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Accommodation
Bonds - Law Institute of Victoria (LIV) Submission
The following is an extract about a submission which has been made by the Law
Institute of Victoria to amend the Aged Care Act 1997 in relation to when an aged
care operator does not enter into a residential care agreement with a resident
within 21 days after admissiom. Aged Care
Connect is in communication with the Law Institute of Victoria and will provide
an update about the submission as soon as a result has been obtained. Accommodation
Bonds under the Aged Care Act 1997 - 9th January 2009
Summary: The
Law Institute of Victoria (LIV) proposes the following:
* That extensive
education be provided to the community regarding aged care services and residents'
rights and responsibilities when considering moving into residential care with
particular emphasis on financial arrangements including accommodation bonds.
*
That the Act be amended to require providers to recommend to prospective residents
(or their representatives) that they obtain independent legal advice prior to
agreeing to pay a bond.
* That the Act ensures adequate protections for
residents in circumstances where, even if aware of their rights, residents are
unwilling to exercise them, for example, the right to negotiate bond amounts.
This could be due to fear of being turned away from aged care accommodation in
a situation where Australia's population is rapidly ageing and there is an undersupply
of such accommodation.
* That providers be required under legislation
to disclose all relevant information regarding accommodation bonds, including
the maximum amount of bond a resident may be asked to pay and a resident's right
to negotiate their bond, to empower residents to make informed choices.
*
That the Act clarifies contractual issues in relation to accommodation bonds.
In particular:
(a) Where no enforceable agreement (whether written or
oral) is entered into regarding payment of a bond prior to the resident's entry
into residential care, there is no liability for the resident to pay any bond.
This point should be made clear in the Act and followed by the Scheme; and
(b)
That the Act be amended to provide that if an "accommodation
bond agreement" is not entered into before or within 21 days after entry, there
is no liability for the resident to pay any bond, that is, that no bond is payable
where the provider has failed to comply with section 57-2(1)(e).
In
situations where a common law contract existed, it is arguable that the common
law contract has been varied due to the provider's failure to fulfil its statutory
obligations and, therefore, there is no valid contract. In that event, there would
be no requirement for the resident to pay any bond. * That the Act clarifies the
consequences for providers who fail to comply with other accommodation bond obligations
under the Act.
Currently, the Department does not necessarily act upon
failures by providers to comply with these obligations or compel providers to
pay refunds to residents.
On this basis, the LIV proposes an amendment
to the Act that states that if the provider does not comply with the bond rules,
it is not permitted to charge a bond.
* That the Act be amended to enable
the Scheme to deal with minor non-compliance issues by providers, for example,
situations where there are no serious consequences and which did not result from
bad faith.
* That the Scheme determines financial disputes not only by
reference to whether the type and amount of the payment in question comes within
the scope of the Act, but also considers all facts relevant to the complaint such
as whether there was any contractual obligation to make the payment in question
or any misrepresentation.
* That interest rates a provider is permitted
to charge a resident if the bond is not paid in full on the day of entry be lowered
to the equivalent of the commercial rate.
* That the Act be amended so
that where the net value of a resident's assets when realised is less than their
value or estimated value at the time of entry, the provider is required to reduce
the bond to an amount that would leave the resident with at least the relevant
minimum permissible asset value.
Download
the submission (PDF, 250kb)
Queries regarding this submission should
be directed to:
Contact: Téa Paris Legal Policy & Practice Law
Institute of Victoria
Phone: (03) 9607 9489
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