The rights and obligations of residents and providers are essentially the same for high and low care. They differ in relation to the type of accommodation payment (i.e. accommodation bond or accommodation charge) that may be payable by residents, and some of the services and goods that the provider must provide.
To be eligible to receive Australian Government-subsidised residential aged care (permanent or respite) a person must make an application to have their care needs assessed by an Aged Care Assessment Service (ACAS) (also known as an Aged Care Assessment Team (ACAT)) and be approved by the ACAS for that type of care. To be approved for residential care the person must have physical, medical, social or psychological needs requiring the provision of care that cannot be met more appropriately through non-residential services (Part 2.3 AC Act; Approval of Care Recipients Principles 1997 ("Approval of Care Recipients Principles")).
The ACAS must notify the applicant in writing of the decision to approve or not approve the application. If the person is approved for residential care, the notification will include whether the person has been approved to receive high level care or low level care. The applicant must also be informed of their appeal rights.
A number of outcomes of an application, such as rejection of the application or limitations on an approval, are reviewable decisions under Part 6.1 of the AC Act. In practice, where a person is dissatisfied with an outcome, they should first approach the ACAS again. (For further information see the Aged Care Assessment and Approval Guidelines (September 2006) available on the Department's website at www.health.gov.au, or contact the Department's Aged Care Information Line (tel: 1800 500 853).)
Before deciding to enter residential care, a prospective resident should visit a range of services and talk to both staff and residents about the quality of life, care and accommodation provided. For a person entering low level care it may be important to know if a service offers "ageing in place" if their care needs increase to a high level. Agency reports (accessible from the Agency's website at www.accreditation.org.au) will also give an indication of the standard of care and accommodation provided by a service as at the date of the report.
Essentially, a residential care service will be certified if the standard of care and the buildings and equipment used to provide the care meet certain requirements (Part 2.6 AC Act and the Certification Principles 1997). Only certified services may charge accommodation bonds or accommodation charges (see: "Fees, charges and bonds", below). The Aged Care Information Line can tell consumers whether a service is certified (tel: 1800 500 853).
Prospective residents need to complete an Application for Respite Care or Permanent Entry to an Aged Care Home and send signed copies of it to the residential care services in which they are interested. The Application form and an accompanying booklet called 5 Steps to Entry into Residential Aged Care can be obtained from the ACAS when a person is being assessed, from the Aged Care Information Line (tel: 1800 500 853), or from the Department’s website at www.health.gov.au.
Centrelink or the Department of Veterans' Affairs (DVA) (in the case of people receiving a means-tested pension from DVA) assesses the value of new or prospective residents' assets on behalf of the Department, even if the person is not a pensioner.
Having an assets assessment is not compulsory. However, a person with assets below the relevant threshold will not be eligible for government assistance with their accommodation costs unless they have their assets assessed by Centrelink or DVA. In addition, because the maximum amount of accommodation payment (accommodation bond or accommodation charge) that a resident may be asked to pay is based on the value of their assessable assets, if a person does not have an assets assessment they may be asked to pay a higher accommodation payment than would otherwise be the case.
Wherever possible, assets assessments take place before entry to a service. A Permanent Residential Aged Care – Request for an Assets Assessment form and an accompanying Information Booklet can be obtained from the ACAS, or from the Aged Care Information Line (tel: 1800 500 853) or from the Department’s website at www.health.gov.au. The form should be completed and sent to Centrelink or DVA (as appropriate). Applicants are given written notification of the assessed net value of their assets and advised whether they are eligible to be a "fully supported", "partially supported" or "non-supported" resident (see: "Supported residents", below).
The value of a person's assets for aged care purposes is the net value of all of the person's property, including property outside Australia. The net value of property is its gross value less debts, charges and encumbrances on the property. (For details on how to work out the value of a person's assets, see section 44-10 of the AC Act and Part 6 of the Residential Care Subsidy Principles).
Where a person is a homeowner, the value of the home will not be counted as an asset if at the time the person enters a residential care service the home is occupied by:
- the partner or a dependent child of the person; or
- a carer of the person, who at the time is eligible for an income support payment and who has lived in the home for the past two years; or
- a close relation of the person, who at the time is eligible for an income support payment and who has lived in the home for the past five years (s.44-10(2) AC Act).
The value of the assets of a person who is a member of a couple is taken to be 50% of the sum of the value of the person's assets and the value of their partner's assets (s.44-10(3) AC Act). Members of same-sex couples are treated in the same way as members of opposite-sex couples for the purpose of assets assessments.
If a person owns an asset jointly or in common with one or more other people, only the value of that person's interest in the asset is taken into account (s.44-10(4) AC Act).
The Australian Government provides financial assistance for residents who cannot fully meet their accommodation costs. This assistance is provided to supported residents through the payment of an accommodation supplement to the service in which they live.
A person is a "supported resident" if they enter a residential care service (other than on an "extra service" basis) as a permanent resident for the first time on or after 20 March 2008 and their assets at the time of entry are valued at or below a certain threshold ($102,544 as at 1 July 2011) (s.44-5B AC Act).
Fully supported resident: This is a resident whose assets are less than an indexed amount ($39,000 as at 1 July 2011). A fully supported resident cannot be asked to pay an accommodation payment.
Partially supported resident: This is a resident who has assets above this level but below the threshold for being a supported resident. A partially supported resident may be asked to pay a small accommodation payment.
Non-supported resident: This is a resident who has assets above the threshold for being a supported resident. A non-supported resident may be asked to pay an accommodation payment (see: "Accommodation bond" and "Accommodation charge", below).
Arrangements for residents who first entered permanent care on or before 19 March 2008 remain in place. Such a person may be a "concessional resident" or an "assisted resident" depending primarily on the value of their assets when they entered care. A concessional resident cannot be asked to pay an accommodation payment and an assisted resident may be asked to pay a small accommodation payment.
When a resident enters a residential care service, the provider must inform the resident (or their representative) about their rights and responsibilities under the Charter of Residents' Rights and Responsibilities and under the User Rights Principles.
If the resident has not entered into a resident agreement (see: "Agreements", below), the provider must also inform them about the matters mentioned in section 59-1(1)(b)–(h) of the AC Act. The provider must assist the resident, or their representative, to understand the information (s.23.14 User Rights Principles).
If asked, the provider must also give a resident (or their representative) a copy of the most recent statement of the service's audited accounts, or if the service is operated as part of a broader organisation, the most recent statement of the audited accounts of the organisation's aged care component (ss.23.17, 23.42 & 23.43 User Rights Principles).
The AC Act regulates the payments that a provider may ask residents to pay for the care and accommodation that the provider is required to provide. These payments comprise basic daily fees, income-tested daily fees, extra service amounts and accommodation payments (accommodation bonds and accommodation charges). The Australian Government sets the maximum amount of each type of payment that a provider may ask certain residents to pay. Up to these maximums, the amount a resident pays is a matter for negotiation between the resident (or their representative) and the provider (see: Divs. 35, 44, 57, 57A & 58 AC Act; Extra Service Principles; Residential Care Subsidy Principles; and User Rights Principles).
An overview of the rules regarding the different payments is set out below. More information may be obtained from Elder Rights Advocacy (tel: 9602 3066 or 1800 700 600; www.era.asn.au), the Aged Care Information Line (tel: 1800 500 853), or the Department’s website at www.health.gov.au.
All permanent residents receiving low or high level residential care can be asked to pay a basic daily fee as a contribution towards the cost of their care and services such as meals, cleaning, laundry, heating and cooling. This amount is indexed upwards on 20 March and 20 September each year in line with increases in the age pension. (The DVA pays the basic daily fee for Australian ex-prisoners of war.)
There are four rates of basic daily fee as follows:
- Non-standard rate: applies to certain residents who entered care prior to 20 March 2008, including pensioners who paid a bond above an indexed amount, and self-funded retirees.
- Protected rate: applies to certain residents who were in care on 19 September 2009, including part-pensioners with private income above the income threshold for protected residents, and self-funded retirees who entered care between 20 March 2008 and 19 September 2009.
- Phased rate: applies to certain residents who enter care from 20 September 2009, including part-pensioners with private income above the income threshold for phased residents, and self-funded retirees.
- Standard rate: this rate is 84% of the single basic age pension ($40.25 as at 1 July 2011) and applies to all residents who do not meet the criteria of any of the other rates, including all full pensioners, and part-pensioners with private income below a certain threshold.
For further information contact Centrelink (tel: 13 23 00), DVA (tel: 13 32 54) or the Aged Care Information Line (tel: 1800 500 853). Also see: Div. 58 AC Act.
Permanent residents who are part-pensioners or non-pensioners may also be asked to pay a daily income-tested fee.
The maximum amount of a resident's income-tested daily fee is the lesser of:
- five-twelfths of their assessable income above the relevant income-tested fee threshold. Different income-tested fee thresholds apply to residents according to the rate of basic daily fee applicable to them; or
- 135% of the single basic age pension; or
- the cost of their care (that is, the amount of basic subsidy and primary supplements paid by the Australian Government in respect of the resident).
A member of a couple is taken to have 50% of the total value of the couple's assessed income. Members of same-sex couples are treated in the same way as members of opposite-sex couples in relation to determining income-tested fees.
Income for aged care purposes is not the same as taxable income. Centrelink usually works out the income of pensioners and non-pensioners. However, DVA will assess the income of people receiving a service pension or an income support supplement from DVA.
For further information contact Centrelink (tel: 13 23 00), DVA (tel: 13 32 54) or the Aged Care Information Line (tel: 1800 500 853). Also see: Subdiv. 44-E & Div. 58 AC Act; Part 12 Residential Care Subsidy Principles; and Information Sheet No. 11 Income tested fees for residential care on the Department's website at www.health.gov.au.
Residents occupying an "extra service" place in a residential care service may be asked to pay an additional daily amount comprising an extra service fee approved by the Australian Government plus an amount equal to 25% of that fee. This total payment is called an "extra service amount". However, some services describe this total payment simply as an "extra service fee". The amount of the extra service fee varies between services (see: Divs. 35 & 58 AC Act; Part 6 Extra Service Principles).
Residents who enter a residential care service for respite care may be asked to pay the standard rate of basic daily fee. Income-tested daily fees and accommodation payments do not apply. A person occupying an extra service place for respite care may also be charged an extra service amount.
A respite resident may be asked to pay a respite booking fee which is a pre-payment of part of the total respite fee, but this cannot exceed the lesser of the fee for one week of respite care, or 25% of the total fee for the requested period of respite. The booking fee must be deducted from the total fee for the respite care.
Permanent residents entering low level care or an "extra service" place (for low or high level care) may be asked to pay an accommodation bond, depending on the value of their assets. A bond is like an interest free loan to the provider and it must only be used for a purpose permitted by the legislation (Subdiv. 57-EA AC Act)..
Division 57 of the AC Act and Part 4 of the User Rights Principles set out the rules about accommodation bonds.
The following residents cannot be asked to pay an accommodation bond:
- those who have assets worth less than 2.25 times the annual single age pension at the time of entry ($39,000 as at 1 July 2011);
- those about whom the Department has determined that paying an accommodation bond would cause financial hardship;
- respite care residents; and
- those entering high level care other than on an extra service basis (these residents may be asked to pay an accommodation charge) unless they have agreed to transfer a bond paid to another service (see: "Accommodation charge" and "Moving to another service", below).
A resident cannot be asked to pay an accommodation bond unless:
- the service is certified (s.57-2(1)(a) AC Act); and
- the resident and the provider enter into an "accommodation bond agreement" (see: "Agreements", below) before, or within 21 days after, the resident's entry to the service (ss.57-2(1)(e) & 57-9 AC Act; Part 4, Div. 5 User Rights Principles).
If a provider charges, or intends to charge an accommodation bond for a resident's entry to a service it must provide the resident (or their representative) with certain information before the resident enters the service. This information includes:
- the requirement for the resident to be left with assets of at least the relevant minimum value ($39,000 as at 1 July 2011) after paying the bond;
- the interest rate to be charged on amounts owed under the accommodation bond agreement, resident agreement or extra service agreement, and the capacity for these amounts and accrued interest on them to be deducted from the bond;
- the size of bonds charged;
- the retention amount of the bond;
- the interest rate on the bond if there is a delay in payment of the lump sum or the bond is paid wholly or partly by periodic payments;
- the periods when the retention amount and interest are charged;
- the three payment options;
- refund arrangements; and
- the prudential arrangements applying to the bond balance (s.57-2(1)(d) AC Act; Part 4, Div. 1 User Rights Principles).
The maximum amount of bond that a resident may be asked to pay is an amount that, after payment, would leave the resident with assets worth at least 2.25 times the annual single basic age pension ($39,000 as at 1 July 2011) (Subdiv. 57-D AC Act). Up to this maximum, the amount of the bond is a matter for negotiation between the resident (or their representative) and the provider.
The value of a person's assets is the net value of all of their relevant property (see: "Assets assessment and resident status", above).
If a resident chooses not to give a provider information about the value of their assets, then there is no limit to the size of the accommodation bond that may be negotiated with the provider, regardless of the actual value of the resident's assets (s.57–12(2) AC Act).
The Department may determine that a resident must not be charged an accommodation bond or must not be charged an accommodation bond of more than a specified maximum amount because such a payment would cause the person financial hardship (s.57-14 AC Act; Part 4, Div. 6 User Rights Principles).
A resident may choose to pay an accommodation bond by:
- lump sum; or
- periodic payments (usually fortnightly or monthly); or
- a combination of lump sum and periodic payments (s.57-17 AC Act).
Where an accommodation bond is paid by lump sum, the provider retains the income derived from investing the bond. The provider also has the right to deduct a certain amount (the "retention amount") from the lump sum for each month or part of a month that the resident lives in the service up to a maximum of five years. The retention amount depends on the resident's entry date and the amount of accommodation bond paid. It remains fixed for the duration of the resident's stay. For a resident who enters a service between 1 July 2010 and 30 June 2011 the maximum retention amount is, for an accommodation bond of:
- up to $19,740 – $164.50 per month;
- above $19,740 but less than $38,160 – work out 10% of the bond then divide the result by 12; and
- $38,160 or higher – $318.00 per month.
Where a bond is paid partly by a lump sum and partly by periodic payments, the maximum retention amount is based on the amount of the lump sum that the resident would have paid if they had not elected to pay some of the bond by periodic payments.
If a resident chooses to pay the bond as a lump sum, they cannot be required to pay the bond, including interest and retention amounts, during the first six months after entry (s.57-16 AC Act). However, if the bond is not paid in full on the entry day the resident may be required to pay the provider an amount representing interest the provider could have earned through investing the bond from the entry day until the bond is fully paid (as long as the accommodation bond agreement provides for this). This amount is calculated using a rate not higher than the "maximum permissible interest rate" (MPIR) for the quarter in which the entry day occurs (s.57-18(2) AC Act; ss.23.3(2) & 23.66(1) User Rights Principles). For example, if a resident entered care during the quarter beginning on 1 July 2011, the maximum interest rate would be 9.0%.
Where an accommodation bond is paid by periodic payments, the payments are calculated by:
- negotiating the amount of bond that would have been paid if it were being paid wholly as a lump sum (the "lump sum equivalent"); then
- calculating the interest that the provider could have earned on that lump sum for a year using a rate not higher than the MPIR; and
- adding the annual retention amount to the interest amount; and
- dividing the total by the number of periodic payments to be made in a year (e.g. divide by 12 for monthly payments) (s.57-17 AC Act; Part 4, Div. 8 User Rights Principles).
Providers are required to comply with the following three Prudential Standards.
- Liquidity Standard: Providers must maintain sufficient liquidity to ensure that they can refund bond balances as they fall due.
- Records Standard (Bond Register): Providers must maintain a bond register which includes information about all bonds and pre-1997 entry contributions that are held by the provider.
- Disclosure Standard: Providers must give the Department, residents, prospective residents and their representatives information on their compliance with the Liquidity and Records Standards and information on their financial standing (Subdiv. 57-B AC Act; Part 4, Div. 3 User Rights Principles).
A lump sum accommodation bond paid by a person for their entry to a residential care service is exempt from the pension assets test (see: Chapter 7*1 Social Security Payments).
A resident who pays an accommodation bond wholly or partly by periodic payments is able to rent out their former home without the value of the home or the rental income affecting their pension or their aged care fees.
A provider may deduct certain amounts from the bond before it is refunded, as long as the accommodation bond agreement provides for it. These are:
- retention amounts for each month or part of a month that the resident lives in the service up to a maximum of five years (three months of retention amounts may be deducted if the resident leaves within two months after entry);
- if the bond is paid after the entry day – an amount representing interest from the entry day until the bond is paid in full;
- if the bond is paid but the resident leaves within two months and the bond is refunded within three months after the entry day – an amount representing interest from the day the bond was refunded until the expiration of three months after the entry day; and
- any other amounts owed by the resident under an accommodation bond agreement, a resident agreement or an extra service agreement (Subdiv. 57-F AC Act; Part 4, Divs. 9–13 User Rights Principles).
The amount to be refunded is called the "accommodation bond balance". Providers are required to refund the accommodation bond balance in accordance with the following timeframes:
- if the resident dies – within 14 days after the day on which the provider is shown the probate of the resident's will or letters of administration of the resident's estate;
- if the resident is moving to another service and the resident:
- gives more than 14 days notice – the day the resident leaves the service;
- gives notice within 14 days of leaving – within 14 days of the resident giving notice;
- gives no notice before leaving – within 14 days after the resident leaves;
- if the resident leaves the service to return to their home or the home of a carer – within 14 days after the resident leaves (s.57-21 AC Act).
Providers are required to pay interest on the bond balance for each day after the resident leaves (or dies) until the day that the bond balance is refunded (s.57-21A AC Act; Part 4, Div. 14 User Rights Principles).
Two interest rates apply. A base interest rate (BIR) is payable for the period between the day after the day on which the resident leaves (or dies) and the date the bond balance is refunded or the date the legislated timeframe for refunding the bond balance expires, whichever is the earlier. If the bond balance has not been refunded within the required timeframe, a higher interest rate, the MPIR, applies for the period after the expiration of that timeframe until the bond balance is refunded (for definitions of MPIR and BIR, see: ss.23.3(2) & 23.79B User Rights Principles).
The BIR to be used in calculating interest is the BIR applicable on the day after the resident’s departure. The MPIR to be used is the MPIR applicable on the day after the resident's accommodation bond balance should have been refunded according to the legislated timeframes. If a change in the BIR or MPIR occurs during a period for which the BIR or MPIR is payable, the interest rate applied for the relevant periods is the BIR or MPIR that first applied to the refund. (For the quarter commencing on 1 July 2011, the BIR is 5% and the MPIR is 9.0%.)
If a provider is unable to refund a bond balance due to bankruptcy or insolvency, the Australian Government will pay the bond balance and the interest to the resident under the Accommodation Bond Guarantee Scheme (see: Aged Care (Bond Security) Act 2006 (Cth)).
If a resident agrees to pay a bond wholly or partly as a lump sum and leaves the service within two months after entry without paying the lump sum, the provider may charge an amount representing interest on the lump sum for three calendar months from the entry day (s.57-18(3) AC Act; s.23.66(3) User Rights Principles).
If instead, the resident leaves the service more than two months after entry without paying the lump sum, the provider may charge an amount representing interest on the lump sum for the period beginning on the first day of the month of entry and ending on the last day of the month the resident leaves (s.23.31 User Rights Principles).
The accommodation bond agreement needs to contain provisions allowing the provider to charge these amounts for a resident to be liable to pay them.
If a resident pays a bond to a residential care service and then moves to another service to receive low level care, or care on an extra service basis, within 28 days of leaving the first service, the maximum bond payable to the other service is the amount of the bond balance payable to the resident by the first service (s.57-13 AC Act). Only the balance of the five-year retention period (if any) carries over to the other service.
If a resident pays a bond and then moves to another service to receive high level care (other than on an extra service basis) within 28 days of leaving the first service, the resident may, with the agreement of the other service, either:
- have the bond balance refunded and (depending on the value of the resident's assets) pay a daily accommodation charge to the other service; or
- transfer the bond balance to the other service. Only the balance of the five-year retention period (if any) carries over to the other service (s.57-23 AC Act).
Permanent residents entering a service to receive high level care (other than on an extra service basis) may be asked to pay a daily accommodation charge depending on the value of their assets. Division 57A of the AC Act and Part 4A of the User Rights Principles set out the rules about accommodation charges.
The following residents cannot be asked to pay an accommodation charge:
- those who have assets worth less than 2.25 times the annual single age pension at the time of entry ($39,000 as at 1 July 2011);
- those about whom the Department has determined that paying an accommodation charge would cause financial hardship;
- respite care residents;
- those receiving low level care or care on an extra service basis (these residents may be asked to pay an accommodation bond, (see: "Accommodation bond", above);
- those who transfer an accommodation bond paid to another service; and
- those who were living in a nursing home on 30 September 1997, even if they move to another residential care service.
A resident cannot be asked to pay an accommodation charge unless:
- the service is certified (s.57A-2(1)(h) AC Act); and
- the resident and the provider enter into an "accommodation charge agreement" (see: "Agreements", below) before, or within 21 days after, the resident's entry to the service (ss.57A-2(1)(e) & 57A-3 AC Act; Part 4A, Div. 5 User Rights Principles).
If a provider charges an accommodation charge for a resident's entry to a service it must provide the resident (or their representative) with certain information before the resident enters the service. This information includes:
- the requirement for the resident to be left with assets of at least the relevant minimum value ($39,000 as at 1 July 2011) after paying the charge;
- the interest rate to be charged on amounts owed under the accommodation charge agreement or resident agreement; and
- the amount of the accommodation charge (s.57A-2(1)(d) AC Act; Part 4A, Div. 2 User Rights Principles).
The maximum amount of accommodation charge depends on factors such as:
- the date the resident first entered permanent residential care (whether for low or high level care);
- the date the resident enters the service that is asking them to pay a charge;
- the value of their assets at that time;
- whether the resident is a supported, non-supported or assisted resident (see: "Assets assessment and resident status", above); and
- whether the resident is a pensioner (Subdiv. 57A-C AC Act; Part 4A, Div. 6 User Rights Principles).
For residents who first enter permanent residential care on or after 20 March 2008 (or who re-enter care after having been discharged from permanent care for a continuous period of more than 28 days ending after 20 March 2008), the maximum daily accommodation charge is 1/2080th of their assets above 2.25 times the maximum annual single basic age pension ($39,000 as at 1 July 2011) subject to a capped amount ($30.55 per day as at 1 July 2011).
For residents who first entered permanent care between 1 July 2004 and 19 March 2008 (and who have not been discharged from permanent care for a continuous period of more than 28 days ending after 20 March 2008), the maximum daily accommodation charge is 1/1825th of their assets above 2.25 times the maximum annual single basic age pension ($39,000 as at 1 July 2011) subject to a capped amount ($20.19 per day as at 1 July 2011).
There are special arrangements for residents who first entered permanent residential care before 1 July 2004. The maximum daily accommodation charge for these residents is lower and the charge is only payable for a total of five years even if they move to another service.
Once determined, the amount of a resident's accommodation charge remains fixed for the duration of their stay in that service. If a resident moves from one service where they paid an accommodation charge to another service within 28 days of leaving the first service, they cannot be asked to pay a charge to the new service that is higher than the charge paid to the first service (s.57A-8A AC Act).
The Department may determine that a resident must not be charged an accommodation charge or must not be charged an accommodation charge of more than a specified maximum daily amount because such a payment would cause the resident financial hardship (s.57A-9 AC Act; Part 4A, Div. 7 User Rights Principles).
The Department calculates the maximum accommodation charge that a resident may be asked to pay based on the value of their assessable assets. The value of a person's assets is the net value of all of their relevant property and is assessed by Centrelink or DVA (see: "Assets assessment and resident status", above).
If a resident chooses not to obtain an assets assessment, they may be asked to pay the relevant accommodation charge cap amount, regardless of the actual value of their assets (s.57A-6(2) AC Act; Part 4A, Div. 6 User Rights Principles).
Further details regarding the calculation of accommodation charges can be obtained from the Aged Care Information Line (tel: 1800 500 853).
Residents who do not have the income or available assets to pay their daily fees or accommodation payments may apply to the Department for financial assistance. Each application is considered on its merits and is based on the resident's overall financial situation. For more information contact the Aged Care Information Line (tel: 1800 500 853) or go to the Department's website at www.health.gov.au).
There are four types of agreements relevant to residential care:
- a resident agreement (for permanent or respite care);
- an accommodation bond agreement;
- an accommodation charge agreement; and
- an extra service agreement.
A resident agreement may incorporate the terms of any of the other agreements.
Before signing any agreements, prospective residents should obtain independent advice about the agreements and any impact they may have on their financial position. Prospective residents should challenge any provisions that do not comply with the aged care legislation or that attempt to minimise residents' rights under that legislation.
Prospective residents or their representatives may seek assistance from Elder Rights Advocacy (see: "Advocacy services", below) or complain to the Department (see: "External complaints mechanisms", below) if they consider that in the process of negotiating any agreements they were treated unfairly or subjected to any pressure from the provider.
A provider of residential care must offer to enter into a resident agreement with the resident and, if the resident wishes, enter into that agreement (s.56-1(g) AC Act).
The agreement offered must comply with section 59-1 of the AC Act, and contain certain provisions, including the following:
- the levels of care and services that the provider has the capacity to provide;
- the policies and practices that the provider will follow in setting the fees;
- if the resident is entering on a respite basis the period for which the care and services will be provided, and (if applicable) any respite care booking fee;
- the circumstances in which the resident may be asked to leave;
- the complaints resolution mechanism that the provider will use; and
- the resident's responsibilities.
A resident agreement must also comply with the User Rights Principles, which require a resident agreement to:
- provide for a 14-day cooling-off period for the resident;
- provide for its termination on seven days written notice from the resident to the provider;
- treat the resident and provider as equals and clearly set out the rights and obligations of each party;
- provide for the resident's right to occupy a place at the service for the period stated in the agreement or for the remainder of the resident's lifetime; and
- be expressed in plain language and be readily understandable (Part 6 User Rights Principles).
A resident agreement must not contain any provision that would have the effect of the resident being treated less favourably in relation to any matter than the resident would otherwise be treated, under any law of the Commonwealth in relation to that matter (s.59-1(3) AC Act). In addition, the provider must tell the resident (or their representative) about the terms of the agreement and assist them to understand those terms (Part 6 User Rights Principles).
Whether or not the resident enters into the offered resident agreement, their rights are still protected under the AC Act and the Principles. The major advantage for a resident in entering into a resident agreement is the private right to enforce the agreement at law.
Where an accommodation bond is charged, an accommodation bond agreement must be entered into by the provider and the resident before, or within 21 days after the resident's entry to the service (s.57-2(1)(e) AC Act). Where such an agreement has not been entered into within the requisite time, then arguably there is no obligation to pay the bond, and the tenure of the resident remains secure.
The information that must be set out in the accommodation bond agreement includes:
- the amount of the bond the resident has agreed to pay;
- the payment method chosen by the resident (lump sum, periodic payments or both);
- when the bond is payable;
- when retention amounts and other amounts that may be deducted will be deducted;
- any financial hardship provisions that apply to the resident; and
- the circumstances in which the bond balance must be refunded and how the amount of the refund will be worked out (s.57-9 AC Act).
The User Rights Principles also require the agreement to include certain information such as:
- in dollar terms the amount of each retention amount that will be deducted;
- the retention amounts payable if the resident is provided with care for not more than two months;
- the rate of interest payable if the bond is paid wholly or partly as a lump sum after the entry date, is paid by periodic payments, or has not been paid when it was due to be paid; and
- the way interest charges are calculated and the frequency at which they will be debited.
If a resident chooses to pay the bond wholly or partly by periodic payments, the agreement must also state:
- the amount of the lump sum equivalent;
- the amount and frequency of each payment;
- how much of each payment represents interest and how much represents a retention amount; and
- that the resident may, at any time, pay as a lump sum all or part of the lump sum equivalent (Part 4, Div.5 User Rights Principles).
Where an accommodation charge is charged an accommodation charge agreement must be entered into by the provider and the resident before, or within 21 days after the resident's entry to the service (s.57A-2(1)(e) AC Act). As with accommodation bonds, if no agreement has been entered into within that time, then arguably there is no obligation on the resident to pay an accommodation charge, and the tenure of the resident remains secure.
The information that must be set out in an accommodation charge agreement includes:
- the amount of accommodation charge payable on a daily basis;
- how the accommodation charge is to be paid;
- the time or times when the accommodation charge is payable; and
- any financial hardship provisions that apply to the resident (s.57A-3 AC Act; Part 4A, Div. 5 User Rights Principles).
When a resident enters an extra service place the provider must, before the provision of care, enter into an extra service agreement with the resident. There must be no duress or threat of disadvantage or detriment. The agreement must state:
- the level of the extra service amount;
- how that amount may be varied; and
- the standard of accommodation, services and food to be provided.
The Extra Service Principles sets out requirements that must not be contravened when entering into an extra service agreement. The requirements are that:
- the resident and the provider must be treated as equal parties under the agreement;
- the provider must tell the resident (or their representative) what the terms of the proposed agreement are, and assist the resident (or their representative) to understand those terms; and
- the agreement must be signed by the provider and the resident (or their representative) (Div. 36 AC Act; Part 7, Div. 1 Extra Service Principles).
If, by reason of physical incapacity or mental impairment, a resident is unable to enter into an agreement, another person (other than the provider) representing the resident may enter into the agreement on behalf of the resident (s.96-5 AC Act). If a resident is mentally impaired and does not understand the agreement, it should be entered into by a person with the legal authority to enter into agreements on behalf of the resident.
The AC Act provides for an extension of time for entering into an accommodation bond agreement and an accommodation charge agreement where steps have been taken for the appointment of a legal representative, such as through the VCAT (Guardianship List) (ss.57-2(2) & 57A-2(2)). (See: Chapter 16*6 Guardianship and Administration, for more information about the appointment process.)
A resident can expect certain goods and services to be provided, and that the service will meet the necessary standards of care.
Section 54-1 of the AC Act sets out the responsibilities of providers in relation to the quality of the care that they provide. These include:
- providing the care and services specified in Schedule 1 of the Quality of Care Principles at a quality that is consistent with residents' rights under the User Rights Principles;
- maintaining an adequate number of appropriately skilled staff to ensure that residents' care needs are met; and
- complying with the Accreditation Standards and the User Rights Principles.
All residents are entitled to receive hotel services including bedding, furnishings, cleaning, utilities, laundry, meals and refreshments, social activities and waste disposal. All residents are entitled to assistance with activities of daily living such as showering, dressing, eating, personal hygiene, continence management, communication and managing medication.
High care residents are also entitled to receive nursing care together with therapy services such as physiotherapy, podiatry and speech therapy. They are also entitled to be provided with items such as toiletry goods, basic medical and pharmaceutical supplies, continence management products and mobility aids (see: "Specified care and services for residential care services" in Schedule 1 of the Quality of Care Principles).
A residential care service must be accredited by the Agency for the provider to be eligible to receive Australian Government funding (s.42-1 AC Act). The four Accreditation Standards are set out in Schedule 2 of the Quality of Care Principles. They are:
- Management systems, staffing and organisational development;
- Health and personal care;
- Resident lifestyle; and
- Physical environment and safe systems.
Each Standard consists of a principle and a number of expected outcomes. There are 44 expected outcomes across the four Standards. All residential care services are accredited against, and monitored for their compliance with the Standards by the Agency. If non-compliance is found, the Agency may take action such as putting the service on a timetable for improvement or revoking or varying the service's accreditation.
The Accreditation Grant Principles 2011 set out the procedures that the Agency undertakes to accredit a service as well as the ongoing responsibilities of the Agency for services that have received accreditation.
In 2011 the Department commenced a review of the Accreditation Standards. For further information about the accreditation process and the Draft Revised Standards see the Agency's website at www.accreditation.org.au.
The Charter (Schedule 1 of the User Rights Principles) sets out some important rights of residents. Providers are required to comply with these rights and face action from the Department if they do not comply. The basic philosophy of the Charter is that a residential care service is each resident's home, and that as far as possible a resident should be able to continue living as they choose. The Charter includes that each resident has the right to:
- full and effective use of his or her personal, civil, legal and consumer rights;
- quality care which is appropriate to his or her needs;
- be treated with dignity and respect, and live without exploitation, abuse or neglect;
- personal privacy;
- live in a safe, secure and homelike environment;
- be treated as an individual and to have his or her individual preferences taken into account and treated with respect;
- maintain independence and personal choice;
- select and maintain social and personal relationships with another person without fear, criticism or restriction;
- complain and to take action to resolve disputes;
- have access to advocates and other avenues of redress; and
- be free from reprisal, or a well-founded fear of reprisal, in any form for taking action to enforce their rights.
A resident has the right to remain in their original room or bed for the duration of their stay in a residential care service, except in circumstances where:
- the resident requests a move; or
- the resident agrees to move to another place in the service after being fully consulted and without being subject to any pressure; or
- the move is necessary to carry out repairs or improvements to the premises, in which case the resident has the right to return to the bed or room (if it continues to exist) when the repairs or improvements are completed; or
- the place occupied by the resident becomes an extra service place and the resident elects not to pay the extra service fee; or
- the move is necessary on genuine medical grounds (as assessed by either an ACAS or two medical or other health practitioners competent to conduct such an assessment, one of whom must be independent of the service and chosen by the resident) (s.23.15 User Rights Principles).
A resident who "ages in place" cannot be required to move to a different bed or room in the service when they need high level care unless one of the above circumstances applies. See: "Leaving a residential care service", below, for information about security of tenure.
A permanent resident has the right to stay and receive care for the remainder of their life, except when:
- the service is closing; or
- the service no longer provides accommodation and care suitable for the resident, having regard to their long-term assessed needs, and the provider has not agreed to provide care of the kind that the resident presently needs; or
- the resident no longer needs the care provided; or
- the resident has not paid any agreed fee to the provider within 42 days after the day the fee is payable, for a reason within the resident's control; or
- the resident has intentionally caused serious damage to the service or serious injury to the provider, an employee or another resident; or
- the resident is away from the service for a continuous period of at least seven days for a reason not permitted under the AC Act (s.23.5 User Rights Principles).
These are the only circumstances in which a provider may ask a resident to leave.
Where the provider alleges that the service no longer provides accommodation and care suitable for the resident, the long-term care needs of the resident must be assessed by an ACAS or two medical or other health practitioners competent to conduct such an assessment, one of whom must be independent of the service and chosen by the resident. If a low care resident enters a service on an "ageing in place" basis, it is supposed to mean that the resident can continue to live in the service if their care needs increase and they need high level care. This may be relevant to the question of whether the service provider has "agreed to provide care of the kind that the resident presently needs".
Where the provider alleges that the resident no longer needs the care provided, the needs of the resident must be assessed by an ACAS (s.23.5(5) User Rights Principles).
If a provider asks a resident to leave, the provider must give at least 14 days written notice. However, the provider must not take action to make the resident leave, or imply that they must leave, before suitable alternative accommodation is available that meets the resident's long-term assessed needs, and which the resident can afford, even though the 14 days notice may have expired (s.23.6(1)–(3) User Rights Principles). The written notice must include the reasons for the decision and the resident's right to access independent complaints processes and an advocacy service (s.23.6(1) User Rights Principles).
It is important for residents to seek advice when a provider says that they have to leave. There are often occasions when providers claim that a resident must leave, or that a resident is not to return to the service from hospital, when the provider is not entitled to require the resident to leave or to not return. If a resident (or their representative) has any concerns about security of tenure, they should contact Elder Rights Advocacy for information and advice as soon as possible (see: "Advocacy services", below).
If a resident decides to leave a service, seven days written notice must be given to the provider only if the resident agreement provides for it. An agreement cannot require a resident to give more than seven days notice.
If a resident dies or leaves a service, any daily fees paid in advance in respect of a period occurring after the resident dies or leaves must be refunded (s.58-1 AC Act). It is implicit that if a resident decides to leave and has not paid fees in advance, they can only be charged fees up to the day they leave.
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RESIDENTS' RIGHTS :: Last updated: Thu Jul 1st 2010