Jan 25, 2022

Not-for-profit aged care provider in South Australia pays bosses $9 million

Aged care provider huge payday

However, analysis shows that it paid its senior executives $9.08 million while charging the elderly residents in its care some of the heftiest administration and management fees in all of South Australia. 

As well as exposing the $9 million payday of Resthaven’s top staff, The Advertiser analysed close to 60 in-home care providers. Worryingly, their findings show South Australia’s seniors were lumped with upwards of $26,000 per year in administration and management fees. 

Anglicare SA, Resthaven and ACH, three of the largest not-for-profit providers, make up the bulk of organisations with the loftiest charges.

As shown in the most recent financial documents by Resthaven, the organisation recorded a total gross revenue of $216.3 million throughout its aged care and retirement living portfolios the previous financial year. This number included a large amount of taxpayer funded government grants to the tune of $156 million.

A total of $199.6 million was spent across the organisation, with 70% going towards the payment of employees. 

Resthaven is clearly shown to have paid out $9.08 million in remuneration to 11 board members, two executives and a host of program managers.

Mr Birbeck has subsequently conveyed that the significant sum of money was distributed between more than 60 people. 

In explaining the move to distribute the funds, the most recent financial report says its board members were given a “modest level of fee remuneration for their services”.

The organisation charges $408 for four hours of case management per fortnight in relation to a Level 4 home care package. In addition to that charge, Resthaven also charges $186 for administration costs a fortnight.

Barossa Village Incorporated, a community-based organisation, charges the steepest care and package management fees in SA, at $997.92 per fortnight.

Across its four executive staff in 2021, each member was remunerated $905,070.

Simon Newbold, the boss at Barossa Village, says that the organisation has a varied fee structure compared to the majority of providers, and charges some of the lowest hourly rates for services within SA.

Highlighting an unregulated area, the number of hours of care that a provider may set towards senior residents varies considerably in SA.

A private company, MyCareSolution charges some of the lowest administration fees while providing an average of 14 hours of in-home service per week on a Level 4 package – an elevated amount in comparison to the national average of eight hours and 45 minutes.

Resthaven and Barossa Village both refused to disclose the amount of hours in care their clients received on average.

Mr Birbeck said that numerous clients receiving “high level care” received multiple visits across each day of the week.         

Labor, as of yet, has not spoken directly to any election commitments in regards to putting an end to the price gouging of in-home care. Opposition aged care spokeswoman Clare O’Neil has noted that the high administration fees charged by providers were among the “top concerns” for senior Australians.

She said, “Older Australians need a Government that isn’t afraid to put the dodgy providers on notice and take a tough stance on protecting their care – that’s what Labor will be.”

A statement from the federal government Health Department notes that it has invested upwards of $18 million so as to bring greater oversight of home care packages, including conducting a review into all associated administrative charges.

The department is set to publish its review findings this upcoming March.

On January 24, Resthaven CEO Darren Birbeck issued the following statement:

“Resthaven prides itself on providing outstanding care and support for older people and their carers. Recent misleading and biased reporting in the mainstream media is most disappointing.

“I’d like to provide some background and correct any misconceptions that may have been caused by an article that implied that Resthaven’s senior leaders are profiting from the fees charged to older people. This is simply not true.

“Each of the matters raised are addressed below:

  • Management salaries – the $9.08m quoted in The Advertiser on 22 January 2022 includes the salaries of every Program Manager, Senior Manager and Executive across all of Resthaven.  The comparison between Resthaven’s reported executive salaries and those of other providers is not relevant as Resthaven has historically reported transparently on all of its managers, while other providers only report on their executive leadership teams.
  • Surplus – Resthaven posted a $16.6m surplus in 2020/21, of which $13m related to investment income. Resthaven invests all residential accommodation deposits held on behalf of its residents in an investment portfolio, which moves in line with the share market.  When the share market goes up, the value of the portfolio increases and this gain (or loss when the market goes down) is recognised in Resthaven’s surplus.  A significant proportion of the 2020/2021 surplus reflects the improvement in the share market. Losses were recovered from the previous financial year, at the beginning of the pandemic, when the market fell, with an adverse impact on prior year’s results.
  • Care Management Fees – pricing for home care packages is complex. The comparisons made in the article were not valid. Meaningful comparisons are difficult. The internal analysis Resthaven undertakes indicates that our administration and management fees are in line with those charged by other large and reputable providers.

“As a not-for-profit public benevolent institution, with an 86 year history, any surplus made is used to improve the lives of older people.

“Resthaven currently employs around 2,850 staff across 41 locations throughout metropolitan and regional South Australia.

“Resthaven makes significant investments in the redevelopment of residential sites, with both Resthaven Bellevue Heights and Resthaven Westbourne Park currently undergoing major redevelopments, and Resthaven Community Services continue to expand, with new offices in Goolwa, Victor Harbor, Gawler and Goodwood and respite cottages in Aldinga, Victor Harbor and Toorak Gardens.

“At a time when the sector and its people should be congratulated for our response to the COVID-19 pandemic, I question the motives behind the article.

“Our people make an important contribution every day in the lives of older people. I thank them and am sorry for any upset this article may have caused.”

 

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  1. If the Commonwealth Guarranteed Accommodation Deposits are invested in share market linked investments it is a good example of the failure of Aged Care regulators.
    Tax payers are guaranteeing to repay Accommodation Deposits for the security of residents savings, not to provide investment income to pay Managers and Directors bonuses.
    When the share market goes down will Managers and Directors give the money back ?

    1. G’day Max, a supported resident in residential care attracts close on $20k for the accommodation part of the care. The RAD of $550k in the bank returns less than 1% ..$5000. Leaving a deficiency of $15k per year per resident.
      The government hasn’t kept pace with the cost of providing care as the royal commission made perfectly clear. To invest in the share market just makes sense doesn’t it.

      They have a choice of doing nothing or trying to get a decent return and pay the bills. The numbers look big but the average return on investment for a nursing home over the last half dozen years is less than 1%.
      The sector can’t improve itself when the federal government has massively cut funding to the sector. Of the promised $17.7b last year only $500m has come through to the residents care!

  2. You gotta love the hypocrisy.. ” not for profit” .
    These are the worst of the worst, they get identical funding to private homes but don’t pay taxes etc etc. They get put on pedestal by the factually flawed part of the community and reap the benefits.
    They take donations ( tax free) and always first in line for a government grant scheme and of course they just rort the Home care system, just because everyone is ripping off the home care recipient doesn’t make it right. Why isn’t someone fixing this??

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