Accommodation agreements for residential aged care

An accommodation agreement sets out a person’s residential aged care room fees, charges and payments. You must include certain details, provide a copy to the person, and make sure they understand and agree to it. Review the agreement as needed, and update it if you both agree to the changes.

What is an accommodation agreement?

The accommodation agreement outlines details of a resident’s room, costs and other accommodation conditions. It’s in addition to the resident agreement, but can be part of the same document.

What to include

The accommodation agreement must include the following information.

Accommodation details

  • the resident’s date of entry to care
  • agreed room price
  • the room details the room price entitles the resident to
  • payment options
  • room changes
  • services that the payment entitles the resident to
  • any amounts that are permitted to be deducted
  • circumstances in which a refundable deposit must be refunded
  • voluntary and non-voluntary moves

Accommodation payment situations

An accommodation agreement must cover all possible accommodation payment situations for the resident.

A resident will pay an accommodation payment if:

  • their means-tested amount is equal to or greater than the maximum accommodation supplement for that day
  • they have means not disclosed status

A resident will pay an accommodation contribution if their means-tested amount is less than the maximum accommodation supplement.

If their means-tested amount is $0, the resident will not pay an accommodation contribution. Instead, the Australian Government will pay the maximum accommodation supplement your service is eligible for.

Payment information

Within 28 days of entering care, the resident must choose to pay for their accommodation (if payable) by:

  • refundable deposit
  • daily payments
  • a combination of the two

If the resident chooses to pay by a refundable deposit, they have 6 months to pay. In the meantime, the resident will pay their accommodation as a daily payment.

Calculating accommodation fees

A resident can submit their means assessment to Services Australia either before or after entering care. Services Australia then calculates the resident’s means tested amount.

Services Australia will determine whether the resident:

  • can be asked to pay a means-tested care fee
  • will receive government assistance with their accommodation costs or needs to pay the room price negotiated before entry

To calculate the equivalent daily payment, multiply the refundable deposit by the current maximum permissible interest rate (MPIR). Divide that amount by 365 days.

For example, if the MPIR is 5.70%, a refundable deposit of $400,000 would have an equivalent daily payment of $62.46: ($400,000 x 5.7%) / 365 = $62.46 per day.

An example of a combination payment for a $400,000 price could be a refundable deposit of $200,000 and a daily payment of $200,000, making the daily payment $31.23: ($200,000 x 5.7%) / 365 = $31.23.

Accommodation contribution

Residents can make an accommodation contribution with:

  • a lump sum, refundable accommodation contribution (RAC)
  • rental-style payments called a daily accommodation contribution (DAC)
  • any combination of both

Services Australia will advise you of the DAC.

Accommodation payment

Residents can pay for their accommodation as:

  • a lump-sum refundable accommodation deposit (RAD)
  • rental-style payments called a daily accommodation payment (DAP)
  • a combination of both

If they choose to pay a combination, the resident decides the percentage of RAD and DAP.

How to prepare an accommodation agreement

You must discuss the agreement with the resident before they enter your care.

The resident must understand and agree to the room price and conditions. You’re responsible for making sure they understand everything in the agreement.

If needed, use the National Translating and Interpreting Service.

A resident can choose to agree without signing the agreement. If they choose not to sign, you must record your interactions and that they agreed as part of your record keeping responsibilities.

When and how to provide an accommodation agreement

You can enter into an accommodation agreement either:

  • before the resident enters care
  • within 28 days after the resident enters care

Reviewing and updating accommodation agreements

You must review and update the resident’s accommodation agreement if:

  • their room changes
  • they request to deduct fees from their refundable deposit
  • they ask you to

This should be part of your ongoing care discussions with the person.

You must provide a copy of the updated agreement to the resident as soon as possible after finalising it.

Extending the timeframe to enter into an accommodation agreement

You can apply for an extension to the timeframe to sign an accommodation agreement.

The 28-day period can be extended if a legal process starts within the 28-day period to appoint a legal representative for the care recipient.

We usually extend the period by 7 days until after the legal process is over. However, you can apply to have the process extended further.

Full requirements

Details of what’s in an accommodation agreement are in:

  • Division 52F in the Aged Care Act 1997
  • Part 4 of the Fees and Payments Principles (No. 2) 2014
Last updated: 
22 January 2020
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