1.1.R.113 Refundable deposit, refundable deposit balance
This definition applies to all payments.
Definition: refundable deposit
This term is defined in the Aged Care Act 1997. A refundable deposit is a lump sum amount that may be paid for entry to residential aged care homes from 1 July 2014. It does not accrue daily and is paid as a lump sum.
The amount of the refundable deposit is not a determinant for home ownership.
Example: A single pensioner who retained their former home on entry to an aged care facility (nursing home) will continue to be treated as a home owner regardless of the amount of refundable deposit paid. In this situation, the former principal home is exempt from the assets test for up to 2 years from the date of entry into the care situation. The exemption period may be extended under certain circumstances.
Policy reference: SS Guide 220.127.116.11 General provisions for exempt assets, 18.104.22.168 Exempting the principal home - care situations
Definition: refundable deposit balance
This term is defined in the Aged Care Act 1997. The refundable deposit balance is the difference between the amount of the refundable deposit and amounts which are permitted to be deducted from the refundable deposit.
Assessing the refundable deposit balance from 1 July 2014
Refundable deposits are exempt from the social security assets test regardless of when they are paid. However, under the aged care assets test refundable deposits are included in the asset test for the purpose of determining someone's contribution to their aged care costs.
Act reference: SSAct section 9(1D) To avoid doubt, none of the following is a financial investment…, section 1118(1) Certain assets to be disregarded in calculating the value of a person's assets