Charging fees for additional care and services in residential aged care, including ‘capital refurbishment’ type fees

Page last updated: 02 September 2016

Information for approved providers of residential aged care homes

The department is aware that an increasing number of providers have been charging, or are proposing to charge additional services fees, including ‘capital refurbishment fees’, ‘asset replacement contributions’ and similar other fees. The purpose of the below information is to provide information about your responsibilities to residents and prospective residents when charging fees for additional care and services.

This information complements the ‘Care and services in aged care homes: Information for approved providers’.

This information does not constitute legal advice. Approved providers should seek their own independent advice.

Legislative context

The Aged Care Act 1997 (the Act) and the Aged Care (Transitional Provisions) Act 1997 (the Transitional Provisions Act) regulate the amount of fees that aged care providers can charge to residents. Relevant provisions are found in Division 52C and Division 56 of the Act and Division 58 and Division 57 of the Transitional Provisions Act.

These provisions require that fees charged for, or in connection with, residential care, or for care and services specified in the Quality of Care Principles 2014 (the Principles) cannot exceed the maximum calculated under Division 52C of the Act and Division 58 of the Transitional Provisions Act.  Fees charged for ‘other care or services’ must be agreed with the resident beforehand and the provider must give the resident an itemised account of the other care or services.

The department considers that these provisions mean that providers are not able to charge fees above the maximum amount worked out under the Act and Transitional Provisions Act for services or activities that are part of the normal operation of an aged care home, or are required to be delivered as part of a provider’s responsibilities. Fees for ‘other care or services’ can also not be charged unless the resident receives a direct benefit or has the capacity to take up or make use of the services.

This differs from extra service fees that are charged for rooms within aged care homes (either individual rooms or across the home) that have been granted extra service status by the department. Extra service fees are for higher standards of food, accommodation and hotel-type services but not for care.

‘Capital refurbishment fees’

The department considers that ‘capital refurbishment fees’, ‘asset replacement contributions’ and similar fees would not be supported by the legislation where the fee does not provide a direct benefit to the individual or the resident cannot take up or make use of the services, or where the activities or services subject to the fee are part of the normal operation of an aged care home and fall within the scope of specified care and services.

What types of services cannot attract additional fees?

Providers cannot charge additional fees for:

  • items listed in Schedule 1 of the Principles (some exceptions apply for items in Part 3); or
  • other services or activities that would form part of the general operation of the aged care home; or
  • services that are required to be delivered as part of a provider’s responsibilities.  

Examples of ‘other care and services’ for which charging of additional fees to residents is not permitted include, but are not limited to:

  • maintenance inside and outside the aged care home;
  • any repairs or replacements necessary because of normal wear and tear;
  • general refurbishment of the resident’s room after they have left the aged care home;
  • services or activities that would form part of the general operation of the aged care home, or are required in order to deliver residential care to the individual;
  • employment of administration staff where the staff member is primarily undertaking activities related to the general operation of the aged care home; and
  • capital costs, asset management or replacement.

Obtaining agreement for additional services and fees

It is a provider’s responsibility to obtain agreement from residents before delivering any care or services for which you propose to charge additional fees.

In some circumstances, additional services and their itemised costs may be listed in resident agreements, whereby the provision of ‘other care and services’ will be agreed to as part of the person’s entry into the resident agreement.

  • Where the provision of ‘other care and services’ for additional fees are included in resident agreements, it is not sufficient to only state the overall cost. You should list the individual goods or services to be offered and the itemised cost for each of these.
  • Residents must continue to be provided with itemised accounts for the periods in which they received or were able to access the additional services they agreed to be charged for.
  • Even where a resident has agreed, as part of their resident agreement, to the provision of ‘other care and services’, you may only continue to charge for those services while the resident is able to access or benefit from them. In practice, this means that you will not be able to continue charging additional fees if a change in the resident’s circumstances (e.g. a reduction in mobility) prevents them from being able to take up or make use of the service/s.

If fees for additional services are not included in the resident agreement, then providers should ensure that residents are given a list or schedule of the services available and the cost of each item. It is a provider’s responsibility to provide residents with an itemised account and this should be provided for each period (e.g. month) in which the resident purchased goods or accessed services.

Contents and frequency of itemised account

It is a provider’s responsibility to give residents an itemised account of any ‘other care or services’ for which they are charged over the maximum amount of resident fees. Division 52C of the Act and Division 58 of the Transitional Provisions Act also require that resident fees cannot be charged more than one month in advance. The itemised account should contain a break‑down or list of the individual services and an itemised cost for each service. It is not sufficient to group the services together and state an overall cost; this is not considered to be an itemised account.

The frequency with which providers give residents an itemised account for ‘other care and services’ must be agreed between the provider and resident. However, itemised accounts should be provided within a reasonable period (e.g. monthly if you are charging fees on a monthly basis).

The itemised account should include a list of the services and itemised cost delivered during the period (e.g. the services utilised by the resident during the month).

What if I am currently charging additional fees?

It is a providers responsibility that any fees they are currently charging or proposing to charge for ‘other care or services’, including ‘capital refurbishment fees’, ‘asset replacement contributions’, or similar fees, are consistent with the provider responsibilities under the Act and those outlined above.  

Contacts

If you have any queries about this information, email:  agedcarefeesandpayments@health.gov.au or post to:

Director

Fees and Payments Section, Department of Health

MDP 560, GPO Box 9848

Canberra ACT 2601

More information

Care and services in aged care homes: Information for approved providers

This information does not constitute legal advice. Approved providers should seek their own independent advice.