Explaining the Covid-19 Nursing Home Temporary Support Scheme
08 April 2020
Brian McEnery, Partner & Head of Advisory, and Roger Kiely, BDO Corporate Finance & Recovery, explain the Covid-19 Nursing home temporary Support Scheme and how it will work in practice.
On Saturday 4th April, the Minister for Health, Simon Harris, announced measures aimed at supporting the nursing home sector in Ireland as it responds to the challenges of Covid-19. Important operational supports included access to PPE, prioritisation of staff testing, and twice daily staff screening were announced and welcomed by the BDO Healthcare Team and the clients we represent. Delays in testing, in particular, has been concerning for nursing home operators and healthcare staff working within these facilities, but the hope is that as increased testing is rolled out in the coming days and weeks, the benefits will be felt first in healthcare facilities such as nursing homes. In addition to these operational measures, the Minister announced a temporary Covid-19 Financial Support Scheme for private and voluntary nursing homes. It is envisaged that this scheme will operate for a three-month period.
The Covid-19 Financial Support Scheme has two key components:
- Assistance for all private & voluntary nursing homes subject to a standard threshold - this amounts to €800 per resident per month for the first 40 residents, €400 per resident per month for the next 40 residents and €200 per resident per month thereafter.
- Enhanced outbreak assistance business case in the event of a Covid-19 outbreak - The maximum assistance available to an individual nursing home per month will be twice that of the agreed monthly support (see 1 above) or a maximum amount of €75,000 inclusive of the monthly support, whichever is the lesser.
The guidance provided by the Department of Health has indicated that this scheme will commence for the month of April. They also have indicated that financial support will be provided based on the number of Nursing Home Support Scheme (or Fair Deal) residents in place for the month of March. BDO is of the view that this should be extended to non-Fair Deal residents, such as private residents as the impact of Covid-19 will be felt by all nursing home residents and not just those who subscribe to the Fair Deal Scheme.
The following examples illustrate how this scheme will work in practice for nursing home operators:
Scenario 1
| Number of Residents |
30 |
| Standard Assistance Payment per Month (30 residents * €800) |
€24,000 |
| Max. Enhanced Outbreak Assistance Payment per Month |
€24,000 |
| Total Max. Payment per Month |
€48,000 |
Scenario 2
| Number of Residents |
50 |
| Standard Assistance Payment per Month (40 residents * €800; 10 residents * €400) |
€36,000
|
| Max. Enhanced Outbreak Assistance Payment per Month |
€36,000 |
| Total Max. Payment per Month |
€72,000 |
Scenario 3
| Number of Residents |
70 |
| Standard Assistance Payment per Month (40 residents * €800; 30 residents * €400) |
€44,000 |
| Max. Enhanced Outbreak Assistance Payment per Month (capped) |
€31,000 |
| Total Max. Payment per Month |
€75,000 |
From the examples set out above, once a nursing home has more than 53 residents, it will begin to be subject to the €75,000 cap that applies to the Enhanced Outbreak Assistance Payment. While the Standard Assistance Payment will apply to all private and voluntary nursing homes automatically, in order to qualify for the Enhanced Outbreak Assistance Payment, individual nursing homes will have to submit a business case to the HSE. The Department of Health has yet to provide guidance on what the business case should contain, but we believe that businesses will need to include the following:
- Details of the Covid-19 outbreak
- Details of the measures undertaken to mitigate the effect of the outbreak on residents
- Financial Analysis & Financial Projections – impact of the outbreak on the financial performance and position of the home
- Breakdown of incidental costs incurred as a result of a Covid-19 outbreak – to include wages and salaries, PPE costs etc.
- Independent certification from an auditor that the expenditure was incurred and directly relates to Covid-19
BDO can assist any nursing home operator that requires support in completing this business case for submission to the HSE.
The implications of the Covid-19 Nursing Home Financial Support Scheme also need to be considered in relation to other support schemes such as the Wage Subsidy Scheme. BDO believes the Minister for Health should clarify that any supplemental payments received under this scheme will not be treated as turnover for the purposes of determining whether a nursing home’s turnover has declined by 25% or more in Q2 2020 in order to qualify under the Wage Subsidy Scheme.
More information on the Covid-19 Nursing Home Financial Support Scheme can be found here: https://www.gov.ie/en/news/228125-minister-for-health-announces-enhanced-measures-to-support-nursing-h/
If you have any queries or would like more information, please contact: