What is an Accommodation Agreement?
If the service provider has asked you to pay some or all of the cost of your accommodation, you will need to make an Accommodation Agreement with the home. This can be included as part of your Resident Agreement or it may be a separate document.
What does an Accommodation Agreement cover?
Your agreement should include:
What are ‘fixed’ costs?
and that one-off Adjustment payment
If you choose an extra-service aged care home, then you must have an extra-service agreement between you and your aged care provider. The agreement should specify what the home will provide, how much it will cost, how often the fees can be increased and by how much.
This extra-service agreement will be in addition to your normal resident agreement.
Additional fees for specified care and services:
You are looking particularly under Version history amendments (page 4), and then at Attachment A which deals with:
Additional reading:
http://www.agedcarecrisis.com/resources/nursing-home-checklist#care-and-services-what-s-included-extra-charges
Charging for residential aged care services Residents pay fees to help with the cost of their care, if they can afford it. We changed the fee arrangements on 1 July 2014, but the old arrangements still apply to people who entered care before that date.
Copy of Accommodation Bond Agreement
Within seven days after an accommodation agreement is entered into, approved providers must notify the care recipient, in writing, that the approved provider will give the care recipient, within 7 days of a request by the care recipient, the information and documents set out in section 57 of the Fees and Payments Principles which include:
For further detail on the information that must be provided on request (see section 57(1)-(3), Fees and Payments Principles).
Act reference: Fees and Payments Principles 2014 (No. 2) section 57
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The new Aged Care Commissioner says that most people who have cause to make a complaint don’t. This is particularly in areas such as health, disability and aged care services where there are high stakes such as ongoing care needs and a dependence on the service.
"When we receive information, our first step is to assess any risk associated with the issues being raised. If a complaints officer considers the issues raise significant or major risk, the matter is quickly escalated to a manager whose main consideration at this point is to mitigate risk to the care recipient and/or any other care recipients. The manager may contact a service/approved provider and seek an immediate response to the concern(s) raised. If urgent action is needed the Commissioner will refer the matter immediately to the Quality Agency. The Commissioner may also refer the matter to other organisations and/or fast track the issue(s) straight to a formal resolution process for detailed consideration and where a site visit can be conducted. The Commissioner’s clinical advice unit may be asked to provide a view on the seriousness of clinical issues and whether urgent action is needed."
“That is understandable because people are vulnerable, sometimes they’re unwell or they might be frail. Quite often it is about an ongoing relationship. It can be too hard or they don’t want to make a fuss.”
Some people are scared to speak up, or worry about the implications if they raise a concern.
“At any stage my staff can do site visits, unannounced. That’s one of the ways we sometimes deal with anonymous issues around things like cleanliness, or people being showered at a terrible time of the night. We don’t just rely on the information we get from the parties, we can and do have a look for ourselves.”
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Accommodation prices approved by the Aged Care Pricing Commissioner
Q: Do accommodation prices approved by the Aged Care Pricing Commissioner remain valid if the service transfers ownership?
A: Yes. If the Aged Care Pricing Commissioner has approved accommodation prices above a refundable deposit of $550,000 for a service, and the ownership of that service transfers to another Approved Provider, the approval remains valid provided that the conditions attached to the approval continue to be met.
An approval ceases to have effect if there is a change in the location at which residential care is provided through the service.
Q: Can accommodation prices approved by the Aged Care Pricing Commissioner be indexed?
A: Yes. Under section 29 of the Fees and Payments Principles 2014 (No. 2), providers are permitted to index an accommodation price approved by the Aged Care Pricing Commissioner. The approved amount may be indexed annually using the following formula:
Indexed amount = Approved amount x (Most recent index number / Previous index number)
The index number refers to the All Groups Consumer Price Index (CPI) number, which is published on the Australian Bureau of Statistics website. The relevant CPI number is the rate applicable for the quarter ending before the first day of the approval year.
For example:
On 1 July 2014, a service receives approval from the Aged Care Pricing Commissioner to charge an accommodation price of $700,000 for a room. On 1 July 2015, the provider can apply indexation to the approved price. The most recent index number would be the CPI rate for the quarter ending 30 June 2015. The previous index number is the CPI rate for the quarter ending 30 June 2014.
The indexed amount is generally rounded to the nearest whole dollar. However, in cases where the indexed amount to be rounded is 50 cents, the amount is rounded down.
Q: Does indexation apply to accommodation prices agreed with existing residents?
A: No. Indexation cannot be applied to prices agreed with existing residents who have a current accommodation agreement in place. The indexed amount only applies in relation to a new resident who has not entered into an accommodation agreement or care prior to the day that the approved amount is indexed.
Q: Are accommodation prices approved by the Aged Care Pricing Commissioner automatically updated for indexation on the My Aged Care website?
A: No. Prices published on My Aged Care are not automatically indexed; providers are responsible for updating the published prices.
Q: If I publish an accommodation price that is less than the approved amount, which amount do I index?
A: It is the approved amount that is indexed, regardless of the accommodation price that is actually published. This is then the maximum amount that could be published.
Q: Can a resident who entered care on or after 1 July 2014 be asked to pay a higher accommodation price if they want to move to a new room with a higher published price?
A: If a resident (who entered care on or after 1 July 2014) moves rooms within a facility, they may be charged an accommodation price that is higher or lower than the amount that they were paying, as long as the move is voluntary. The accommodation agreement must be varied to specify the new price and new room or part of room.
The new agreed price for the new room cannot be more than the maximum price that was published for that (new) room on the day that the agreement was varied. It is the maximum permissible interest rate (MPIR) current on the day that the accommodation agreement is varied that must be used to calculate the equivalence between the refundable deposit and daily payment amounts for the new room. If the accommodation payment for the new room is higher than the amount previously being paid, the resident may choose to pay the additional amount by daily payments, by a refundable deposit, or by a combination of both.
If the accommodation payment for the new room is lower than the amount previously being paid, and the resident has paid a refundable deposit, the provider must refund any excess balance to the resident.
Q: Can a resident be asked to pay a higher accommodation price if the move is not voluntary?
A: No. If a resident (who entered care on or after 1 July 2014) moves rooms, but the move is not voluntary, they cannot be asked to pay a higher accommodation payment than they were previously paying, even if the published price for the new room is higher.
If the price for the room (that was published on the day that the notice to move was given to the resident) is lower than the amount the resident was previously paying, then they cannot be asked to pay more than that published amount. It is the maximum permissible interest rate (MPIR) applicable on the day that the notice to move is given to the resident that must be used to calculate the equivalence between the refundable deposit and daily payment amounts for the new room.
A move is not voluntary if:
The criteria for the medical or other health practitioners for (a)(ii) above are:
https://agedcare.health.gov.au/aged-care-reform/residential-care-and-home-care-frequently-asked-questions
16 July 2019
When do I have to sign the Accommodation Agreement?
You still have 28 days after moving into your aged care home to decide how you want to pay your accommodation costs and sign your Accommodation Agreement.
If you like, you can ask someone else to negotiate your care fees with the aged care provider on your behalf. This is something you may wish to consider when preparing to move.
What if I need help understanding the agreements?
Since the Resident Agreement and Accommodation Agreement are legally binding documents, it is important you understand everything in the document before you sign it. If you have any questions, you should ask your new aged care home. It is their responsibility to make sure the agreements offered to you are clear.
If you like, you can ask your family, friends, carer or a legal practitioner to help you understand the terms of your agreements. The proposed agreements may not automatically include all the things that you think are important, so it is a good idea to check:
Need more help? Finding a financial planner:
Financial planners may be able to help with retirement planning, wealth management, savings planning, superannuation, banking and portfolio administration. They may also give advice on managed funds, and other financial products available in the marketplace.
Selecting the right financial planner for your situation is essential. You should choose a licensed financial planner who can provide the services you need. Your financial planner should also be able to provide you with a Financial Services Guide.
You can check whether a company or a financial planner is licensed by searching the Aged Care
https://www.moneysmart.gov.au/life-events-and-you/over-55s/aged-care on the Australian Securities and Investments Commission website.
You can also search for financial planners in your area on the Financial Planning Association of Australia website. This website provides the contact details for all licensed financial planners in the country.
MoneySmart:
The Australian Securities and Investments Commission also runs the MoneySmart website which helps people make smart choices about their personal finances. MoneySmart has lots of tools and information to help people with decisions about issues such as retirement planning, aged care accommodation and financial products such as reverse mortgages, see:
If you are having language difficulties because the agreements are not written in your preferred language, you can contact the Australian Government Translating and Interpreting Service (TIS) on 131 450. TIS covers more than 100 languages and is available 24 hours a day, 7 days a week, for the cost of a local call.
Wanting Financial advice?
You may want to consult with a financial adviser about your finances. There are various Click here for Government services and resources that can help you obtain appropriate financial advice. It’s a good idea to do some research to see what options work best for you. You can also use Centrelink's free Financial Information Service on 132 300.
Facing Financial Hardship?
If you believe you would face financial hardship in paying the required fees and payments, you can ask to be considered for financial hardship assistance. Each case is considered on an individual basis.
Depending on your personal situation, you may apply for financial assistance with:
Assessment of financial hardship assistance claims
To determine if your aged care costs would cause you financial hardship, the Department of Human Services (DHS) will consider your:
You can apply for financial hardship assistance for your permanent residential aged care fees and charges, please use a Claim for Financial hardship assistance – Residential Aged Care form (SA461).
https://www.humanservices.gov.au/individuals/forms/sa461
10 July 2019
What are unrealisable assets?
If you have more than $34,206.90 in assets, you can apply for an asset to be declared as unrealisable. An asset is considered unrealisable if you cannot sell it or borrow against it.
More information on unrealisable assets will be available when you apply for financial hardship assistance through the Department of Human Services.
The following assets may be considered as unrealisable:
If you are applying for financial hardship assistance for Home Care and Residential Care Respite Form you need Form SA462.
https://www.humanservices.gov.au/individuals/forms/sa462
10 July 2019
or for more information on fees and charges or financial assistance, call My Aged Care on 1800 200 422 or visit myagedcare.gov.au
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What If I am not able to sign the agreements?
If you understand your agreement and want to sign it but are physically unable to, you can ask someone with the legal authority to sign on your behalf, such as someone who holds power of attorney for you.
Rights and Responsibilities
No matter which aged care home you move into, your rights and responsibilities will be the same as those of every other resident. To make sure your rights and responsibilities are protected, there is legislation that all aged care homes funded by the Australian Government must follow. The Charger of Residents' Rights and Responsibilities will be displayed in your aged care home, or you can ask your home for a copy when they offer you your Resident Agreement.
For additional information, go to www.myagedcare.gov.au This information is for your general information and use only, and is not intended for any other purpose.
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Part 4--Accommodation payments and accommodation contributions
- in addition you may need help in understanding your Resident Agreement
Division 1--Accommodation agreements
excerpt from:
http://www.comlaw.gov.au/Details/F2014L00829/Html/Text#_Toc391026107
for your further information, it is best to read the relevant sections yourself. Above is the link.
14 Purpose of this Division
For Division 52F of the Act, this Division specifies:
(a) other information that an approved provider of a residential care service or an eligible flexible care service must give a person before the person enters the service; and
(b) matters that the Secretary must have regard to in considering whether to extend the period within which an approved provider of a residential care service or an eligible flexible care service must enter into an accommodation agreement with a person; and
(c) other matters that must be set out in an accommodation agreement.
15 Information to be given before person enters residential care service or eligible flexible care service
For subparagraph 52F‑1(1)(a)(ii) of the Act, the approved provider of a residential care service or an eligible flexible care service must give the following information, in writing, to a person before the person enters the service:
(a) a statement that, if the person pays part or all of his or her accommodation payment or accommodation contribution by refundable deposit, the approved provider will, within 7 days of receiving a request from the person, give the person the information and documents referred to in subsection 57(1);
(b) information about the interest rate payable if there is a delay in the payment of daily accommodation payments or daily accommodation contributions;
(c) the method and timing by which any overpaid accommodation payments or accommodation contributions will be refunded to the person;
(d) information about refund arrangements for refundable accommodation deposits and refundable accommodation contributions;
(e) the prudential arrangements applying to refundable accommodation deposits and refundable accommodation contributions.
16 Extension of time for entering into accommodation agreement
For subsection 52F‑2(2) of the Act, in considering the period by which the time for entering into an accommodation agreement is to be extended, the Secretary may have regard to any matter that the Secretary considers relevant.
Additional matters in relation to voluntary moves within the service
(3) The accommodation agreement must set out that, if the person proposes to move to a new room, or to a new part of a room, in the service, and the move is voluntary:
(a) the accommodation agreement must be varied, before the move occurs, to specify the new room or the new part of the room; and
(b) the day on which the agreement is varied will become the price agreement day for the person; and
(c) the person may be charged an accommodation payment amount, after the move, that is higher or lower than the accommodation payment amount the person is paying before the move, but the person must not be charged an accommodation payment amount that is higher than the maximum accommodation payment amount that was made publicly available by the approved provider under section 19 for the person’s new price agreement day and the new room or the new part of the room; and
(d) if the person is to be charged a higher accommodation payment amount for the new room or the new part of the room—the person may choose to pay the additional accommodation payment amount by:
(i) daily payments; or
(ii) refundable deposit; or
(iii) a combination of refundable deposit and daily payments.
Additional matters in relation to non‑voluntary moves within the service
(4) The accommodation agreement must set out that, if the person is to be moved to a new room, or to a new part of a room, in the service for less than 28 days, and the move is not voluntary:
(a) the approved provider must, before the move occurs, notify the person, in writing, of the new room or the new part of the room; and
(b) there will be no change to the person’s price agreement day; and
(c) the person will continue to be charged the same accommodation payment amount that the person is paying before the move.
(5) The accommodation agreement must set out that, if the person is to be moved to a new room, or to a new part of a room, in the service for 28 days or longer, and the move is not voluntary:
(a) the approved provider must, before the move occurs, notify the person, in writing, of the new room or the new part of the room; and
(b) the day on which the notice is given will become the price agreement day for the person; and
(c) the person must not be charged:
(i) an accommodation payment amount that is higher than the accommodation payment amount the person is paying before the move; or
(ii) if the maximum accommodation payment amount (the provider’s published maximum accommodation payment amount) that was made publicly available by the approved provider under section 19 for the person’s new price agreement day and the new room, or the new part of the room, is lower than the amount the person is paying before the move—an accommodation payment amount that is higher than the provider’s published maximum accommodation payment amount.
(6) For subsections (4) and (5), a move by a person to a new room, or to a new part of a room, in a residential care service or an eligible flexible care service is not voluntary if:
(a) the move is necessary on genuine medical grounds as assessed by:
(i) an aged care assessment team; or
(ii) at least 2 medical or other health practitioners who meet the criteria mentioned in subsection (7); or
(b) the place occupied by the person becomes an extra service place and the person elects not to pay the extra service fee; or
(c) the move is necessary to carry out repairs or improvements to the premises of the service.
(7) For subparagraph (6)(a)(ii), the criteria are:
(a) one practitioner must be independent of the approved provider and the residential care service or eligible flexible care service, and must be chosen by the person; and
(b) both practitioners must be competent to assess the aged care needs of the person.
Legislated Review of Aged Care 2017
MOVING TOWARDS A CONSUMER DEMAND-DRIVEN SYSTEM:
There is a broad consensus shared by government and sector stakeholders that aged care requires further reform to become a more consumer-centred system. This includes orienting care and the supply of different care types around the demands of consumers, and giving consumers greater choice and control. This objective is evident in the work of advisory bodies in the sector: the Aged Care Financing Authority, the Aged Care Sector Committee, and the National Aged Care Alliance.
There are four key conditions that must be met before one of the main steps in creating a demand-driven system—removing regulatory controls to uncap supply—can be realised.
Those are:
• Government needs an accurate understanding of the underlying demand for aged care services.
• Consumers must make equitable and sufficient contributions to the costs of their care, without those contributions being so high that they create a barrier to accessing care.
• There must be a robust system for assessing eligibility for government-funded aged care services.
• Government policy needs to ensure equitable supply of services across different population groups, and in settings where there is limited choice or competition, such as remote locations.
Many of the recommendations of this Review are steps towards meeting these four conditions.
ANNOUNCEMENTS
ComLaw to become the Federal Register of Legislation
Legislative changes, which commence on 5 March, will establish a single Federal Register of Legislation which combines the content of ComLaw, the Federal Register of Legislative Instruments (FRLI) and the Acts database into a single register.
The address for this website will change to https://www.legislation.gov.au but any bookmarks or links you may have to the current ComLaw website will be redirected automatically.
For those additional questions: Have a look at "Residential Care and Home Care Frequently Asked Questions".
16 July 2019
Q: Can a consumer roll over their accommodation payment when they move facilities?
A: No. Under the Aged Care Act 1997, the accommodation payment must be refunded ‘if the care recipient is to enter another service to receive residential care’.
Prior to entry to a new service, a resident subject to the 1 July 2014 fee arrangements will need to negotiate and agree an accommodation price with their new provider. The new provider cannot charge an accommodation price that is greater than their advertised price.
Unlike the arrangements in place in respect of bonds paid before 1 July 2014, where residents who paid an accommodation bond could have the bond balance transferred to the second aged care home, accommodation payments are not ‘automatically’ rolled over where a resident moves to a new service.
Q: Does a resident’s DAP need to be re-calculated each time the maximum permissible interest rate (MPIR) changes?
A: No. The MPIR used to work out the equivalence between a refundable deposit and daily payment amounts for a resident is that which is current on the day the resident agreed an accommodation payment with the aged care home. The same MPIR continues to apply unless the person subsequently moves rooms within the aged care home.
Q: What can be deducted from a RAD?
A: If a resident has paid a refundable deposit, the provider must deduct DAPs at the resident’s request. Other amounts – such as care fees or the costs of additional services – may be deducted, if agreed between the resident and the provider. This must be set out in writing.
Q: Can a resident agree to an accommodation price that is greater than their net assets?
A: Yes. The new accommodation payments arrangements give residents and providers the flexibility to negotiate an accommodation price that is greater than a resident’s net assets. Residents can choose to pay for their accommodation by a lump-sum refundable deposit, rental-style daily payments, or a combination of both.
The combination method allows residents to pay a partial refundable deposit, ensuring that they are left with the minimum permissible asset level (currently $47,500), and then pay the balance of the agreed price by daily payments. Residents can elect to have the daily payments deducted from the refundable deposit.
Q: How long does a resident have to pay a RAD?
A: A resident has 28 days from the date they enter the facility to decide how to pay for their accommodation. If within those 28 days they make a decision to pay a RAD, they have 6 months to pay. If they make a decision after those 28 days to pay a RAD, it is due as agreed between the provider and the resident. A resident must pay a DAP until the RAD is paid.
Q: How often do we need to recalculate the RAD if someone is drawing down DAPs from it?
A: Service providers and residents will need to agree how often they will recalculate as part of their accommodation agreement. The service provider cannot request a resident pay a DAP more than one month in advance.
1 July 2021
If the service provider has asked you to pay some or all of the cost of your accommodation, you will need to make an Accommodation Agreement with the home. This can be included as part of your Resident Agreement or it may be a separate document.
What does an Accommodation Agreement cover?
Your agreement should include:
- the accommodation price that you have agreed to pay the home
- details on the three payment options you can choose from to pay the accommodation price:
- the lump-sum amount (Lump sum deposits operate like an interest free loan to residential aged care providers, accruing no interest income for the resident during their time in care. When the resident departs care, the lump sum deposit begins to attract interest, providing a benefit to the resident or their estate whilst the lump sum deposit is still held by the provider, and care services are no longer delivered). https://agedcare.health.gov.au/sites/g/files/net1426/f/documents/07_2017/report_of_the_base_interest_rate_project.pdf
- the rental-type payment amount
- combined payment amounts, such as 50% payment by lump-sum and 50% rental-type payment amount
- other conditions of your accommodation payment and, if applicable, the refund amount of your lump sum balance if you leave or die
- any Extra Service costs for higher standard accommodation, meals and services, which the home can provide at additional cost
- the specific accommodation you will be provided with
- any services that your accommodation payment entitles you to receive
- the conditions relating to moving rooms
- NOW is the time for that conversation about what to do if you have a complaint e.g. you have been asked to move from a shared room to a private room.
What are ‘fixed’ costs?
- Care costs that are not tailored to individual resident needs.
- Care costs that are not affected by changes in the needs of individual residents:
- Direct – eg, night staffing, dining room supervision
- Indirect – eg, clinical educators, care co-ordinators, quality managers, infection control, remote salary loadings, staff leave.
- May vary based on location, size, specialisation of facility
- Actual proportions of fixed and variable cost will come from resource utilisation study
and that one-off Adjustment payment
- One–off initial payment
- Time-limited costs involved with residents transitioning into care, eg:
- Time spent getting to know the resident and their family
- Individualised care planning
- Behaviour management
- Health care assessments
- Facilitating health care arising from assessments:
- Pain control, dental care, palliative care etc
- Developing an advanced care directive in partnership with the resident and their family
If you choose an extra-service aged care home, then you must have an extra-service agreement between you and your aged care provider. The agreement should specify what the home will provide, how much it will cost, how often the fees can be increased and by how much.
This extra-service agreement will be in addition to your normal resident agreement.
Additional fees for specified care and services:
You are looking particularly under Version history amendments (page 4), and then at Attachment A which deals with:
- Item 1.1 Administration
- Item 1.2 Maintenance of buildings and grounds
- Item 1.3 Accommodation
- Item 1.4 Furnishings
- Item 1.5 Bedding
- Item 1.6 Cleaning services, goods and facilities
- Item 1.7 Waste disposal
- Item 1.8 General laundry
- Item 1.9 Toiletry goods
- Item 1.10 Meals and refreshments
- Item 1.11 Care recipient social activities
- Item 1.12 Emergency assistance
Additional reading:
http://www.agedcarecrisis.com/resources/nursing-home-checklist#care-and-services-what-s-included-extra-charges
Charging for residential aged care services Residents pay fees to help with the cost of their care, if they can afford it. We changed the fee arrangements on 1 July 2014, but the old arrangements still apply to people who entered care before that date.
- Fees for people entering residential aged care from 1 July 2014
- Find out about the fees you can charge people if they started residential aged care from 1 July 2014. Fees include the basic daily fee, the means-tested care fee and fees for additional services.
Copy of Accommodation Bond Agreement
Within seven days after an accommodation agreement is entered into, approved providers must notify the care recipient, in writing, that the approved provider will give the care recipient, within 7 days of a request by the care recipient, the information and documents set out in section 57 of the Fees and Payments Principles which include:
- a summary of the permitted uses that refundable deposits and accommodation bonds have been used for in the previous financial year,
- if refundable deposits and accommodation bonds have been invested in financial products other than through an authorised deposit-taking institution (ADI), a statement explaining the approved provider's investment objectives and the asset classes they may invest in,
- information about whether the approved provider has complied with the prudential requirements and permitted uses for refundable deposits and accommodation bonds,
- a copy of the independent audit opinion of the Annual Prudential Compliance Statement (APCS) from the previous financial year,
- information about the number of refundable deposit balances and accommodation bond balances that were not refunded in accordance with the Act or, for entry contributions, a formal agreement,
- the approved provider's most recent audited accounts or, if the service is part of a broader organisation, the statement relating to the aged care component, and
- a copy of the resident's entry in the refundable deposit register, current at the time of the request.
For further detail on the information that must be provided on request (see section 57(1)-(3), Fees and Payments Principles).
Act reference: Fees and Payments Principles 2014 (No. 2) section 57
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The new Aged Care Commissioner says that most people who have cause to make a complaint don’t. This is particularly in areas such as health, disability and aged care services where there are high stakes such as ongoing care needs and a dependence on the service.
"When we receive information, our first step is to assess any risk associated with the issues being raised. If a complaints officer considers the issues raise significant or major risk, the matter is quickly escalated to a manager whose main consideration at this point is to mitigate risk to the care recipient and/or any other care recipients. The manager may contact a service/approved provider and seek an immediate response to the concern(s) raised. If urgent action is needed the Commissioner will refer the matter immediately to the Quality Agency. The Commissioner may also refer the matter to other organisations and/or fast track the issue(s) straight to a formal resolution process for detailed consideration and where a site visit can be conducted. The Commissioner’s clinical advice unit may be asked to provide a view on the seriousness of clinical issues and whether urgent action is needed."
“That is understandable because people are vulnerable, sometimes they’re unwell or they might be frail. Quite often it is about an ongoing relationship. It can be too hard or they don’t want to make a fuss.”
Some people are scared to speak up, or worry about the implications if they raise a concern.
“At any stage my staff can do site visits, unannounced. That’s one of the ways we sometimes deal with anonymous issues around things like cleanliness, or people being showered at a terrible time of the night. We don’t just rely on the information we get from the parties, we can and do have a look for ourselves.”
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Accommodation prices approved by the Aged Care Pricing Commissioner
Q: Do accommodation prices approved by the Aged Care Pricing Commissioner remain valid if the service transfers ownership?
A: Yes. If the Aged Care Pricing Commissioner has approved accommodation prices above a refundable deposit of $550,000 for a service, and the ownership of that service transfers to another Approved Provider, the approval remains valid provided that the conditions attached to the approval continue to be met.
An approval ceases to have effect if there is a change in the location at which residential care is provided through the service.
Q: Can accommodation prices approved by the Aged Care Pricing Commissioner be indexed?
A: Yes. Under section 29 of the Fees and Payments Principles 2014 (No. 2), providers are permitted to index an accommodation price approved by the Aged Care Pricing Commissioner. The approved amount may be indexed annually using the following formula:
Indexed amount = Approved amount x (Most recent index number / Previous index number)
The index number refers to the All Groups Consumer Price Index (CPI) number, which is published on the Australian Bureau of Statistics website. The relevant CPI number is the rate applicable for the quarter ending before the first day of the approval year.
For example:
On 1 July 2014, a service receives approval from the Aged Care Pricing Commissioner to charge an accommodation price of $700,000 for a room. On 1 July 2015, the provider can apply indexation to the approved price. The most recent index number would be the CPI rate for the quarter ending 30 June 2015. The previous index number is the CPI rate for the quarter ending 30 June 2014.
The indexed amount is generally rounded to the nearest whole dollar. However, in cases where the indexed amount to be rounded is 50 cents, the amount is rounded down.
Q: Does indexation apply to accommodation prices agreed with existing residents?
A: No. Indexation cannot be applied to prices agreed with existing residents who have a current accommodation agreement in place. The indexed amount only applies in relation to a new resident who has not entered into an accommodation agreement or care prior to the day that the approved amount is indexed.
Q: Are accommodation prices approved by the Aged Care Pricing Commissioner automatically updated for indexation on the My Aged Care website?
A: No. Prices published on My Aged Care are not automatically indexed; providers are responsible for updating the published prices.
Q: If I publish an accommodation price that is less than the approved amount, which amount do I index?
A: It is the approved amount that is indexed, regardless of the accommodation price that is actually published. This is then the maximum amount that could be published.
Q: Can a resident who entered care on or after 1 July 2014 be asked to pay a higher accommodation price if they want to move to a new room with a higher published price?
A: If a resident (who entered care on or after 1 July 2014) moves rooms within a facility, they may be charged an accommodation price that is higher or lower than the amount that they were paying, as long as the move is voluntary. The accommodation agreement must be varied to specify the new price and new room or part of room.
The new agreed price for the new room cannot be more than the maximum price that was published for that (new) room on the day that the agreement was varied. It is the maximum permissible interest rate (MPIR) current on the day that the accommodation agreement is varied that must be used to calculate the equivalence between the refundable deposit and daily payment amounts for the new room. If the accommodation payment for the new room is higher than the amount previously being paid, the resident may choose to pay the additional amount by daily payments, by a refundable deposit, or by a combination of both.
If the accommodation payment for the new room is lower than the amount previously being paid, and the resident has paid a refundable deposit, the provider must refund any excess balance to the resident.
Q: Can a resident be asked to pay a higher accommodation price if the move is not voluntary?
A: No. If a resident (who entered care on or after 1 July 2014) moves rooms, but the move is not voluntary, they cannot be asked to pay a higher accommodation payment than they were previously paying, even if the published price for the new room is higher.
If the price for the room (that was published on the day that the notice to move was given to the resident) is lower than the amount the resident was previously paying, then they cannot be asked to pay more than that published amount. It is the maximum permissible interest rate (MPIR) applicable on the day that the notice to move is given to the resident that must be used to calculate the equivalence between the refundable deposit and daily payment amounts for the new room.
A move is not voluntary if:
- the move is necessary on genuine medical grounds as assessed by:
- an aged care assessment team; or
- at least 2 medical or other health practitioners who meet the criteria below; or
- the place occupied by the person becomes an extra service place and the person elects not to pay the extra service fee; or
- the move is necessary to carry out repairs or improvements to the premises of the service.
The criteria for the medical or other health practitioners for (a)(ii) above are:
- one practitioner must be independent of the approved provider and the residential care service, and must be chosen by the person; and
- both practitioners must be competent to assess the aged care needs of the person.
https://agedcare.health.gov.au/aged-care-reform/residential-care-and-home-care-frequently-asked-questions
16 July 2019
When do I have to sign the Accommodation Agreement?
You still have 28 days after moving into your aged care home to decide how you want to pay your accommodation costs and sign your Accommodation Agreement.
If you like, you can ask someone else to negotiate your care fees with the aged care provider on your behalf. This is something you may wish to consider when preparing to move.
What if I need help understanding the agreements?
Since the Resident Agreement and Accommodation Agreement are legally binding documents, it is important you understand everything in the document before you sign it. If you have any questions, you should ask your new aged care home. It is their responsibility to make sure the agreements offered to you are clear.
If you like, you can ask your family, friends, carer or a legal practitioner to help you understand the terms of your agreements. The proposed agreements may not automatically include all the things that you think are important, so it is a good idea to check:
Need more help? Finding a financial planner:
Financial planners may be able to help with retirement planning, wealth management, savings planning, superannuation, banking and portfolio administration. They may also give advice on managed funds, and other financial products available in the marketplace.
Selecting the right financial planner for your situation is essential. You should choose a licensed financial planner who can provide the services you need. Your financial planner should also be able to provide you with a Financial Services Guide.
You can check whether a company or a financial planner is licensed by searching the Aged Care
https://www.moneysmart.gov.au/life-events-and-you/over-55s/aged-care on the Australian Securities and Investments Commission website.
You can also search for financial planners in your area on the Financial Planning Association of Australia website. This website provides the contact details for all licensed financial planners in the country.
MoneySmart:
The Australian Securities and Investments Commission also runs the MoneySmart website which helps people make smart choices about their personal finances. MoneySmart has lots of tools and information to help people with decisions about issues such as retirement planning, aged care accommodation and financial products such as reverse mortgages, see:
- retirement income planning (information and calculator)
- reverse mortgages (information and calculator)
- over 55's and your home
- over 55's and your health
- how to complain.
If you are having language difficulties because the agreements are not written in your preferred language, you can contact the Australian Government Translating and Interpreting Service (TIS) on 131 450. TIS covers more than 100 languages and is available 24 hours a day, 7 days a week, for the cost of a local call.
Wanting Financial advice?
You may want to consult with a financial adviser about your finances. There are various Click here for Government services and resources that can help you obtain appropriate financial advice. It’s a good idea to do some research to see what options work best for you. You can also use Centrelink's free Financial Information Service on 132 300.
Facing Financial Hardship?
If you believe you would face financial hardship in paying the required fees and payments, you can ask to be considered for financial hardship assistance. Each case is considered on an individual basis.
Depending on your personal situation, you may apply for financial assistance with:
- your basic daily fees and means-tested care fees and/or
- your accommodation payment
Assessment of financial hardship assistance claims
To determine if your aged care costs would cause you financial hardship, the Department of Human Services (DHS) will consider your:
- assets
- income, and
- verified expenses
You can apply for financial hardship assistance for your permanent residential aged care fees and charges, please use a Claim for Financial hardship assistance – Residential Aged Care form (SA461).
https://www.humanservices.gov.au/individuals/forms/sa461
10 July 2019
What are unrealisable assets?
If you have more than $34,206.90 in assets, you can apply for an asset to be declared as unrealisable. An asset is considered unrealisable if you cannot sell it or borrow against it.
More information on unrealisable assets will be available when you apply for financial hardship assistance through the Department of Human Services.
The following assets may be considered as unrealisable:
- a house that has been on the market for 6 months or more
- jointly owned property
- gifting - the decision to gift was made when the person was incapacitated or was made by a Power of Attorney
- frozen assets.
- rented properties
- private trusts and private companies.
If you are applying for financial hardship assistance for Home Care and Residential Care Respite Form you need Form SA462.
https://www.humanservices.gov.au/individuals/forms/sa462
10 July 2019
or for more information on fees and charges or financial assistance, call My Aged Care on 1800 200 422 or visit myagedcare.gov.au
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What If I am not able to sign the agreements?
If you understand your agreement and want to sign it but are physically unable to, you can ask someone with the legal authority to sign on your behalf, such as someone who holds power of attorney for you.
Rights and Responsibilities
No matter which aged care home you move into, your rights and responsibilities will be the same as those of every other resident. To make sure your rights and responsibilities are protected, there is legislation that all aged care homes funded by the Australian Government must follow. The Charger of Residents' Rights and Responsibilities will be displayed in your aged care home, or you can ask your home for a copy when they offer you your Resident Agreement.
For additional information, go to www.myagedcare.gov.au This information is for your general information and use only, and is not intended for any other purpose.
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Part 4--Accommodation payments and accommodation contributions
- in addition you may need help in understanding your Resident Agreement
Division 1--Accommodation agreements
excerpt from:
http://www.comlaw.gov.au/Details/F2014L00829/Html/Text#_Toc391026107
for your further information, it is best to read the relevant sections yourself. Above is the link.
14 Purpose of this Division
For Division 52F of the Act, this Division specifies:
(a) other information that an approved provider of a residential care service or an eligible flexible care service must give a person before the person enters the service; and
(b) matters that the Secretary must have regard to in considering whether to extend the period within which an approved provider of a residential care service or an eligible flexible care service must enter into an accommodation agreement with a person; and
(c) other matters that must be set out in an accommodation agreement.
15 Information to be given before person enters residential care service or eligible flexible care service
For subparagraph 52F‑1(1)(a)(ii) of the Act, the approved provider of a residential care service or an eligible flexible care service must give the following information, in writing, to a person before the person enters the service:
(a) a statement that, if the person pays part or all of his or her accommodation payment or accommodation contribution by refundable deposit, the approved provider will, within 7 days of receiving a request from the person, give the person the information and documents referred to in subsection 57(1);
(b) information about the interest rate payable if there is a delay in the payment of daily accommodation payments or daily accommodation contributions;
(c) the method and timing by which any overpaid accommodation payments or accommodation contributions will be refunded to the person;
(d) information about refund arrangements for refundable accommodation deposits and refundable accommodation contributions;
(e) the prudential arrangements applying to refundable accommodation deposits and refundable accommodation contributions.
16 Extension of time for entering into accommodation agreement
For subsection 52F‑2(2) of the Act, in considering the period by which the time for entering into an accommodation agreement is to be extended, the Secretary may have regard to any matter that the Secretary considers relevant.
Additional matters in relation to voluntary moves within the service
(3) The accommodation agreement must set out that, if the person proposes to move to a new room, or to a new part of a room, in the service, and the move is voluntary:
(a) the accommodation agreement must be varied, before the move occurs, to specify the new room or the new part of the room; and
(b) the day on which the agreement is varied will become the price agreement day for the person; and
(c) the person may be charged an accommodation payment amount, after the move, that is higher or lower than the accommodation payment amount the person is paying before the move, but the person must not be charged an accommodation payment amount that is higher than the maximum accommodation payment amount that was made publicly available by the approved provider under section 19 for the person’s new price agreement day and the new room or the new part of the room; and
(d) if the person is to be charged a higher accommodation payment amount for the new room or the new part of the room—the person may choose to pay the additional accommodation payment amount by:
(i) daily payments; or
(ii) refundable deposit; or
(iii) a combination of refundable deposit and daily payments.
Additional matters in relation to non‑voluntary moves within the service
(4) The accommodation agreement must set out that, if the person is to be moved to a new room, or to a new part of a room, in the service for less than 28 days, and the move is not voluntary:
(a) the approved provider must, before the move occurs, notify the person, in writing, of the new room or the new part of the room; and
(b) there will be no change to the person’s price agreement day; and
(c) the person will continue to be charged the same accommodation payment amount that the person is paying before the move.
(5) The accommodation agreement must set out that, if the person is to be moved to a new room, or to a new part of a room, in the service for 28 days or longer, and the move is not voluntary:
(a) the approved provider must, before the move occurs, notify the person, in writing, of the new room or the new part of the room; and
(b) the day on which the notice is given will become the price agreement day for the person; and
(c) the person must not be charged:
(i) an accommodation payment amount that is higher than the accommodation payment amount the person is paying before the move; or
(ii) if the maximum accommodation payment amount (the provider’s published maximum accommodation payment amount) that was made publicly available by the approved provider under section 19 for the person’s new price agreement day and the new room, or the new part of the room, is lower than the amount the person is paying before the move—an accommodation payment amount that is higher than the provider’s published maximum accommodation payment amount.
(6) For subsections (4) and (5), a move by a person to a new room, or to a new part of a room, in a residential care service or an eligible flexible care service is not voluntary if:
(a) the move is necessary on genuine medical grounds as assessed by:
(i) an aged care assessment team; or
(ii) at least 2 medical or other health practitioners who meet the criteria mentioned in subsection (7); or
(b) the place occupied by the person becomes an extra service place and the person elects not to pay the extra service fee; or
(c) the move is necessary to carry out repairs or improvements to the premises of the service.
(7) For subparagraph (6)(a)(ii), the criteria are:
(a) one practitioner must be independent of the approved provider and the residential care service or eligible flexible care service, and must be chosen by the person; and
(b) both practitioners must be competent to assess the aged care needs of the person.
Legislated Review of Aged Care 2017
MOVING TOWARDS A CONSUMER DEMAND-DRIVEN SYSTEM:
There is a broad consensus shared by government and sector stakeholders that aged care requires further reform to become a more consumer-centred system. This includes orienting care and the supply of different care types around the demands of consumers, and giving consumers greater choice and control. This objective is evident in the work of advisory bodies in the sector: the Aged Care Financing Authority, the Aged Care Sector Committee, and the National Aged Care Alliance.
There are four key conditions that must be met before one of the main steps in creating a demand-driven system—removing regulatory controls to uncap supply—can be realised.
Those are:
• Government needs an accurate understanding of the underlying demand for aged care services.
• Consumers must make equitable and sufficient contributions to the costs of their care, without those contributions being so high that they create a barrier to accessing care.
• There must be a robust system for assessing eligibility for government-funded aged care services.
• Government policy needs to ensure equitable supply of services across different population groups, and in settings where there is limited choice or competition, such as remote locations.
Many of the recommendations of this Review are steps towards meeting these four conditions.
ANNOUNCEMENTS
ComLaw to become the Federal Register of Legislation
Legislative changes, which commence on 5 March, will establish a single Federal Register of Legislation which combines the content of ComLaw, the Federal Register of Legislative Instruments (FRLI) and the Acts database into a single register.
The address for this website will change to https://www.legislation.gov.au but any bookmarks or links you may have to the current ComLaw website will be redirected automatically.
For those additional questions: Have a look at "Residential Care and Home Care Frequently Asked Questions".
16 July 2019
Q: Can a consumer roll over their accommodation payment when they move facilities?
A: No. Under the Aged Care Act 1997, the accommodation payment must be refunded ‘if the care recipient is to enter another service to receive residential care’.
Prior to entry to a new service, a resident subject to the 1 July 2014 fee arrangements will need to negotiate and agree an accommodation price with their new provider. The new provider cannot charge an accommodation price that is greater than their advertised price.
Unlike the arrangements in place in respect of bonds paid before 1 July 2014, where residents who paid an accommodation bond could have the bond balance transferred to the second aged care home, accommodation payments are not ‘automatically’ rolled over where a resident moves to a new service.
Q: Does a resident’s DAP need to be re-calculated each time the maximum permissible interest rate (MPIR) changes?
A: No. The MPIR used to work out the equivalence between a refundable deposit and daily payment amounts for a resident is that which is current on the day the resident agreed an accommodation payment with the aged care home. The same MPIR continues to apply unless the person subsequently moves rooms within the aged care home.
Q: What can be deducted from a RAD?
A: If a resident has paid a refundable deposit, the provider must deduct DAPs at the resident’s request. Other amounts – such as care fees or the costs of additional services – may be deducted, if agreed between the resident and the provider. This must be set out in writing.
Q: Can a resident agree to an accommodation price that is greater than their net assets?
A: Yes. The new accommodation payments arrangements give residents and providers the flexibility to negotiate an accommodation price that is greater than a resident’s net assets. Residents can choose to pay for their accommodation by a lump-sum refundable deposit, rental-style daily payments, or a combination of both.
The combination method allows residents to pay a partial refundable deposit, ensuring that they are left with the minimum permissible asset level (currently $47,500), and then pay the balance of the agreed price by daily payments. Residents can elect to have the daily payments deducted from the refundable deposit.
Q: How long does a resident have to pay a RAD?
A: A resident has 28 days from the date they enter the facility to decide how to pay for their accommodation. If within those 28 days they make a decision to pay a RAD, they have 6 months to pay. If they make a decision after those 28 days to pay a RAD, it is due as agreed between the provider and the resident. A resident must pay a DAP until the RAD is paid.
Q: How often do we need to recalculate the RAD if someone is drawing down DAPs from it?
A: Service providers and residents will need to agree how often they will recalculate as part of their accommodation agreement. The service provider cannot request a resident pay a DAP more than one month in advance.
1 July 2021