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Nursing homes & hostels

Most need to consider housing choices for aged family or ourselves, as we get older. We will look at the differences between nursing homes and hostels, rights of residents in each facility and fees payable.


Nursing homes are for those who cannot cope with daily tasks of making meals, laundry, dressing, and need full time care by registered nurses or occupational therapists. Residents usually share rooms, except in homes that are more expensive.


Hostels suit those who need help with caring for themselves, such as showering, dressing, and medication. Most residents have their own room, but use common facilities for dining and recreation.


Aged Care Assessment Teams carry out assessments to know the level of care required before accepting potential residents for either a nursing home or hostel. If a potential resident needs high-level care then a nursing home is suitable whilst hostels suit low-level care environments.


The Aged Care legislation and Principles protect residents’ rights; deal with, fees payable, access to the facility’s financial information, and details about residence. Most rights and obligations are set out in contracts entered by the facility and the resident, which normally form one legal document and include:


This covers daily fees, level of care provided, and responsibilities of the parties. It sets out the services, which are available; how fees are set, complaints process, resident's responsibilities, and related matters. If a resident can pay for extra services and wants more luxurious housing, the agreement will include the extra fees, details of how fees are altered, standards of accommodation, services and food provided, etc.


This covers the charge amount, how fees are payable and level of housing the fees entitle the resident to receive.


This bond is payable as a lump sum on top of a daily charge. This bond is payable in a lump sum on top of the daily charge by a resident or exempt bed in a nursing home. For the fee to be charged, the government must certify the hostel, and the resident must not be a “concessional resident,” that is, one who has not owned a home in the two years before entering the facility. The amount of the bond is not fixed; is dependent on and calculated according of the resident’s total assets and is negotiable with the owner. The law provides a resident must have a minimum amount after the bond is paid.


The value of the resident’s assets determines the amount of this monthly payment. If a resident’s assets are under an indexed limit, there are no charges. The fee is non-refundable and payable for five years.


A means-tested monthly payment calculated by considering a resident's financial position, and if the resident receives a pension. All assets are included in the means test, including those, which have been disposed within a certain period before entering the facility. The means test is not applied and the minimum fee charged if the resident has dependent children or is an ex-prisoner of war veteran. The government does not regulate fees if a resident enters an exempt nursing home (Private and Not Government Funded).


The facility owner can retain part of the bond, calculated by reference to the months the resident has lived in the hostel on a monthly basis after indexation. The retention amount is deductible for only five years.


The facility owner must refund the bond (subject to any retention rights) within 2 months of the resident’s departure. If a resident wishes to move, then the bond payable to the new facility is the refund from the first bond. However, this move must occur within 28 days. The government has set up a prudential arrangement to protect bonds requiring the facility owner to sign an agreement with it. The agreement confirms bond refund; a resident’s ability to get information on the owner’s ability to repay the bond, the number of bonds repaid in the previous 12 months, and proof the owner has sufficient insurance to cover losses he sustains by fraud, or loss of earnings. Potential residents must ensure the facility owners have insurance to protect bonds. Although bonds are usually payable by lump sum, there is provision for instalments and for a 6-month deferral to allow the sale of a former residence. In these conditions, the owner can charge interest so it receives sufficient funds to reimburse for any delays.


The Aged Care Principles sets out services the facility must provide, such as maintenance, cleaning, laundry, and details of personal care such as bathing, dressing, meals, etc. If a resident wishes to pay for extra services or levels of services, they can be available. The standards of quality of care cover features such as health, personal care, skin care, dental care, and lifestyle, including privacy, independence, and controlling the physical environment, which include fire safety control, etc. These standards are general and act as a guideline for the care provided to residents.


The facility owner must set up a complaints process and use this process to resolve complaints. If any issue cannot be resolved through this process, there are other means to make a complaint. Residents can complain to the Department of Health and family services, the Health Services Commissioner, or using a lawyer.


In certain situations, the facility owner can require a resident to leave, which can include:

a)    Closure of the nursing home or hostel;

b)    The Aged Care Assessment Team assesses a resident no longer needs the care;

c)    The resident has not paid fees;

d)    The resident causes serious damage to the facility, or injures staff;

e)    The resident is absent on unauthorised temporary leave because of an emergency for more than seven days;

f)    The facility cannot meet the resident's health care needs. In this case, the Aged Care Assessment Team, or two medical practitioners must certify this is the case.


This summary refers only to hostels and nursing homes and does not refer to other forms of residential care services in Victoria, such as service departments or supported residential services.


Behan Legal assists and advises on these important issues. For an appointment, call 03 9646 0344 .

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