In October 2011 the amendments to the Aged Care Act
1997 (Cth) commenced. Simultaneously, amendments to the
User Rights Principles 1997 (Cth) were also introduced.
The Principles combined with the Act deal with the key requirements
as to the payment and protection of accommodation bonds. (For more
information in relation to the amendments to the Act, see our June
The amendments to the Principles include:
the introduction of a fourth Prudential Standard, called the
Governance Standard which requires approved providers to establish
a governance system and Investment Management Strategy;
in respect of permitted uses of accommodation bonds:
expansion of permitted uses to allow recovery of business
losses within the first 12 months of operation; and
expansion of the definition of 'financial products' in
respect of investing accommodation bonds in 'aged care
investment schemes'; and
amendment to the Disclosure Standard to include further
The Governance Standard (point 1 above) will commence operation
on 1 February 2012 while the Amending Principles (points 2 and 3
above) commenced on 1 October 2011.
The Governance Standard requires approved providers to implement
and maintain a governance system for managing accommodation bonds
held on behalf of residents. The Governance Standard requires
approved providers to establish:
a governance system; and
an investment management strategy.
These systems are prescriptive as to key personnel and executive
obligations. Approved providers will need to review and if
necessary, re-draft, their current governance processes to meet the
standards required. Amendments to the Disclosure Standard
The amendments to the Disclosure Standard expand the matters
that must be disclosed to care recipients and prospective care
recipients and to the Department regarding accommodation bonds and
their management by the approved provider.
Further information now required to be provided to the
Department as part of the Annual Prudential Compliance Statement
and to care recipients generally includes information as to how
accommodation bonds have been spent, investments that have been
made and compliance with the permitted uses of bonds.
Contact Gadens if you would like assistance in understanding how
these changes may affect your operations or to review your
processes for compliance with the new Governance Standard.
What happens if a patient, particularly a mental health patient,.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).