Residential Care Accommodation Bond

The following information has been compiled to inform and support people who are considering entering, or who have entered, low-level (hostel) residential care. For further information please phone CPSA on (02) 9281 3588 or 1800 451 488 (regional) or refer to the organisations listed.

What is an accommodation bond?

An accommodation bond is an amount you may be asked to pay when you enter low level (hostel) care or an extra service place.

Most of the bond is returned to you when you leave the aged care facility. The facility may keep up to $265.50? a month from the bond for up to 5 years (known as the retention period).

An accommodation bond can only be charged by facilities that have been certified as meeting the minimum building and care standards.

Users of respite care do not have to pay an accommodation bond.

How much will my accommodation bond be?

There is no legislative requirement for service providers to ask you to pay a bond.

The amount of accommodation bond you may be asked to pay depends upon your financial situation, the facility you are entering and negotiation between provider and resident.

You will not be asked to pay an accommodation bond if to do so would leave you with less than $31 500 in assets. You will still receive the care you require.

The average size of new bonds in 2002-03 was $98 775.

From 1 July 2005, lump sum accommodation bonds are exempt from Social Security and Veterans’ Affairs asset test.

Will my home be counted as an asset?

The value of your home will be counted as an asset unless your spouse or dependent child is living there or a close relative who is entitled to income support has lived there for at least 5 years. A carer who receives income support and has lived there for at least two years will also mean your house is not counted as an asset.

From 1 July 2005, residents who rent out their former home can do so without the rental income affecting their pension.

Does every facility calculate the accommodation bond the same way?

No! That’s why it is very important to shop around for an aged care facility that offers you the services you need and at a cost you can afford.

How do I pay the accommodation bond?

You may pay the accommodation bond as a lump sum, regular periodic payments (fortnightly or monthly) or a combination of lump sum and periodic payments.

If you make periodic payments they begin as soon as you enter the home and interest may be charged on overdue amounts. There is no legislative requirement for interest to be charged but if it is the rate to be charged and the circumstances when the rate may be charged must be included on the Accommodation Bond Agreement. For residents entering care between 1 April and 30 June 2006, the maximum interest rate is 9.61%. Residents who entered care between 1 January and 31 March 2006 may be charged a maximum of 9.63%.?

If you choose a lump sum payment, you are not required to do so until 6 months after entering the home.

What happens to my bond if I move to another facility?

If you move to another aged care facility for low level (hostel) care your accommodation bond can be transferred to the new facility.

You cannot be asked to pay a higher bond than that refunded to you unless more than 28 days have passed between leaving the first facility and entering the second facility.

Only the balance of the bond retention period (5 years) is carried over to the new facility.

FOR FURTHER INFORMATION

Commonwealth Carelink Centres – Phone 1800 052 222

Australian Government Department of Health and Ageing – Phone 1800 020 103 or visit the website www.health.gov.au

Aged and Community Care Information Line – Phone 1800 500 853 or visit the website www.seniors.gov.au

Contact details

Combined Pensioners and Superannuants Association (CPSA)
Level 9 28 Foveaux Street, Surry Hills, NSW, 2010
Phone 9281 3588
Fax 9281 9716