About accommodation bonds and charges
Based on an assessment of a resident’s assets when they first entered care, they were either:
- eligible for Australian Government support
- required to contribute to their accommodation costs
- a combination of both.
If the resident was not eligible for government support for all of their accommodation costs, they would have paid and may still be paying:
- an accommodation bond – a lump sum payment for low-care residents and residents in extra service places
- a daily accommodation charge – a rental style payment for high-care residents.
Residents transferring into your care
Residents who entered care before 1 July 2014 and are transferring into your care can either:
- stay on their pre 1 July 2014 arrangements
- choose to transfer to the post 1 July 2014 arrangements before they enter your service.
If the resident has not chosen to change to the newer fee arrangements, you will collect an accommodation bond or charge from the resident.
You can only ask the resident to pay the same type of accommodation payment as they were paying in their previous service. They cannot switch from paying a bond to paying a charge or vice versa.
The bond cannot be larger than the bond refunded from the first service, and the retention amounts do not reset. The charge amount cannot be more than the charge amount at the first service.
Accommodation bonds
A resident’s bond amount was agreed when they first entered care. The amount of the bond could be no more than the resident’s total assets minus the minimum asset amount that applied when the bond was first agreed.
Accommodation bond agreement
The accommodation bond agreement outlines how to manage the bond and may be included in the resident agreement. The agreement must include, among other things:
- the resident’s date of entry to the service
- the accommodation bond amount that you and the resident agreed on
- the payment arrangements
- the calculation for periodic payments, if the bond is going to be paid by periodic payments
- amounts that will be deducted from the bond balance for retention amounts
- whether paying the bond entitles the resident to specific accommodation or additional services
- how much interest the resident must pay if they don’t pay their bond
- any financial hardship provisions that apply to the resident.
Provider responsibilities for accommodation bond agreements are in Chapter 4 of the Aged Care (Transitional Provisions) Principles 2014.
Bond payments
Residents can pay the bond as a lump sum or as periodic payments for some or all of their bond.
The resident pays interest as part of periodic payments. You must set the interest rate to be at or under the maximum permissible interest rate (MPIR) that applies on the day they enter your service.
You may either:
- deduct a retention amount from an accommodation bond balance
- include a retention amount in a bond periodic payment.
Retention payments can be deducted for a maximum of 5 years from the day the resident first became a permanent resident, unless:
- the aged care service was not certified on that day – the 5-year period started the day the aged care home became certified
- a determination of financial hardship was in force – the 5-year period started the day after the determination ceased
- the resident transferred from respite care – the 5-year period started the day of the transfer.
Retention amounts must be agreed between you and the resident. The government caps the maximum monthly retention amounts.
If a resident chooses to pay some of the bond as a lump sum, the maximum retention amount applies to the total bond.
Bond refunds
You must refund the accommodation bond balance held by your service when the resident permanently leaves your care.
Deducting fees from bonds
You can deduct from an accommodation bond balance:
- amounts owed to you under the resident’s accommodation bond agreement, resident agreement or extra services agreement
- interest on the amounts owed
- retention amounts.
Interest on amounts owed is calculated from 1 month and 1 day after the fee was payable.
A fee payable on 1 July 2024 will start attracting interest from 2 August 2024. Interest is charged until the fee is paid or the resident leaves, whichever comes first.
Interest equivalent on unpaid bonds
If you have cared for a resident who agreed to pay an accommodation bond but did not pay it before they left your service, you can charge them an interest equivalent. See Sections 74 and 91(3) of the Aged Care (Transitional Provisions) Principles 2014.
Accommodation charges
A resident’s accommodation charge amount was decided based on the value of their assets when they first entered care.
Residents who entered care before 2004 can pay an accommodation charge for up to 5 years. The 5-year limit does not apply to residents who entered care between 1 July 2004 and 1 July 2014.
The resident must agree on the accommodation charge details within 21 days of entering your care.
You can ask residents to pay their accommodation charge no more than 1 month in advance.
Accommodation charge agreement
The accommodation charge agreement must include, among other things:
- the resident’s date of entry to the service
- the accommodation charge amount
- The time or times the accommodation charge is payable
- the interest charge on amounts that are not paid on time – if a resident has a financial hardship determination, they may pay less than the agreed daily amount
- whether paying the accommodation charge entitles the resident to specific accommodation or additional services.
You can also add this information to the resident agreement.
Read more about your responsibilities for accommodation charge agreements in Chapter 4 of the Aged Care (Transitional Provisions) Principles 2014.
Setting bonds and charges for residents moving homes
A pre 1 July 2014 resident who moves to your aged care home and:
- paid an accommodation charge at their previous service – pays no more as an accommodation charge than the rate payable at the previous service
- paid an accommodation bond at their previous service – pays no more as an accommodation bond than the amount refunded from the previous service
- had a break in care for more than 28 days – will be reassessed under the post 1 July 2014 fee arrangements.
Your service may be eligible for an accommodation supplement for an incoming pre 1 July 2014 resident, depending on their assets.
Residents can get advice on how to update their assets by calling Services Australia.
Accommodation bonds and charges are set on the day a resident enters care, according to their assets test. The bond or charge amounts do not change while they remain in the same place.
Maximum monthly bond retention amounts
The government sets the maximum monthly retention amount. The capped amount depends on the size of the bond and changes annually in line with the Consumer Price Index.
Once set, a resident’s retention amount does not change.
View maximum monthly bond retention amounts in the Schedule of fees and charges for pre 1 July 2014 residential and home care recipients.
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