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11.1.5 Accommodation Bond Transitional Provisions

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Transitional provisions for backdating claims

The backdating of income support claims is intended to assist aged care residents who, for reasons beyond their control, delay lodging a claim for pension during the transitional period. The pension must become payable because of one of the following accommodation bond exemptions:

Example of circumstances where the backdating provisions would not apply

If the pension only became payable because of the exemption of the bond and the making of a gift, then no backdating can occur.

Enters care on or before 1 July 2005

Where a person is in care and has paid a bond on or before 1 July 2005 and an income support pension becomes payable as a result of the accommodation bond exemptions, a person may have their claim backdated to 1 July 2005 if:

  • the claim is lodged between 1 July 2005 and 30 September 2005 (inclusive), or
  • if special circumstances exist and the claim is lodged between 1 October 2005 and 30 June 2006 (inclusive).
Enters care after 1 July 2005

Where a person pays a bond after 1 July 2005 and an income support pension becomes payable as a result of the accommodation bond exemptions, a person may have their claim backdated to the date the bond was paid if:

  • the claim is lodged between 2 July 2005 and 30 September 2005 (inclusive), or
  • if special circumstances exist and the claim is lodged between 1 October 2005 and 30 June 2006 (inclusive).
What constitutes special circumstances

There is no definitive description of what constitutes special circumstances. A Federal Court decision held that it is not possible to set out a complete list of the relevant factors to be taken into account in determining whether special circumstances exist. Each case must be considered on its own merits but the special circumstances provisions should be considered to apply unless there is compelling evidence to suggest that they should not apply.    

When the transitional provisions should not be applied

The accommodation bond special circumstances transitional provisions should not be applied to claims:

  • made outside the transitional periods, and
  • where the income support pension did not become payable as a result of the accommodation bond exemptions.


An accommodation bond is an amount of money paid by Low Level Care and Extra Service Care residents in an aged care facility. An accommodation bond may be paid as a lump sum, or by periodic payments, or a combination of both lump sum and periodic payments.

The provider can deduct a monthly retention amount, for a maximum of 5 years, from the accommodation bond. The monthly retention amount is a fixed amount specified in the accommodation agreement and cannot exceed the capped maximum amount applicable at the time of entry to the facility. The provider also retains any interest derived from the bond.

The balance of the lump sum accommodation bond is refundable to the resident or their estate on departure.  The refunded accommodation bond balance is an assessable asset.

If there is a liability under the accommodation bond agreement for the bond to be paid wholly, or partly by periodic payments and the former principal home is rented out, then both the former home and the rental income are exempt from the income and assets tests.

 

 

One element of the means test for income support pensions whereby the rate of pension payable to a pensioner reduces progressively as their assets increase above a certain threshold known as the assets value limit (AVL).