Managing Prudential Risk in Residential Aged Care consultation has now closed.

Thank you to all respondents.

Your feedback has been compiled for consideration by the Commonwealth Government.