Accommodation agreements for residential aged care

An accommodation agreement sets out a person’s residential aged care accommodation costs. 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

An accommodation agreement must include the following details:

  • the resident’s date of entry to care
  • agreed room price
  • the room features the room price entitles the resident to
  • what residents will pay
  • payment options
  • any interest charged on late daily payments or contributions
  • services that the room price entitles the resident to
  • room changes, including voluntary and non-voluntary moves
  • any amounts that are permitted to be deducted
  • circumstances in which a refundable deposit must be refunded

What residents will pay

The accommodation agreement must include that a resident will pay an accommodation payment if:

The agreement must also include that a resident will pay an accommodation contribution if their means-tested amount is less than the maximum accommodation supplement. 

The agreement must set out that the amount of accommodation contribution payable by a resident can change while the resident is in care depending on:

Find out more about accommodation payments and contributions.

Payment options

The accommodation agreement must set out that within 28 days of entering care, the resident must choose to pay for their accommodation (if payable) by:

  • refundable deposit (a lump sum)
  • daily payments (a rental-style payment)
  • a combination of the two

It must state that if the resident chooses to pay by a refundable deposit, they:

  • have 6 months to pay
  • must pay for their accommodation as a daily payment in the meantime

You are also required to provide an example of a combination payment in the agreement.

Remember:

  • the resident decides the percentage of refundable deposit and daily payments that works best for them
  • you cannot ask someone to pay by a lump sum before they enter your service

Accommodation payment details

A person’s accommodation agreement must include the method for calculating each payment option:

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

The agreement must also set out that you will deduct the DAP from the RAD if the resident requests you to.

We recommend you also include the maximum permissible interest rate (MPIR) that was current on the day the resident agreed to a room price.

Find out how to calculate accommodation payment amounts.

Accommodation contribution details

A person’s accommodation agreement must include the method for calculating each contribution option:

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

It must also include that:

  • the accommodation contribution will not be greater than their means-tested amount (worked out by Services Australia)
  • you will deduct the DAC from the RAC if requested by the resident

We recommend you also include the MPIR that was current on the day the resident entered care.

Find out how to calculate accommodation contribution amounts.

Lump sum refund details

An accommodation agreement must note the circumstances under which you must refund a refundable lump sum amount. This includes:

  • when the resident transfers to another service
  • when the resident returns home
  • after your service has been shown probate or letters of administration after a resident dies
  • if your service ceases to be certified

Read more about refunding lump sums.

Preparing an agreement

You must discuss the accommodation 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 to provide an 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 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 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 2014 (No. 2)

Contact

Residential aged care and home care fees contact

Contact us about fees for residential respite care, home care (basic daily fee, income-tested care fee) and residential aged care (means-tested care fee, income tested fee, additional service fees, time extensions to enter into accommodation agreements, accommodation payments, bonds and charges).

AgedCareFees [at] health.gov.au

View contact

Last updated: 
9 April 2021

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