Accommodation Bonds for Extra Service Nursing Homes and Hostels

Accommodation Bonds for Extra Service Nursing Homes and Hostels

By Christine Hopper

Establishment costs for aged care facilities

The costs of building and equipping an aged care facility averages around $200,000 per bed in facility for, say, 60 residents; the cost of the land is additional.  Thus in Melbourne’s leafy suburbs the minimum cost of buying land, obtaining planning permits and constructing and equipping an aged care facility may be about $300,000 per bed.

Limits on resident contributions for aged care Accommodation Costs

An aged care hostel may require an Accommodation Bond from a Non Supported Resident or Partially Supported Resident.  The only restriction is that the amount of the Accommodation Bond must not exceed the new permanent resident’s ‘assessed assets’ less $40,500 (March 2012).

Help with determining your assessed asset amount is available just call Christine 03 9808 0338 at Financial Care Services to arrange an appointment.

Accommodation Costs for Supported Aged Care Residents

About one-quarter of all aged care beds are reserved for ‘Supported Residents’ who cannot be asked contribute a significant amount towards their aged care accommodation costs.

People with ‘assessed assets’ of not more than $40,500 (March 2012) are not required to contribute to the costs of their accommodation.  The Commonwealth pays a small subsidy to the facilities in respect of each of these ‘Fully Supported Residents’.

People with ‘assessed assets’ of more than $40,500 but less than $108,266 (March 2012) are required to make a small contribution to the costs of their accommodation.  The Commonwealth pays a lower subsidy to the facilities in respect of each of these ‘Partially Supported Residents’.

If you think that you qualify as a Fully Supported Resident or a Partially Supported Resident then you must complete the Permanent Residential Aged Care Request for an Assets Assessment (a blue and white A4 booklet containing 20 pages of Questions) and send it to Centrelink.  Help is available just call Christine 03 9808 0338 at Financial Care Services to arrange an appointment. 

Centrelink respond by mailing an Asset Assessment Certificate which you can show to your preferred aged care facility.  Note that an aged care facility must not allocate a Supported Resident bed to a new resident before receiving a copy of an Asset Assessment Certificate that qualifies the entrant for a Fully or Partially Supported Resident place.

Accommodation Bonds for Non Supported Aged Care Residents

New Non Supported Residents are people needing residential aged care who have at least $108,266 of ‘assessed assets’ (March 2012).

The Commonwealth does not insist that a potential Non Supported Resident submit a Permanent Residential Aged Care Request for an Assets Assessment.

But the aged care facility must be given either an Asset Assessment Certificate or a signed statement confirming that the potential Non Supported Resident has ‘assessed assets’ of at least $40,500 more than the agreed Accommodation Bond for an Extra Service High Care or Low Care place.

If the establishment cost for a new aged care bed is, say, $300,000 and one-quarter of all aged care beds are reserved for ‘Supported Residents’ then the manager of the aged care facility could be hoping for an average Accommodation Bond of $400,000 for each ‘non-supported’ bed in a hostel.  In practice, Accommodation Bond amounts vary widely.

Extra Service Facilities – Extra Service Sections of Hostels and Nursing Homes

Accommodation Bonds are required from all potential residents of Extra Service Nursing Homes and the Extra Service sections of other aged care facilities.  Each Extra Service facility sets its own scale of Accommodation Bonds and Extra Service Fees.

Thus Extra Service facilities can only accept Non Supported Residents with assessed assets of at least $40,500 more than the Accommodation Bonds sought by that Extra Service facility.

Extra Service facilities do not provide Commonwealth subsidized Supported Resident places but pay part of their Extra Service fees to the Commonwealth.

Accommodation Bonds at aged care facilities with commercial operators

Commercial aged care operators generally set fixed amounts of Accommodation Bond for each type of room in each facility.

For example, a good sized extra service nursing home room with a garden outlook could require an Accommodation Bond of $450,000; a smaller room with a less attractive outlook in the same facility could require an Accommodation Bond of $375,000.  The site manager might have discretion to reduce the Accommodation Bond for the lesser room if the prospective resident’s maximum Accommodation Bond amount (‘assessed assets’ less $40,500) were, say, $300,000.

Commercial aged care hostel managers could have more flexibility in negotiating Accommodation Bonds for hostel beds in areas of low demand but several competing aged care facilities.  Whilst an Accommodation Bond of $400,000 might be requested for a particular room, the manager might accept $300,000 or as low as $250,000 if the family choose to negotiate.  From a business viewpoint, the manager could prefer to have the addditional fee paying resident at a lower Accommodation Bond amount than a vacant room generating no income.

If your ‘assessed assets’ amount is well in excess of the Accommodation Bond amount agreed for your preferred room then you may just give the facility manager a signed statement that your ‘assessed assets’ exceed the agreed Accommodation Bond amount by, say, $50,000 and skip the Centrelink Asset Assessment process.

If the nominated Accommodation Bond amount for a vacant hostel bed is more than your ‘assessed assets’ less $40,500 then you could choose to reveal your asset value and attempt to negotiate an Accommodation Bond.  The facility manager could be pleased to have another resident at a slightly lower Accommodation Bond rather than another longer term vacant bed.

Accommodation Bonds at not-for-profit aged care facilities

In the not-for-profit sector the Accommodation Bond amounts could be based more on the prospective resident’s capacity to pay rather than the features of the individual rooms.

The governing committees of many not-for-profit aged care facilities have set their scales of Accommodation Bonds for each level of assessed assets and no adjustments or special deals are allowed.  Thus maximum non-negotiable Accommodation Bonds of $600,000 are not unusual for prospective residents of standard hostel places in Melbourne’s leafy suburbs who have assessed assets over $650,000.

You are entitled to be told the maximum Accommodation Bond which the facility wants for a particular room and/or for any new resident irrespective of the room allocated.  You are then free to accept the maximum Accommodation Bond amount and provide a signed statement that your assets exceed the maximum Accommodation Bond amount by, say, $50,000.

Alternatively you could just decline the offer of a place in that facility at that Accommodation Bond amount.  You might try to negotiate a lower Accommodation Bond in line with the Bond amounts requested for comparable hostels nearby.

If the maximum Accommodation Bond amount is more than your ‘assessed assets’ less $40,500 then you could choose to reveal your asset value and attempt to negotiate an Accommodation Bond.  Not-for-profit hostels are generally more willing to accept quite low Accommodation Bonds for new residents who have modest asset values.

Non-Supported Residents are not compelled to obtain an Asset Assessment Certificate from Centrelink or to show an Asset Assessment Certificate to any aged care facility.

However the management of an aged care facility could ‘demand’ that you disclose your approximate asset value as part of the Application for Admission process and/or Accommodation Bond discussion.  A good negotiator does not disclose their break point at the outset of a negotiation neither do most of us reveal our bank balance and borrowing capacity immediately on encountering a car salesman.

Alas, some not-for-profit facilities in rural communities ruthlessly demand both to see the Asset Assessment Certificate and then for the family to agree the maximum allowable Accommodation Bond.  Thus, these country hostels insist on an Accommodation Bond equivalent to the potential resident’s Assessed Assets less $40,500 for any local to stay in their community once residential care is needed.

Coming soon Assessed Assets on entering permanent residential aged care.

For a personal overview of the accommodation costs and daily fees applicable to your family member or help with estimating your assessed assets just call Christine 03 9808 0338 at Financial Care Services to arrange an appointment.