Section 52P-1 of the Aged Care Act 1997 and section 69 of the Fees and Payments Principles 2014 (No. 2), outline the timeframes and procedures by which approved providers of residential aged care must refund lump sum payments for accommodation, such as bonds and refundable accommodation deposits (RADs). Approved providers are required to refund these amounts to the correct person and until the amount is refunded, it will be earning interest, which is paid as a component of the refund, and which goes to the departing resident of their estate.
 
Interest is payable at two different rates. In the situation where a resident has died, interest is payable at the base interest rate (BIR) for the period from a person’s death until 14 days after the approved provider has been shown probate or letters of administration. The base interest rate that applies is the rate that was current on the day after the resident passed away.
 
After this time, the approved provider is required to pay interest at the maximum permissible interest rate (MPIR) until the RAD has been refunded. It is the MPIR that was current on the day after the last day of the BIR refund period that is applicable. Current and historic interest rates can be found at this link.

Example One:
Mrs Nguyen enters Doo Wred Nu Aged Care on 3 July 2020 and is not eligible for government assistance with her accommodation costs and wishes to pay by full DAPs. The provider will need to calculate the equivalent DAP to Mrs Nguyen's agreed room price of $550,000. This is done as follows:

(Agreed room price × MPIR) / 365
($550,000 x 4.10%) / 365 = $61.78/day DAP
 

Example Two:
Mr Green enters Doo Wred Nu Aged Care on 3 July 2020 and has been assessed as partially supported and has had a Daily Accommodation Contribution (DAC) for himself determined at $14.00/day. Mr Green, or his family on his behalf, wishes to pay this DAC as a lump sum or Refundable Accommodation Contribution (RAC). The provider will need to calculate the RAC equivalent to Mr Green's advised DAC of $14.00/day. This is done as follows:

(DAC advised by Services Australia × 365) / MPIR
($14.00 x 365) / 4.10% = $124,634 RAC

GGJ Consultants have developed a suite of template documents now in use by many Australian providers of residential care, home care packages, and Commonwealth Home Support Program services. The suite includes: Example Policies and Procedures Manuals; Audit Tools; and many other key documents, including Consumer Handbooks, Service Commencement Forms, and Risk Management Plans. The suite is based on the Aged Care Quality Standards and other program and legislative requirements.

Following the Department of Health's March 2020 release of the new Home Care Packages Program Operational Manual, and in response to the COVID-19 pandemic, this suite of documents has been updated.

Changes include:
-  revised policies and procedures, e.g. Risk Management (including Service Continuity and Service Transition in the event of      closure) and Infection Control;
-  revised Consumer Handbooks;
-  revised Forms (e.g. Service Commencement Form); and
-  updated legislative references throughout.

Many of JU&A's clients already use the GGJ documents, and the providers who also elected to get an "annual support subscription" should have already received their update advice. 

If you wish to receive further information about how this suite of documents may assist your business, please contact us. JU&A is delighted to offer to our clients a 5% discount on the purchase price of both the Example Policies and Procedures Manuals and Audit Tools from GGJ Consultants. A brochure order form can be downloaded at this link.