Residential Care Agreement - Explained


Aged Residential Care Agreement Contract Paperwork

What is the purpose of the Residential Care Agreement?

The Residential Care Agreement is the binding legal contract between the care recipient (the resident) and the aged care provider (the aged care home).

The contract describes the care and services that are provided to the care recipient, how much the services will cost, the manner in which the payments will be made, the rights of the care recipient and the responsibilities of the aged care provider.

The Residential Care Agreement is signed by both the care recipient (or their legal representative) and the authorised person representing the aged care provider.

Every care recipient must have a signed Residential Care Agreement completed and signed by both parties before the care recipient will be admitted to the aged care home as a permanent resident. However, it is common for a resident to begin a respite care stay in the aged care home and then to transition to permanent status while currently in the home.

What is in a Residential Care Agreement?

The Commonwealth stipulates the broad content of the Residential Care Agreement. The initial template of the contract document was developed by a legal firm and most aged care providers found it easier to use this template rather than create their own. However, many aged care homes have since modified that template and introduced their own clauses into the agreement, so there is now no uniform approach to the paperwork.

Permanent Residential Care Agreement (Template)

Download a template of the Permanent Residential Care Agreement (pdf 942 Kb)

Permanent Residential Care Agreement (Content)

The residential care contract must contain the following subject areas:

  • Care recipient personal details - name, previous address, billing address, emergency contacts
  • Aged care home name and approved provider details - name, street address, contact details and ABN
  • Room number and occupancy date
  • Income and assets summary
  • Fees, charges and costs - and chosen methods of payment (ie RAD vs DAP)
  • Signature page
  • Care and lifestyle services provided
  • Rules relating to accommodation and care payments and charges
  • Rules of occupancy
  • Charter of care recipient rights and responsibilities
  • Specified care and residential care services
  • Additional provisions
  • Guarantees and Indemnity
  • Acknowlegement of payment obligations
  • Cooling-off period and right to withdraw

Clauses to watch out for in your residential care agreement - Traps for young players!

We have identified a number of problem clauses that may be included in standard Resident Agreement documents.

They should be closely checked before you sign:

  • An aged care home cannot ask a "fully supported" resident to pay a "deposit" of say $10,000, that will be returned to the beneficaries upon the resident's passing. Illegal and unethical
  • There may be a clause that indicates that the appointment of a guarantor is compulsory. No way. There is no requirement in the Act that a guarantor has to be appointed. We suggest that the clause be struck out and there has never been an issue from providers if we do that
  • There may be a clause that indicates that the agreement is binding on heirs. We suggest that the words ‘the heirs’ be replaced by ‘your estate’
  • Check closely by comparing with Specified Care and Services that you are not being asked to provide items the care provider is obliged to provide as an included service eg. food
  • There is no provision in the Act that allows an aged care home to request a resident pay for the cost of cleaning the room except where the resident wilfully causes destruction or damage
  • Being asked to provide a copy of your will. Whilst this is in the interest of the estate and to some extent the service provider, there is no legislative basis to provide the will
  • If an aged care home holds personal information about you, it must allow you to access the information if you request it. The exception, in relation to health information, is if access would pose a serious threat to the life or health of any person. There are other limited exceptions (see National Privacy Principles)
  • The aged care home cannot charge a fee for lodging an application for access to your personal information. However, they can charge a fee for reasonable administrative costs such as photocopying and postage expenses. If you request your records from an organisation and they refuse you the right to access or correct your records, you can complain to the Australian Information Commissioner (1300 363 992) under section 36(1) of the Privacy Act 1988 (Cth)

Is it necessary to have a legal person review the Residential Care Agreement before your signature is applied?

Because the Residential Care Agreement is based upon a template - it is usually not necessary to seek legal advice concerning the contract. However, some of our family clients seek the peace of mind knowing that this legal review has been completed.

Residential care - security of tenure

The residential care agreement will define how the aged care home will continue to support you as your needs change, this is known as “ageing in place”. The agreement will also include details around when you can be asked to leave, how to exit the residential care agreement, and how to gracefully move to another aged care home.

Is there a cooling-off period?

Yes. If you change your mind and want to withdraw from the resident agreement, you have a 14-day cooling off period from the date you agreed. If you change your mind within this 14-day period you should let the aged care home know in writing straight away. You will still need to pay for any care fees and charges mentioned in the agreement for the period that you were in care. If you’ve made any other payments to your aged care home during that time, you are entitled to a refund.

What if I need help understanding the Residential Care Agreement?

The Residential Care Agreement is a legally binding document, so it’s important you understand everything in the document before you sign it.

If you have any questions, you should ask the aged care home. It’s their responsibility to make sure the agreements offered to you are clear and understood.

You can also ask your family, friends, carer or a legal practitioner to help you understand the terms of your residential care agreement. The proposed agreement may not automatically include all the things that you think are important, so it is a good idea to check.

If you’re having language difficulties because the agreements aren’t written in your preferred language, you can contact the Australian Government Translating and Interpreting Service on 13 14 50.

Residential Care Guide

Eligibility and Assessment
NEW Aged Care Homes
Residential Care FINANCIALS

Centrelink Form SA457 Explained
Centrelink Form SA485 Explained
Residential Care Agreement Paperwork
Age Pension Current Rates