Have your say about the protection of residents’ savings
On 12 April 2010, the Government announced it would increase protections for the more than $9 billion of aged care residents’ savings held in aged care accommodation bonds. The announcement was made as part of the More Support for Older Australians in the National Health and Hospitals Network.
The Enhanced Prudential Regulation of Accommodation Bonds Issues Paper has now been released. It provides information about these measures and explains how you can have your say during the consultation. In particular, it:
- outlines the need for regulatory change;
- discusses key issues for consideration in the development of the new measures; and
- seeks input on any additional issues and options for increasing the accountability of approved providers for their use of accommodation bonds.
The Government has already committed $21.8 million over the next four years to support enhanced protections to further safeguard the more than $9 billion of residents’ life savings held in aged care accommodation bonds by approved providers.
New arrangements will require amendments to the Aged Care Act 1997 (the Act) and the User Rights Principles 1997. The measures are to make the following changes:
- clearly articulating in the Act that accommodation bond funds can only be used for capital works, debt reduction relating to capital works and certain financial investments;
- requiring approved providers to disclose to residents, and the Department, how their accommodation bond funds are to be invested; and
- regulating what accommodation bonds can be used for in such a way that allows for criminal penalties for misuse of accommodation bonds.
Consultation with consumers and the residential aged care industry is imperative in the development of an appropriate risk based prudential regime. In strengthening the protections for residents’ savings, the Government will seek to keep the regulatory burden as low as possible while delivering on the policy objectives.
More information is available at http://www.health.gov.au/
