If you entered an aged care home before 1 July 2014, your home may have asked you to pay an accommodation bond.
An accommodation bond is an amount that you pay towards your accommodation in an aged care home. You would have been asked to pay an accommodation bond when you entered low-level care or when you entered an extra-service place.
An accommodation bond works like an interest-free loan to an aged care home. Any income earned from the bond is used by the aged care home to improve accommodation and services.
You can only be charged an accommodation bond for an aged care home that is certified as meeting minimum building and care standards.
The bond (minus retention amounts) is returned to you or your estate when you leave aged care.
How was my accommodation bond worked out?
Your accommodation bond is determined when you first enter a home. There is no fixed amount that you should pay. The amount you pay is agreed between you and the aged care home.
However, you cannot be asked to pay an accommodation bond that will leave you with less than $45,500 in assets (from 20 September 2014 to 19 March 2014).
Bond amounts can vary between residents in the same aged care home, as well as between homes, even if they are close to each other.
When you agreed to your accommodation bond amount, there were a number of payment methods you could have chosen. These were:
- as a lump sum
- as periodic payments usually made every fortnight or every month
- as a combination of lump sum and periodic payments.
If you agreed to pay a lump sum, you had up to six months after you moved into an aged care home to make the payment. However, if you didn’t pay your bond in full on the day you moved into the aged care home, you would have been charged interest on the outstanding amount owing – as set out in your bond agreement. The Australian Government sets the maximum interest rate you can be charged, which is set at your date of entry to the aged care home.
An increase or a decrease in your assets after you enter care does not affect the amount of your accommodation bond or the interest you were charged.
What are retention amounts?
Your aged care home may deduct monthly amounts from your bond for up to five years. These are called ‘retention amounts’. The Australian Government sets the maximum retention amount that you can be charged.
For residents who moved into an aged care home between 1 July 2014 and 30 June 2015, the maximum monthly retention amounts are:
For bonds under $21,120.00
For bonds over $40,860.00
The retention amount is based on a sliding scale for bonds between $21,120 and $40,860.
What is a bond agreement?
The bond agreement must include certain details such as:
- the agreed accommodation bond amount
- whether the bond will be paid by lump sum, periodic payment or a combination of the two
- when the bond is due to be paid
- the retention amount
- the interest rate you may be charged on any outstanding bond amount.
Your aged care home must offer you an agreement that includes these details within 21 days after you move into the home. A bond agreement may be included as part of your Resident Agreement or it may be a separate document.
What happens to my bond if I move to another home?
If you transfer to another aged care home after 1 July 2014, you will have the option of being assessed under the new fee arrangements
or staying with your current fee arrangement.
If you stay with your current arrangement and move from one aged care home to another with a break of no more than 28 days, you cannot be asked to pay an accommodation bond greater than the amount to be returned to you by the first home.
When you leave an aged care home, your bond balance must be refunded within the following specified timeframes:
If your bond balance is not repaid to you on the day that you leave, the aged care home is required to pay you interest
. Late payments of bond refunds that are not agreed to can be reported to the Aged Care Complaints Scheme.
What happens to my bond if I die?
If you die, then your aged care home must refund your accommodation bond balance within 14 days after the day on which they were shown the evidence of probate (the official proving of a will) or letters of administration (authority to administer the estate of someone who has died without making a will).
The home may choose to refund the bond balance to your estate without being shown evidence of probate or letters of administration; however, they do have the right to ask to see these documents first. This way they can make sure your wishes, as set out in your will, are followed. It also protects the aged care home by ensuring that they can identify who is entitled to receive the refund.
Is my bond balance refund guaranteed?
The Australian Government guarantees the repayment of your bond balance if the aged care home becomes bankrupt or insolvent and is unable to refund bond balances.
This means that you can be sure that your bond balance (including any interest that has accrued on the bond balance) will be refunded to you or your estate.
What are the new fee arrangements?