From 1 November 2025, a service agreement replaces the former resident agreement.
What is a service agreement?
A service agreement is a legal agreement between a resident and the residential aged care provider.
It sets out the care and services you will provide to a resident, and how much it will cost them.
As well as a service agreement, a resident in permanent cate must also have an accommodation agreement.
What to include
The service agreement must be written in plain language and easy to understand.
It should state that a resident has a right to occupy a bed at the aged care home. Their right to a bed and room begins on the day the agreement takes effect and continues until either:
- the period set out in the agreement ((for short-term funded aged care services)
- the end of the resident’s life.
The agreement should also include the following information.
Details of people and services
The agreement needs to have:
- resident details
- your provider details
- the date you will start providing services
- the levels of care and services you will provide.
Fees, charges and payments information
You should include in your agreement:
- which fees the resident may be asked to pay
- a copy of your policies and practices used to set fees, charges and payments
- how much interest the resident will pay on late payments, or a method for working out interest
- what happens if a resident doesn’t pay fees, charges and payments.
Other details
Other details that must be included in the agreement are:
- why you may ask the resident to leave and how you will help the resident find alternative accommodation if you ask them to leave
- the resident’s rights and responsibilities
- your rights and responsibilities
- how you deal with complaints
- any other matters agreed between you and the resident, within the requirements of the Aged Care Act 1997.
How to prepare a service agreement
You must work with the resident to prepare the service agreement.
They must understand and agree to the fees and conditions before any services begin. You’re responsible for making sure they understand what is in the agreement.
You can use the National Translating and Interpreting Service to help you.
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 a service agreement
You should provide a service agreement to a resident before or not long after they move in.
The resident has 14 days from agreeing to withdraw.
The 14-day withdrawal period
If a resident tells you in writing that they want to withdraw from the agreement within 14 days, the agreement has no effect. This should be stated in the agreement.
The resident is liable for any fees or charges payable while you provided them with care and services under the agreement. You must refund the resident for any other amount they paid under the agreement.
Reviewing and updating service agreements
You must review and update the service agreement if:
- their care needs change
- 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.
Transitioning resident agreements to service agreements
Individuals who enter permanent care on or after 1 November 2025 will enter into a ‘service agreement’ rather than a resident agreement.
You will have 12 months until 31 October 2026 to transition all of your residents from a resident agreement to a service agreement.
For continuing residents who do not have a new service agreement on 1 November 2025, providers must give the following information to the individual:
- a copy of the Aged Care Statement of Rights;
- your policies and practices in relation to setting individual contributions and fees for the provision of funded aged care services to the individual at the approved residential care home
- the circumstances in which the individual may be asked to leave the approved residential care home and the assistance you will provide to ensure suitable alternative accommodation is available with an alternative registered provider
- the complaints and feedback management system you will use to address complaints or feedback made by or on behalf of the individual; and
- the individual’s responsibilities as a resident in the approved residential care home.