Aged Care Placement Information Directory
Site Last Updated
8th December 2011
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accommodation Bonds
Law Institute of Victoria Submission
The following is an extract about a submission
which has been made by the Law Institute of Victoria (LIV) to amend the
Aged Care Act 1997 in relation to when an aged care operator does not enter
into a residential care agreement with a resident within 21 days after admissiom.
accommodation Bonds under the Aged Care Act 1997
9th January 2009
Summary: The Law Institute of Victoria (LIV) proposes the following:
* That extensive education be provided to the community regarding aged care
services and residents' rights and responsibilities when considering moving
into residential care with particular emphasis on financial arrangements
including accommodation bonds.
* That the Act be amended to require providers to recommend to prospective
residents (or their representatives) that they obtain independent legal
advice prior to agreeing to pay a bond.
* That the Act ensures adequate protections for residents in circumstances
where, even if aware of their rights, residents are unwilling to exercise
them, for example, the right to negotiate bond amounts. This could be due
to fear of being turned away from aged care accommodation in a situation
where Australia's population is rapidly ageing and there is an undersupply
of such accommodation.
* That providers be required under legislation to disclose all relevant
information regarding accommodation bonds, including the maximum amount
of bond a resident may be asked to pay and a resident's right to negotiate
their bond, to empower residents to make informed choices.
* That the Act clarifies contractual issues in relation to accommodation
bonds. In particular:
(a) Where no enforceable agreement (whether written or oral) is entered
into regarding payment of a bond prior to the resident's entry into residential
care, there is no liability for the resident to pay any bond. This point
should be made clear in the Act and followed by the Scheme; and
(b) That the Act be amended to provide that if an
"accommodation bond agreement" is not entered into before or within 21 days
after entry, there is no liability for the resident to pay any bond, that
is, that no bond is payable where the provider has failed to comply with
section 57-2(1)(e).
In situations where a common law contract existed, it is arguable that the
common law contract has been varied due to the provider's failure to fulfil
its statutory obligations and, therefore, there is no valid contract. In
that event, there would be no requirement for the resident to pay any bond.
* That the Act clarifies the consequences for providers who fail to comply
with other accommodation bond obligations under the Act.
Currently, the Department does not necessarily act upon failures by providers
to comply with these obligations or compel providers to pay refunds to residents.
On this basis, the LIV proposes an amendment to the Act that states that
if the provider does not comply with the bond rules, it is not permitted
to charge a bond.
* That the Act be amended to enable the Scheme to deal with minor non-compliance
issues by providers, for example, situations where there are no serious
consequences and which did not result from bad faith.
* That the Scheme determines financial disputes not only by reference to
whether the type and amount of the payment in question comes within the
scope of the Act, but also considers all facts relevant to the complaint
such as whether there was any contractual obligation to make the payment
in question or any misrepresentation.
* That interest rates a provider is permitted to charge a resident if the
bond is not paid in full on the day of entry be lowered to the equivalent
of the commercial rate.
* That the Act be amended so that where the net value of a resident's assets
when realised is less than their value or estimated value at the time of
entry, the provider is required to reduce the bond to an amount that would
leave the resident with at least the relevant minimum permissible asset
value.
Download the submission
(PDF, 250kb)
Queries regarding this submission should be directed to:
Contact: Tea Paris
Legal Policy & Practice
Law Institute of Victoria
Phone: (03) 9607 9489
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About Us 
Many thanks. It is a
outstanding result and I am more than happy to recommend your services as outstanding.
In fact I shall take the liberty to recommend you to my personal financial adviser
who has clients in similar situation.
Mr. W (Glen Iris) after successful negotiation of a bond (27 Nov 2009)