What is a service agreement?
A service agreement is a legal agreement between you and the resident.
It outlines the residents right to occupy a bed at the aged care home. It also sets out the essential 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 care must also have an accommodation agreement. Residents can also choose to enter into a higher everyday living fee agreement for additional services that are of a higher standard than those on the residential care service list.
What to include
The service agreement must be written in plain language and easy to understand.
The agreement must include the following information about:
- people and services
- rights and responsibilities
- fees and contributions.
People and services
The agreement needs to include:
- resident details, including name and contact details
- contact details of the resident’s registered supporters or guardians (if any)
- name and contact details for the registered provider
- name, address and contact details for the home in which care will be provided
- a copy of the resident’s access approval
- the date from when the service agreement commences
- the start date for the resident
- the standard level of care and services you will provide.
- when services will cease to be provided and the end date of the service agreement (residential respite only).
Rights and responsibilities
The agreement needs to include:
- a copy of the Aged Care Statement of Rights
- a copy of the Aged Care Code of Conduct
- the resident’s right to occupy a bed at the aged care home
- how and when the service agreement may be terminated – this includes the circumstances in which the resident may be asked to leave the approved aged care home, and the assistance you will provide to get them suitable accommodation with a different registered provider
- the complaints and feedback management system you will use to address complaints or feedback made by or on behalf of the resident
- the resident’s rights and responsibilities within the aged care home
- your rights and responsibilities to the resident
- any individual matters agreed to between you and the resident.
Fees and contributions
The agreement needs to include:
- which fees and contributions the resident may be asked to pay
- a copy of your policies and practices used to set and update fee and contribution amounts
- 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 their fees and contributions.
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 being offered in the agreement.
You can use the National Translating and Interpreting Service to help you.
Entering into a service agreement
Residential service agreements must be agreed prior to, or on the date the resident enters the aged care home.
Where possible, the service agreement should be signed by both you and the resident. In some cases, a resident may agree without signing the agreement. An agreement can be entered into verbally, however you must record your interactions and their agreement as part of your record keeping responsibilities.
Registered supporters with legally appointed decision-making powers, such as an Enduring Power of Attorney or an appointed Guardian/Administrator, may sign service agreements on behalf of a resident.
Further information is available about provider requirements and from the Aged Care Quality and Safety Commission on information management and appointed decision-makers, including registered supporters, on the My Aged Care website.
The 28-day withdrawal period
The resident is entitled to a 28-day cooling-off period to withdraw from the service agreement.
If a resident tells you either verbally and/or in writing that they want to withdraw from the agreement within 28 days of agreeing, the agreement has no effect. This should be clearly 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
A resident’s service agreement must be reviewed every 12 months.
Additionally, 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
From 1 November 2025, a service agreement replaced the former resident agreement.
If an existing resident entered into a resident agreement before 1 November 2025, you must review and vary the agreement (or enter into a new agreement) to meet the new requirements for a service agreement before 1 November 2026.
Transitioning residents with no existing agreement
If an existing resident in permanent care does not have a resident agreement in place, a service agreement must be entered into before 1 November 2026.
This agreement should be consistent with the arrangements that have been in place between you and the resident before the start of the Aged Care Act 2024.
Short-term residents who did not have a resident agreement in place as of 1 November 2025 are not required to enter into a new service agreement.
Transitioning residents who do not agree
It is important that you work with your residents to explain the changes to their agreement in a clear and simple way.
In circumstances where the resident does not agree to the new service agreement, you must demonstrate reasonable attempts to negotiate and reach a mutual agreement. Until the new service agreement is established, the terms of the previous resident agreement will remain in effect.