Aged Care Act requirements for Resident Agreements
The Aged Care Act 1997 (Act) says a provider must give all prospective residents or their representatives an accommodation/resident agreement (Agreement) prior to entering care. The Agreement must set out that the person must choose to pay the accommodation payment or accommodation contribution by daily payments (DAP), refundable deposit (RAD), or a combination of both within 28 days of entry.
The Act also states that a provider must enter an Agreement with a person either before, or within 28 days after the person enters the provider’s service. Special provision is made for residents who require a legal representative.
Unsigned Resident Agreements
So, what happens when a resident enters a care facility but does not sign the Agreement within 28 days of entry, or any time after that?
The issue may be resolved by simply writing to the resident and explaining the importance and benefits of the Agreement, and asking for it to be signed and returned as soon as possible. If the resident has lost the capacity to sign, the provider may apply to the State Administrative Tribunal for a representative to be appointed for the purpose of signing the Agreement.
What happens where the Resident Agreement is unsigned and monies are owed?
Where the Agreement remains unsigned, the resident will often still be making payments in accordance with the terms of the Agreement. But what happens where an Agreement is unsigned and the resident fails to make payments and continues to stay at the facility?
In these circumstances, a provider may have a contractual remedy. The fact that the Agreement is unsigned does not mean that it is not binding. A provider has a contractual right to terminate an Agreement for a fundamental breach of contract, which includes non-payment of fees and charges. To support this procedure, providers can include a clause that the Agreement will terminate if fees and charges remain unpaid after a certain period for reasons within the resident’s control. However, the User Rights Principles 2014 dictate that a provider must not take action to make the resident leave the facility before suitable alternative accommodation is available that is both affordable and suitable for their needs
In the event that an Agreement remains unsigned and/or fees and charged remain unpaid, a provider may wish to consider commencing a claim to recover the debt that has accrued since the resident’s entry to the facility.
What practical steps can a provider take?
There are steps a provider may take to reduce the risk of this situation from arising. Firstly, ensuring that the proper financial investigations are undertaken and that the requirements to decide on payment and sign the agreement are clearly explained. Secondly, attempting to have the Agreement signed prior to the resident entering the facility (note that this cannot be a requirement, as the Act gives the resident 28 days from entry within which to sign, but it can be encouraged as a usual practice). Thirdly, including a clause in their Agreement whereby the resident is deemed to have agreed to the terms and conditions of the Agreement if they do not sign it within the 28 day time limit.
Please note that for all of the abovementioned options, we recommend that you seek legal advice to ensure that it is the best option for your business and that in doing so you comply with all applicable legislative provisions.
