Accommodation bonds are not as frightening as they might appear at first sight.
They are sometimes payable, but by no means always, when entering Commonwealth funded aged care homes (that is, homes under the regulation of the Aged Care Act).
All residents of Commonwealth funded homes are classified as either high or low care. Low care residents only (with some exceptions) may be eligible to pay an accommodation bond.
In the majority of cases there is no regulation as to the amount of the bond – it is a negotiated amount.
Once negotiated it is fixed and cannot be varied during the period of the residency.
Accommodation bonds are guaranteed both by the home itself, and by the Commonwealth government. Accordingly, the repayment of the balance of the bond after deduction of a monthly retention amount (also fixed by the Commonwealth, and only payable for a maximum of five years) is assured. The balance is repayable to the resident when the residency ceases. The home is entitled to all of the interest earned while the bond is held.
The bond can be paid either as a lump sum, by periodic payments, or a combination of both.
The home must use the interest earned on bonds for specific purposes mandated by the Aged Care Act, for example, improvements to facilities.
Because accommodation bonds are negotiated between the home and the prospective resident, this firm strongly recommends the use of aged care placement agencies as the first port of call. Local placement agencies have significant knowledge about what the home will seek for the accommodation bond, and to what extent it can be negotiated down.
©Peter J. R. Gauld LL.B
Gauld & Co. Elder Law Solicitors
Suite 5, 1st Floor,
838 Glenferrie Road,
Hawthorn, Melbourne, Australia, 3122.
03 9024 3868
0401 230 711
gauld.co@gmail.com