Accommodation bonds if you entered care before 1 July 2014
If you moved into an aged care home before 1 July 2014, you may have paid an accommodation bond to your aged care home provider.
An accommodation bond is an amount that you pay for your accommodation in an aged care home. You would have been asked to pay an accommodation bond when you moved into an aged care home and you had low-level care needs or when you moved into an extra-service place with high care needs.
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 (with any amounts taken out that you have agreed on) is returned to you or your estate when you leave the aged care home.
The accommodation bond amount
The amount of your accommodation bond is worked out based on your assessed assets when you first moved into an aged care home. Services Australia would not have advised the amount of accommodation bond that you could be asked to 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 $50,500 in assets (from 20 March 2020 to 19 September 2020).
Bond amounts can vary between residents in the same aged care home, as well as between homes because the bond is based on an individual's assessed assets.
When you agreed to your accommodation bond amount, there were a number of payment options you could have chosen. These are:
- a lump sum
- periodic (regular) payments (usually every fortnight or month), or
- a combination of lump sum and periodic (rental-style) payments.
If you agreed to pay a lump sum, you had up to six months after you moved into your 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 can be charged interest on the outstanding amount owing – as set out in your accommodation bond agreement. The Australian Government sets the maximum interest rate you can be charged, which is fixed at your date of entry to aged care.
If your assets go up or down after you move into a home, this does not affect the amount of your accommodation bond or the interest charged. Your assessed assets are fixed at the date you first entered an aged care home and won’t be reassessed unless you request this when you move to a new home and your care needs have ‘increased’.
Your aged care home may deduct monthly amounts from your bond for a maximum of five cumulative 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 before 1 July 2014, but move to a new home between 1 July 2019 and 30 June 2020 and are still under the old fee arrangements, the maximum monthly retention amounts are:
- For bonds under $22,920 - the maximum monthly retention amount is $191.00.
- For bonds over $44,280 - the maximum monthly retention amount is $369.00
The retention amount is based on a sliding scale for bonds between $22,920 and $44,280.
A full list of current rates is provided on the Schedule of Residential Fees and Charges for pre-1 July 2014.
Accommodation bond agreement
An accommodation bond agreement must include details including but not limited to:
- the agreed accommodation bond amount
- how the bond will be paid (e.g. lump sum, periodic (rental-style) payment or a combination of these)
- the date 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 should have offered you an accommodation bond agreement at the time you first entered an aged care home.
If you transfer to a new aged care home and choose to keep your current fee arrangements, your new aged care home provider must offer you a new accommodation bond agreement that includes these details within 21 days after you move into the new home.
The accommodation bond agreement may be included as part of your resident agreement or it may be a separate document.
When is the refund paid?
Moving aged care homes
If you move to another aged care home after 1 July 2014, you will have the option to:
- be assessed under the post-1 July fee arrangements or
- stay with your current fee arrangement.
If you move from one aged care home to another with a break of no more than 28 days, and choose to keep your current fee arrangements, you cannot be asked to pay an accommodation bond that is more 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 time frames:
- if you let your aged care home know more than 14 days in advance of you leaving, then your bond balance must be refunded to you on the day you leave.
- if you give 14 days’ notice (or less) of leaving, then the bond balance must be repaid within 14 days after the day you give notice.
- if you don’t let your aged care home know in advance that you are leaving, the bond balance must be refunded within 14 days after the day of you leaving.
If your bond balance is not refunded to you within the time frames above, the aged care home provider must pay you interest. Late payments of bond refunds that are not agreed to can be reported to the Aged Care Quality and Safety Commission.
After a resident dies
If a resident dies, the aged care home must refund the accommodation bond balance (less any allowable amounts that have been taken out over the care period) within 14 days of receiving either:
- evidence of probate of the resident’s Will (the official proving of a Will) or
- letters of administration (authority to manage the estate of someone who has died without making a will).
The provider may refund the bond balance without evidence of probate or letters of administration, if they are confident that the correct legal beneficiary has been identified, but they do have the right to ask to see these documents. This protects the aged care provider and the resident’s estate by ensuring the resident’s wishes are followed by identifying who is entitled to receive the refund.
If a resident’s aged care provider becomes bankrupt or insolvent and cannot refund bond balances, the Australian Government guarantees to repay an amount that is the same as the bond balance amount, (including any interest due since the resident left care), to the resident or their estate. The Guarantee Scheme covers all residents of Australian Government-subsidised aged care services who have paid an accommodation bond.
Post-1 July accommodation fee arrangements
Accommodation charges and accommodation bonds have been replaced by accommodation contributions and accommodation payments for people that enter care after 1 July 2014 or opt in when they move. Read more about the current fee arrangements on the aged care homes costs page.
How to make a complaint
If you have any concerns about accommodation bonds, there are two ways you can make a complaint:
- speak to the manager at your aged care home about your concerns
- if you are not comfortable raising your concerns or cannot resolve your concerns with your aged care home provider, you can contact the Aged Care Quality and Safety Commission.
Read more about how to make a complaint.