Residential care agreements - don't just say yes!

Here are some ideas which should be considered before signing the contract which you must be offered before entering a residential care facility (RCF).

Just sign on the dotted line!

Some tricks and traps in signing a residential care agreement.

Don’t just say ‘yes’

A residential care agreement should be offered by the approved provider before the care recipient enters residential care. The terms of the agreement are specified by the Aged Care Act (ACA).

However, because it is an agreement, and because the agreement must allow the parties to be on equal terms, the terms are not limited by the ACA and it is always possible to make additional suggestions and arrangements which, if agreed, must be included.

What must be included in the contract

  • a description of the residential care service, that is the name, address and other identifying features;
  • the levels of care and services which the approved provider is capable of providing;
  • the fee setting policies and practices of the provider
  • respite care arrangements (if applicable)
  • termination of residential rights and assistance which will be provided if that occurs;
  • complaint resolution arrangements;
  • resident's responsibilities
  • any other matters required by the User Right Principles (URP)

The process of making and signing the contract

There are a number of matters which are prescribed for the process of entering a residential care agreement-

Who signs?

  • the agreement must be in writing and signed by each party (or the residents representative);

You can change your mind

  • there is a 'cooling off' period of 14 days within which the care recipient may withdraw in writing;

Who will explain the contract ?

the care recipient (or representative) 'must be told of and helped to understand' the terms of the agreement including rights and obligations, services, fees and other charges, by the Provider.

Understanding – not just assurances

The requirement to help the intending resident to understand the agreement is not a requirement for independent advice, much less for legal advice. Perhaps it was thought by the drafter of this provision that being 'told of and helped to understand' was all that was necessary.

However, especially in a case where there is a 'cooling off' period, lawyers especially would know that it is essential to convey the meaning of the provision and the formal requirements for taking advantage of it. Remarkably, although the right to rescind within 14 days exists, there is no special obligation to be told of it, in the Aged Care Act or Principles.

Being helped to understand does not include advice about what issues are not dealt with and which should be in the agreement, for example, a concept with which lawyers are more familiar with. This is an important issue – see below.

Can I stay in this room permanently?

The agreement must provide for the care recipient's right to occupy a place at the residential at the residential care service either for a stated period or the remainder of the person's life time. The term 'place' is defined as 'a capacity within an aged care service for provision of residential care (or community or flexible care) to an individual'.

A contract may refer to 'Room 4, bed A' for example, but the ACA does not require it.

Security of tenure

One of the important responsibilities of providers is to provide security of tenure. Indeed, this is a most significant commitment to the care recipient and not to be treated lightly. The right to remain in the residential care service, which is what security of tenure means, is profoundly important for the health and well-being and state of mind of the care recipient.

It is anecdotally claimed that removal of an aged person from their familiar surroundings can seriously adversely affect their health and feelings of security and must be approached with great care.

To be moved for example, from a room with a view of the trees to a room with a view of the neighbor’s back wall, may be distressing to some people.

What issues are not dealt with in the agreement?

There are some important omissions which support the resident and his/her status as a consumer of services, which are not present in the mandatory inclusions in the residential contract. They are clauses which make it possible for residents to bring their own legal proceedings for failure to provide the stipulated rights and services which the Aged Care Act mentions.

Unless these matters are in the contract they are generally not enforceable except by the Department of Health and Ageing, its officers and inspectors. That allows for delays, refusal to deal with the complaint and at the end of it all, if the complaint is upheld, sanctions imposed upon the Provider, rather than compensation to the resident who may have suffered difficulty, discomfort, grievance or even neglect leading to injury or health problems.

Some of the important additional clauses should deal with rights and also with the quality of services. These are only some of the possible additions – there may be many more in each particular contract circumstance.

Read me my rights! What does the contract say?

The Aged Care Act states that everyone who is a resident has rights. The problem is that they are not enforceable unless they are in the resident’s contract. They include:

  • Full & effective legal and consumer rights;
  • Quality care
  • Full health information
  • Dignity and respect
  • Personal privacy
  • Live in a homelike environment
  • Move freely within and outside the facility
  • Free from reprisal for taking action on rights

How can a resident get "full and effective legal and consumer rights" if complaint is their only option?

What are the meals like?

The Quality of Care Principles contain a detailed description of certain types of services which must be available to residents as appropriate to their health and accommodation status in the Facility. Those services are –

  • Hotel services
  • Personal care services
  • Health care services
  • Lifestyle services

It is of little use for a complaint to be made, for example, that meals are always cold by the time they are served, or that there is insufficient nutrition in them to sustain continued health over time, if all that happens is that extra staff are employed after a period of delay and inquiry. It means that nothing is done to ‘right the wrong’ which has occurred.

How to get action on your complaint

To be able to take any action as an individual these matters must be referred to in the residential care agreement as being obligations owed to the resident signing the contract.

The Aged Care Provider should accept that the obligations in the Aged Care Principles which are enforceable by sanction by the Department of Health and Ageing should also be enforceable by the resident themselves, if they choose to take action. That is after all one of the Resident Rights, in any event.

Therefore the Provider should be asked to negotiate changes to the agreement to achieve the Resident's full and effective legal rights.  Doubtless reasonable Providers will agree to reasonable changes.

Arbitration and damages

In the event of a dispute arising over the performance of the Quality of Care commitments or the Resident Rights, the contract should also contain a clause allowing the Resident to call for mediation and if that fails, arbitration.  The arbitrator will be authorised, in the normal way, to award compensation for loss and injury.  Limits on claims may also be agreed.


#1 Peter Stewart 2016-12-13 07:57
Never sign a Residential Agreement before the day of entry. Otherwise it becomes an agreement between the facility and the provider