A resident agreement is a legal agreement between a care recipient of an aged care provider and the provider. In accordance with the Aged Care Act 1997 the following items must be included in a resident agreement:
- care and services to be provided to the care recipient
- period of occupation
- fees and charges
- policies and practices
- care recipient’s rights and responsibilities
- termination of occupation and assistance that the provider will provide to the care recipient in these circumstances
- complaints resolution mechanism
- any other matters required by the User Rights Principles (URP)*
URP are provider responsibilities prescribed by law with respect to a care recipient’s security of tenure, access to service, rights (including legal and consumer rights), movement and right to information.
A resident agreement should be provided to the care recipient prior to their entry into care. The provider must ensure the care recipient or their representative is ‘told of and helped to understand’ the terms of the agreement. However, this is not a requirement for independent advice. There are several important clauses contained within a resident agreement that care recipients should be aware of and ensure they understand. We summarise some of these below.
‘Cooling off’ period
Every resident agreement contains a ‘cooling off’ period of 14 days. This enables the care recipient to withdraw from the agreement within 14 days of signing the agreement if they happen to change their mind.
Appointment of Guarantor
Resident agreements may request that a third party guarantee be provided. The purpose of a guarantee is to provide protection to the provider in the event the care recipient is unable to pay their fees. There is no obligation for aged care providers to insist that third party guarantors seek independent advice. Although the risks associated with giving a guarantee in aged care are much lower than giving a guarantee in other contexts, such as giving a guarantee to a bank for a loan, it is advisable that the guarantor seeks independent advice prior to signing a guarantee.
Fees
An aged care provider is legally only allowed to charge fees that relate to a care recipient’s care. These fees include: basic daily fee (living costs such as meals, power and laundry); means-tested care fee; accommodation payment, and; fees for extra or additional services. Basic daily fees and means-tested care fees are not negotiable as they are set by government, however other fees such as the Refundable Accommodation Deposit (RAD) and Additional Service Fees (ASF) may be negotiable. It is worth shopping around to compare costs prior to negotiating a RAD with a prospective provider. ASF benefits should be closely scrutinised to determine whether there are any benefits the care recipient is unable to utilise. If so, this cost may be able to be negotiated down or eliminated.
Warranty
Quite often resident agreements will contain a warranty clause stating that the care recipient understands the content of the agreement and has received independent legal and financial advice.
In addition to a resident agreement, the care recipient may also be presented with an accommodation agreement and an extra services agreement. An accommodation agreement contains information specific to the accommodation conditions and payments. An extra services agreement contains an itemised list of extra services and their cost. Often accommodation and extra services agreements are combined with the resident agreement.
Navigating the transition into aged care can be a daunting and emotional task. It is important to have a thorough understanding of the terms of a resident agreement and complete any fee negotiations prior to entering into care. We are able to assist you through this process should you require it.