Mar 29, 2018

What You Should Know About Aged Care Facilities Charging Illegal ‘Asset Replacement’ and ‘Capital Refurbishment’ Fees

It was recently in the news the the Federal Court rules against aged care providers Regis Aged Care and Japara for charging their clients an “Asset Replacement Charge” fee.

The Federal Court confirmed the Health Department’s previous advice that residential aged care providers cannot charge the additional service fees that are known variously as ‘asset replacement charges’ or ‘capital refurbishment fees’, or fees with another name but having the same nature.

In the end they were forced to repay millions of dollars to aged care consumers for fees that were collected illegally.

Since then, the rules and regulations against additional fees like those have been changed so that others do not fall victim to it.

What is wrong with these additional fees?

The Health Department explains that ‘asset replacement charges’, ‘capital refurbishment fees’, ‘security deposits’ and similar fees are not permitted by aged care legislation.

Families should know that providers are not permitted to charge fees other than those set out by the legislation.

Capital refurbishment fees and asset replacement charges were essentially amounts charged to a resident for work to be carried out after the resident has left the facility – whether is be because they died or moved away.

It makes no difference when the amounts are actually paid during the resident’s stay or after they have left, or whether amounts are paid separately or deducted from a refundable deposit.

A security deposit is a lump sum that was required from certain residents, usually those who chose not to pay a refundable deposit or who paid a small refundable deposit, as security against future fees and charges. It makes no difference whether the provider allowed the resident to convert these into a refundable (accommodation) deposit.

Whether a resident pays their accommodation as a lump sum, a daily payment or a combination of both is entirely up to the resident. Apart from requiring fees to be paid up to one month in advance a provider cannot require the payment of any lump sum. These security deposits are not permitted in any way

What if I am currently charging ‘asset replacement’, ‘capital refurbishment’ or similar fees?

It is a provider’s responsibility to ensure that any fees they charge to residents are consistent with aged care legislation. By no means is it the resident’s or their families fault if they were charged in such a way.

The advice to providers who have charged or are charging such fees is that they should cease charging these fees and refund amounts already charged.

Previously, other providers aside from Regis and Japara also charged its clients similar fees but stopped when, in September 2016, the Department of Health warned that the practice was not supported by legislation.

What if I have been charged these sorts of fees?

Residents or their families who are being charged, or have been charged, ‘asset replacement charges’, ‘capital refurbishment fees’, ‘security deposits’ or similar fees should contact their provider in the first instance.

If you are not satisfied with the provider’s response you can contact the Aged Care Complaints Commissioner on 1800 550 552 or at the Complaints Commissioner’s website.

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  1. All blown out of proportion as far as I’m concerned. At this rate those of us with the means to pay for additional services won’t even have the option to do if the government continues down this path. You’ll get drab food, instant coffee, no hotel/like services, and all because the government want to control everything without giving thought to us, the residents. Imhsppy to pay for additional services – it’s what we want and yet again the government keeps taking away my choices by forcing providers to fall into line whilst they conitube to cut funding. The providers need to make decent revenue so they can build facilities for the future and meet my needs!! They need revenue as the government keeps cutting fundubg. I for one am happy to pay for additional services. Seems the government doesn’t know what it wants. If they keep this pressure up the providers will stop building new facilities, there won’t be enough beds and the situation will just get worse. And in the end it’s me, the resident that will suffer as everything about aged care service provision will be beige…just like this small minded, short sighted, out of touch government!


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