Financial Information
Accommodation Bond Balance Refund Interest Rates
Approved providers are required to pay interest on an accommodation bond balance for the period from the day after the resident leaves the care service until the accommodation bond balance is refunded. The requirement to pay interest also applies to approved providers holding entry contributions in the event that an entry contribution balance is refunded after the time specified in the Formal Agreement.
- Introduction
- The Base Interest Rate
- The Maximum Permissible Interest Rate
- Legislated timeframes for refunding bond balances
- Frequently asked questions
Introduction
Approved providers are required to pay interest on an accommodation bond balance for the period from the day after the resident leaves the care service until the accommodation bond balance is refunded. The requirement to pay interest also applies to approved providers holding entry contributions in the event that an entry contribution balance is refunded after the time specified in the Formal Agreement.Approved providers are required to pay interest at two different rates:
- at the Base Interest Rate (BIR) for the period between a resident’s departure and the completion of the legislated timeframe for refunding the accommodation bond balance. It is not payable for the day of departure, but for each day after the resident has departed the service until the accommodation bond balance is refunded or the legislated timeframe expires; and
- at the Maximum Permissible Interest Rate (MPIR) for the period after the end of the legislated timeframe (or, for entry contributions, the time set out in the Formal Agreement) until the accommodation bond balance or entry contribution balance is refunded.
The Base Interest Rate
The BIR is the interest rate calculated in accordance with Section 23.79B of the User Rights Principles 1997. The BIR takes effect on the first day of the month following the day when the below threshold rate is determined. The "below threshold rate" is the rate determined under subsection 1082(1) of the Social Security Act 1991.The BIR to be used in calculating interest is the BIR applicable on the day after the resident's departure.
The Maximum Permissible Interest Rate
The MPIR is the interest rate calculated in accordance with subsection 23.3(2) of the User Rights Principles 1997.The MPIR to be used in calculating interest is the MPIR applicable on the day after the resident should have been refunded their accommodation bond balance or entry contribution balance in accordance with the legislated timeframes or Formal Agreement.
The interest rate remains fixed at this rate until the bond or entry contribution is refunded.
The formulae for working out amounts of interest on accommodation bond balances and entry contributions are set out in Sections 23.79D and 23.80D of the User Rights Principles 1997.
For further details on the rules regarding payment of interest and examples of how the two interest rates are applied refer to Section 5 of the Residential Care Manual.
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Current and previous accommodation bond balance refund interest rates
| For residents leaving care in the period | Base Interest Rate | Maximum Permissible Interest Rate |
|---|---|---|
| From 1 April 2013 | 4.5% | 6.95% |
| 1/01/2013 to 31/03/2013 | 5% | 7.24% |
| 1/10/2012 to 31/12/2012 | 5% | 7.62% |
| 1/07/2012 to 30/09/2012 | 5% | 7.66% |
| 1/04/2012 to 30/06/2012 | 5% | 8.37% |
| 1/01/2012 to 31/03/2012 | 5% | 8.62% |
| 1/10/2011 to 31/12/2011 | 5% | 8.86% |
| 1/07/2011 to 30/09/2011 | 5% | 9.00% |
| 1/4/2011 to 30/06/2011 | 5% | 8.92% |
| 1/01/2011 to 31/03/2011 | 5% | 9.02% |
| 1/10/2010 to 31/12/2010 | 5% | 8.74% |
| 1/07/2010 to 30/09/2010 | 5% | 8.80% |
| 1/04/2010 to 30/06/2010 | 5% | 8.16% |
| 1/01/2010 to 31/03/2010 | 4% | 7.95% |
| 1/10/2009 to 31/12/2009 | 4% | 7.30% |
| 1/07/2009 to 30/09/2009 | 4% | 7.13% |
| 1/04/2009 to 30/06/2009 | 4% | 7.16% |
| 1/01/2009 to 31/03/2009 | 5% | 8.76% |
| 17/11/2008 to 31/12/2008 | 5% | 11.31% |
| 1/10/2008 to 16/11/2008 | 6% | 11.31% |
| 1/07/2008 to 30/09/2008 | 6% | 11.75% |
| 1/04/2008 to 30/06/2008 | 6% | 11.69% |
| 1/01/2008 to 31/03/2008 | 5.5% | 11.15% |
| 1/10/2007 to 31/12/2007 | 5.5% | 10.75% |
| 1/07/2007 to 30/09/2007 | 5.5% | 10.37% |
| 1/04/2007 to 30/06/2007 | 5.5% | 10.37% |
| 1/01/2007 to 31/03/2007 | 5% | 10.37% |
| 1/10/2006 to 31/12/2006 | 5% | 10.19% |
| 1/07/2006 to 30/09/2006 | 5% | 9.87% |
Legislated timeframes for refunding bond balances
Approved Providers are required to refund accommodation bond balances in accordance with the following timeframes:- if a resident is moving to another service and the resident:
a) gives more than 14 days notice, the provider must refund the bond balance on the day the resident leaves the service;
b) gives notice within 14 days of departing, the provider must refund the bond balance within 14 days of the resident giving notice
c) gives no notice before departing, the provider must refund the bond balance within 14 days after the resident leaves; - if a resident leaves the service to return home, the provider must refund the bond balance within 14 days after the resident leaves;
- if a resident dies, the provider must refund the bond balance within 14 days after being shown probate or letters of administration;
- if the service ceases to be certified, the bond balance must be refunded within 14 days of the date the service ceased to be certified.
However, BIR is payable from 2 July 2006 and MPIR is payable from the day after the refund was due.
Entry contributions should still be refunded in accordance with the Formal Agreement.
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