In support of that announcement, the Department referred to parts of the Aged Care Act 1997 (“Act”) and introduced new notions about the way the scheme operated. It said that an approved provider cannot charge a resident fees for the “normal operation” of the aged care facility. It also said that an approved provider cannot charge for additional services unless there is a “direct benefit” to the individual. However, the Department did not point to any specific section in the Act or its Principles that prohibited the charging of the capital refurbishment fees.

The Act does not specifically prohibit the charging of fees other than those the Act expressly allows for. To the contrary, the Act actually anticipates that there are other fees that can be charged as agreed between an approved provider and a resident, which are not specifically mentioned in the Act or Principles. In our view, approved providers and residents can lawfully agree for fees to be charged which are not expressly allowed for in the Act. Therefore, fees in the nature of the capital refurbishment fees which fall outside the scope of the regulated fees are lawful.

Russell Kennedy understands that there has been a lack of consultation by the Department with the industry in relation to this issue prior to the announcement being made on 2 September 2016. This is despite the Department being aware for many months that providers have been charging these types of fees. It is disappointing the Department has chosen to make an announcement without proper industry consultation and without articulating its reasoning more clearly.

The Aged Care Act is a very lengthy and complex piece of legislation. The Full Federal Court recently noted the complexity of parts of the Act in its decision Secretary, Department of Health v DLW Health Services Pty Ltd [2016] FCAFC 108. The Department’s announcement further highlights just how difficult it is for approved providers to have a clear understanding about their responsibilities given the Department’s new notions about how the Act operates. (You can read an earlier Alert on the Federal Court decision here).

If you are charging fees such as capital refurbishment fees you should obtain legal advice about your responsibilities under the Act and the Principles.

This article does not contain legal advice and should not be relied upon to charge fees which the Act does not expressly allow for. You should obtain your own legal advice before you charge these types of fees.