Residents should get legal advice before paying accommodation bonds

Elderly people proposing to enter residential care should seek legal advice to ensure that their rights are protected before they pay expensive accommodation bonds, according to the Law Institute of Victoria (LIV).

President Danny Barlow said the LIV was concerned about a number of shortcomings with the present system of charging accommodation bonds. He said there was a wide disparity between the types and amounts of bonds, with some including additional payments such as interest while in other cases no bond is required.

“These bonds, which generally range between $100,000 and $700,000, impose a large financial burden on residents. Bonds are not well understood or uniformly applied,” Mr Barlow said.

He said the LIV has written a submission to the Federal Minister for Ageing, Justine Elliot, seeking a number of amendments to the Aged Care Act 1997.

These include an amendment to ensure that the bond amount will be lowered once the resident’s assets have been sold if paying the agreed amount would leave the resident with less than the required minimum amount of assets, currently $35,500.

Mr Barlow said the LIV was seeking other amendments to ensure:

• If no enforceable written or oral agreement about paying a bond has been made between the provider and the resident before entry then no bond is payable

• If a written accommodation bond agreement has not been entered into before or within 21 days of entry to the facility, no bond is payable

• If a provider fails to comply with the rules about bonds set out in the Act, it cannot charge a bond

Mr Barlow said accommodation bond agreements should set out the rights and responsibilities of the resident and provider and must be agreed to before entry.

However, the LIV said agreements are not standardised, vary amongst providers and are often lengthy and complex.

He said the LIV had produced a check list for clients and legal practitioners to run through before they enter into an accommodation bond agreement. It is available on the LIV website at www.liv.asn.au

“It is important that the Government and legal practitioners do all they can to protect the elderly as they grapple with the complexities of residential care options,” he said.