Aged care residents may recover accommodation bonds - but not yet

Source: MEDIA RELEASE: Slater & Gordon (28 May 2008)

The lawyers who recovered the accommodation bonds of residents of a collapsed Queensland aged care facility – Australia’s first claim under the Bond Security Act – say families of residents affected by problems at a Melbourne aged care home need to be aware of their rights.

The Bridgewater aged care facility at Roxburgh Park went into administration on May 23, reportedly holding $8.5 million in accommodation bonds.

Slater & Gordon lawyer Ben Hardwick says the Bridgewater case is similar to the situation that occurred in September last year following the collapse of Lifecare’s dementia aged-care facility at Carrara, Queensland.

In the Lifecare collapse, residents were also forced to find alternative accommodation at short notice. Fortunately this aspect is not the case with Bridgewater residents.

Slater & Gordon was retained by representatives of five former residents of Lifecare when – for the first time – an approved provider failed to repay a bond.

“Ultimately the residents recovered their bonds with the first successful group claim under the Bond Security Act,” Mr Hardwick said.

“Bridgewater residents and their families can take some comfort from the announcement by Ageing Minister Justine Elliot that resident’s bonds will be protected by the guarantee scheme under the Aged Care (Bond Security) Act 2006.

“But the critical trigger for the guarantee system to operate is the occurrence of an insolvency event as defined under section 6 of the Bond Security Act.

“The fact that the aged care facility has been placed into administration does not fall within the definition of an ‘insolvency event’ for the purposes of the Act.

“Should an insolvency event occur, recovery of the bonds still requires some vigilance.

“Representatives of Bridgewater residents will need to ensure that any deductions which have been made to accommodation bonds are valid and comply with the complex regulatory scheme surrounding the protection of the Accommodation Bonds.”

Slater & Gordon (ASX: SGH) is a national law firm established in 1935 to give average Australians access to their legal rights. Melbourne, Sydney, Perth, Brisbane, Adelaide, Canberra, Parramatta, Newcastle, Wollongong, Erina, Coffs Harbour, Broken Hill, Morwell, Ballarat, Geelong, Footscray, Dandenong, Frankston, Werribee, Reservoir, Ringwood, Bunbury, Nowra, and Southport.