Going cashless

Aged care facilities are ditching the petty cash tin in favour of debit cards to reduce staff administration and improve transparency for residents and their families, writes Natasha Egan.

Aged care facilities are ditching the petty cash tin in favour of debit cards to reduce staff administration and improve transparency for residents and their families, writes Natasha Egan.

Publicly listed residential aged care provider Japara is among a growing number of providers swapping out cash for debit cards.

The cards are mostly used by Japara administration staff at the homes for purchases on behalf of residents, says Michael Holloway, transaction services manager at Japara.

“In all there are about 50 Japara homes currently using it,” Holloway tells Australian Ageing Agenda.

Japara is using the debit card system through aged care payment management company Capital Guardians.

“We replaced all resident cash with Capital Guardians debit cards, however, those residents who didn’t want to use Capital Guardians have the onus of responsibility if their families bring in cash for them into the home. This is very few and far between,” says Holloway. 

Benefits include reduced risk of handling cash, less administrative effort from staff and increased transparency for residents and their families, he says.

“We have eliminated all the manual handling associated with handling residents’ cash and the risk associated with this. Essentially any purchase the resident would have made via cash is put on the debit card.

“The admin [staff] then enter this into the Capital Guardians system and Capital Guardians charge the resident and reimburse the debit card, minus a small fee and handling charge. The float balance of the card should therefore be maintained, give or take fees associated with purchase. All transactions are fully transparent to the residents’ families via the Capital Guardians login,” Holloway says.

Conversely, Holloway says there are no disadvantages beyond the challenge of getting administration staff and homes to understand the purpose of the card and ensure they update purchases in Capital Guardians.

“Some are better than others. Those that understand thrive while those who don’t make the same effort, tend to struggle more,” he says.

Ross McDonald, founder and executive director of Capital Guardians, predicts the end of cash payments in aged care facilities is coming. His company provides payment management services for aged care residents at around 1,000 facilities across the country.

Ross McDonald

“In the wake of COVID-19, many retailers are encouraging consumers to use contactless payments rather than physical cash. But even prior to COVID-19, cash was on the way out in aged care and the health industry,” McDonald tells AAA.

He says that is largely due to the:

  • direct costs of managing cash in bank fees and administration
  • indirect costs of staff time in managing the resulting paperwork
  • limits on financial controls, ability to audit expenditure and other governance requirements.

“Aged care providers have enough pressure staffing all their formal governance requirements and simply cannot afford to be distracted and take on a discretionary role administering cash,” McDonald says.

To help aged care providers ditch their petty cash tin and go cashless, Capital Guardians launched a debit card solution in mid-2019.

“We have around 200 facilities using our debit card across six different providers. We are planning to push it out to all of our providers, which includes around 1,000 facilities using our cash management,” McDonald says.

 How it works

The debit card can be used for facility and resident expenses and topped up to an amount similar to what was held previously in cash. It can also be named to the facility rather than the individual, which avoids the identity check and enables card sharing between lifestyle staff and reception, says McDonald.

The card has a cash float and after it is used, a verification photo of the receipt is required via the Capital Guardians smart phone app to replace the money. If the card is used but not verified, the money will not be replaced, says McDonald.

“Transactions are imported daily to facility staff logins, which require allocation to coded facility expenses, such as activity consumables, or a resident’s private account, such as for a lunch outing. Allocated monies are paid back to the debit card weekly.

“If money is spent on the debit card and not allocated the debit card will cease working, prompting facility staff to allocate transactions,” he says.

At the end of the month, head office staff can download reports from a transaction dashboard.

“There is no requirement for monitoring as resident expense allocations are reviewed by families and facility expenses are imported directly, including coding into the finance system,” McDonald says.

This article first appeared in Australian Ageing Agenda magazine (July-Aug 2020).

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Tags: cash tin, cashless, COVID19, debit card, japara, michael holloway, money, ross mcdonald,

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