Accommodation lump sums
You are required to refund accommodation lump sum balances held by your service when a resident permanently leaves your care. This includes:
Refund period
If a resident permanently moves to another service, you must refund any balances of lump sum amounts to them within the legislated refund period:
- on the day they leave – if they give more than 14 days’ notice
- within 14 days of them giving notice – if they give up to 14 days’ notice
- within 14 days of them leaving – if they don’t give notice.
You must also refund the lump sum balance:
- within 14 days of a resident permanently leaving residential care
- within 14 days of sighting probate or letters of administration after a resident dies
- within 14 days of a service ceasing to be certified.
The refund period is specified in Section 4 of the Fees and Payment Principles 2014 (No. 2) and Section 52P-1(4) of the Aged Care Act 1997.
Interest rates and timeframes
Until you refund the lump sum balance, you must pay interest at:
- the base interest rate (BIR) – from the day after the resident’s permanent departure, or the day after the resident died, until the end of the legislated refund period
- the maximum permissible interest rate (MPIR) – from the day after the end of the relevant refund period above.
The rate remains fixed at the MPIR until you complete the refund.
For interest calculations see Section 69 of the Fees and Payments Principles 2014 (No. 2).
Check the current and previous BIR and MPIR interest rates.
Which rate to use
The BIR and the MPIR are updated quarterly.
For the BIR, use the rate current on the first day of the refund period:
- if the resident died – the day after sighting a copy of probate or letter of administration
- if the resident moves to another service and
- gives up to 14 days’ notice – the day after the resident gives notice
- gives no notice of departure – the day after the resident leaves
- in any other case – the day after the resident leaves.
For the MPIR, use the rate current on the day after the resident should have received their refund.
The BIR does not apply if the resident moves to another service and gives more than 14 days’ notice of departure. In this case the refund is due on the day of departure and the MPIR applies from the day after departure until you complete the refund.
Refunds while a resident is in care
You can choose to refund accommodation lump sum amounts if requested by a resident who is still receiving care in your service. However, aged care legislation does not require you to do this. It is a business decision for providers to make on a case-by-case basis.
Any changes to accommodation payment arrangements must be agreed between you and the resident and recorded in the accommodation agreement or resident agreement.
Full requirements
For full details, see Division 52P of the Aged Care Act 1997.
Also see the Fees and Payments Principles 2014 (No. 2):
- rules for refunding accommodation deposit balances and accommodation bond balances — see Part 7
- base interest rate (BIR) — see how to calculate the BIR in Section 4
- maximum permissible interest rate (MPIR) — see how to calculate the MPIR in Section 6.
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