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ACAR 2020 – A golden opportunity for industry: Opinion

The ACAR 2020 surprise announcement just prior to Christmas offers a golden opportunity for our industry amid ongoing challenges and uncertainty experienced in the past year.

Although the Department of Health’s (DoH) latest offer is reduced from that planned prior to the pandemic, it is a great step forward and should be a major focus of our industry.

Prior to the pandemic, the DoH announced 10,000 residential aged care (RAC) places, 750 short-term restorative care (STRC) places and $60 million in capital grants to be awarded through ACAR 2020.

The pandemic and likely reforms in the aged care industry have prompted a shift in DoH’s focus. Now only 2,000 RAC places nationally are on offer, while the DoH holds 8,000 places. Additionally, the DoH will offer 1,028 instead of 750 STRC places.

Significantly, the government will also award a total of $150 million in capital grants to support providers to undertake essential capital works and infrastructure improvements.  

RAC

The DoH will allocate 2,000 RAC places in total nationally. The application in this ACAR will be assessed differently from those of previous ACARs. The applications will be assessed on factors such as timeliness and location.

The projects which offer care immediately (bed-ready projects or making places operational in the next 18 months) will be prioritised. The location priority is ranked from 1 to 6, with Statistical Area 3 (SA3s) ranked 1 considered areas of highest need and SA3s with ranking 6 classified as the lowest need areas. The location priority map is available on the department’s website.

The timeliness and location will determine the priority of the application. For example, applications demonstrating bed-ready projects located in category 1 SA3s will receive the highest priority. Whereas longer-term projects (operational in more than 18 months) located in category 6 SA3s will be given the lowest priority.

STRC places

As part of ACAR 2020, the DoH announced the allocation of 1,028 places – 278 more than originally provided. Out of 1,028 places, 500 are allocated for 2020–21 and 528 for 2021–22. Around 29 per cent of the places will be allocated in NSW, followed by Victoria with around 25 per cent and Queensland with around 21 per cent.

Capital grants

The DoH announced a significant amount of $150 million as part of ACAR 2020. Much higher than the original $60 million. The funds are for projects in regional, rural and remote areas and/or projects which meet the needs of Special Needs Groups to ensure quality care will be delivered to communities in need.

The capital grant amount offers a great opportunity for providers to fund their capitals works for new facilities as well as undertake the essential upgrades to the existing services. For example, this could include reducing shared rooms/facilities to ensure better access and continuity of care to current and future customers.

The success of capital grants will depend on:

  • geographic location; and/or
  • the need/demand for RAC places meeting needs of Special Needs Group; and
  • the inability of providers to fund the projects through non-grant means such as borrowing.

The DoH will focus on:

  • supporting providers to deliver residential aged care in regional, rural and remote areas;
  • better access to dementia-specific services; and
  • upgrades to infrastructure to ensure resident amenity, service viability and infection control.

The projects will only be considered if they meet the applicant, financial and project eligibility. The DoH will also take into consideration a provider’s compliance history and may also consider the past history of managing the previous allocation of licences, capital grants and zero-interest loans. 

While ACAR 2020 does not deliver the anticipated RAC places and bed licences, it does offer a golden opportunity to providers who do not have the financial capacity to offer quality services in regional, rural and remote areas and/or offering much-needed services for Special Needs Groups and address key issues such as dementia to ensure better access to care.

Safdar Ali is the director of The Ageing Equation, a consultancy whose services include ACAR application preparation, market catchment studies, financial feasibility analysis and acquisition advisory services.

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