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Reminder Notice - Aged Care Accommodation Bonds - Governance Standard

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Accommodation Bonds - Governance Standard

Reminder Notice

The requirements of the Governance Standard covering the management of accommodation bonds take effect from 1 February 2012.

Please refer to the attached information. This is a reminder notice only.
If you have any queries regarding the content of this email, please call 1800 200 422 (toll free) or email Prudential.

Reminder Notice

Aged Care Accommodation Bonds – Governance Standard

From 1 October 2011, there are clearer and stronger arrangements to protect residents’ savings held in the form of accommodation bonds (bonds).

The arrangements are made through the Aged Care Amendment Act 2011 and the User Rights Amendment Principles 2011 (No.3).

The arrangements:

• clarify the permitted uses of bonds
• introduce a two-year transition period for approved providers to adjust to, and fully comply with, the permitted uses
• introduce a new Governance Standard for approved providers holding bonds
• improve reporting and disclosure for greater transparency and consumer confidence
• introduce additional information gathering powers for monitoring compliance
• remove restrictions on the use of income from bonds, retention amounts and accommodation charges
• introduce criminal penalties for the misuse of bond funds

Please note that the Governance Standard requirements take effect from 1 February 2012. The Governance Standard requirements apply to all bonds managed by approved providers, regardless of when the bonds were charged.

The Governance Standard is intended to ensure that approved providers holding bonds have effective governance systems for managing bonds. This will help to ensure that approved providers only use bonds for permitted uses and bond balances are refunded in accordance with the Aged Care Act 1997.

The Governance Standard is not prescriptive and enables each approved provider to develop policies and systems appropriate to its circumstances. The Governance Standard also requires that approved providers using bonds for financial investments other than deposits with authorised deposit-taking institutions have, and comply with, an investment strategy.

For more information:

Protecting Residents’ Savings – A guide to the arrangements for accommodation bonds from 1 October 2011 and three information sheets for approved providers can be found on the Department’s website at www.health.gov.au/internet/main/publishing.nsf/Content/ageing-quality-protect-resi-saving-accom-bonds.htm.

To assist residents, prospective residents and their representatives understand the new arrangements, Information Sheet 16 – Accommodation Bonds for Residential Aged Care has been updated. The information sheet is available at www.health.gov.au/internet/main/publishing.nsf/Content/ageing-publicat-qcoa-16info.htm.

The Aged Care Act 1997 and the User Rights Principles 1997 are available on the ComLaw website at www.comlaw.gov.au/Details/C2011C00811 and www.comlaw.gov.au/Details/F2011C00792 respectively. Prior to 1 February 2012, amendments that commence on that date can be found in Schedule 2 to the User Rights Amendment Principles 2011 (No. 3) on the ComLaw website at www.comlaw.gov.au/Details/F2011L01991.

If you require further information please call 1800 200 422 (toll free) or email Prudential.