What do I need to know about accommodation bonds if I entered aged care before 1 July 2014, and what happens when I leave or if my loved one passes away
We understand that dealing with accommodation bonds in aged care can feel overwhelming, especially when you or your loved one entered care before 1 July 2014. It’s important to know your rights, options, and the protections in place for your funds. Here’s a clear breakdown of what you need to know about accommodation bonds and what happens when you leave care or in the event of a resident’s passing.
What is an Accommodation Bond?
An accommodation bond is a lump sum payment made when moving into an aged care home, usually for residents assessed with low-level care needs or those in an extra service place with high-care needs. This bond helps cover accommodation costs and is refunded when you leave or after your passing, minus any agreed deductions.
How the Bond Amount is Determined
Your bond amount was based on your assets assessment at the time of entry and negotiated between you and the aged care home. The bond amount could not exceed the difference between the minimum assets amount and your assessed assets. The specific rate is outlined in the Schedule of Fees and Charges for Pre-1 July 2014 Residential and Home Care Recipients.
Payment Options for Your Bond
You can pay your accommodation bond in three ways:
- Lump Sum Payment
- You had up to six months from the date of entry to pay the bond.
- Interest and retention amounts may have applied during this period.
- Periodic Payments
- Regular rental-style payments (e.g., fortnightly or monthly).
- Interest applies to unpaid amounts.
- Combination of Lump Sum and Periodic Payments
- A mix of lump sum and ongoing payments, including interest and retention amounts.
Retention Amounts and Deductions
Your aged care home may deduct retention amounts from your bond for up to five years from your date of entry. These deductions can be made monthly or as part of periodic payments. The maximum retention amount is set by the government and detailed in the fee schedule.
Interest on Your Bond
If you didn’t pay the bond in full upon entry, you may have been charged interest on the unpaid balance. This interest rate was fixed on your date of admission and specified in your accommodation bond agreement. The Australian Government sets the maximum rate, but your provider may have offered a lower rate.
Refund of Your Bond
When you leave the aged care home, the remaining bond balance (minus agreed deductions) will be refunded to you or your estate. Here’s what to expect:
- If You Leave Permanently: Refund within 14 days of your departure.
- If Moving to Another Home: Refund within 14 days after giving notice (or on your departure date if ample notice was provided).
After a Resident Passes Away
The aged care home must refund the bond balance within 14 days of receiving:
- Proof of probate (if there is a Will), or
- Letters of administration (if no Will exists).
If the provider is confident of the beneficiary’s identity, they may issue the refund without these documents.
Protections if a Provider Cannot Refund the Bond
In cases of provider bankruptcy or insolvency, the Australian Government guarantees to refund your lump sum, including any accrued interest. This safeguard ensures your funds are secure.
Changing Aged Care Homes
If you move to a new aged care home, the new bond cannot exceed the refunded amount from your previous home. While the new home may have different retention or interest rates, the five-year retention period does not restart.
Seeking Financial and Legal Advice
Given the complexity of aged care bonds and the potential impact on your finances, it is highly recommended to seek independent financial advice. Services Australia’s Financial Information Service (FIS) offers free guidance to help you make informed decisions.
- Contact FIS: Call 132 300 and say "Financial Information Service" when prompted.
- Legal Advice: If a family member plans to help pay the bond, consider seeking legal advice to understand any implications for you and your loved ones.
If You Have Concerns or Complaints
If you’re worried about your bond or refund process, you can:
- Speak to the Manager at your aged care home.
- Contact the Aged Care Quality and Safety Commission if issues remain unresolved.
We know these decisions are deeply personal and can be challenging. Remember, support is available to guide you and ensure your choices meet your needs and protect your interests.
