Option for paying bond

An accommodation bond can be paid as a lump-sum; as periodic payments or a combination of both.  It can also be deferred and paid out of the proceeds of the estate of a resident.

Where a person chooses to pay a bond as periodic payments, each payment will consist of a component to cover the drawdown the aged care facility could have made on the bond had it been paid as an equivalent lump sum, plus a component to cover the interest the facility could have earned on the bond had it been paid as an equivalent lump sum.  The interest rate at implementation on 1 October was 8.86% being the treasury yield rate for August.  This rate is subject to indexation and changes every month.  For the month of April 1998, the rate is 8.933%.