Aged Care Resident Agreements: A Legal Checklist Before You Sign

What is an aged-care resident agreement?

A Resident Agreement is the primary contract governing a person's stay in Australian Government-subsidised residential aged care. It typically covers:

• the services the provider must supply;
• the fees the resident must pay (excluding the accommodation payment, which is in the Accommodation Agreement);
• the resident's rights and obligations;
• the provider's rights and obligations;
• termination, security of tenure and complaints; and
• how variations to fees and services are communicated.

The Accommodation Agreement is a separate document covering the agreed accommodation price and how it will be paid — as a Refundable Accommodation Deposit (RAD), a Daily Accommodation Payment (DAP) or a combination. For an overview of how those payments work, see our guide to aged-care costs, RAD, DAP and the fee reforms.

Why families should review the agreement before signing

Aged-care agreements are usually presented at a difficult moment — a hospital discharge, a fall, a sudden change in capacity — when families are under time pressure and emotional strain. That is precisely when signing without review is riskiest. A short legal review does three things:

• identifies clauses that are inconsistent with the resident's statutory rights;
• translates fee, variation and termination provisions into plain English; and
• confirms that the person signing actually has authority to do so.

Where an attorney is signing on the resident's behalf, the review also creates a written record of the attorney acting properly and in the resident's best interests — which matters if the decision is later questioned by other family members or by VCAT.

Checklist: key clauses to check

Fees, RAD/DAP and payment terms

The Accommodation Agreement should record:

• the agreed accommodation price;
• the chosen payment method (RAD, DAP or a combination);
• the applicable Maximum Permissible Interest Rate (MPIR) at the date of the agreement, where a DAP applies;
• drawdown arrangements if any DAP is to be drawn from the RAD balance;
• timing of the RAD payment and any interim DAP that will apply until the RAD is paid; and
• refund arrangements on departure or death, consistent with the statutory framework.

The Resident Agreement should cover the ongoing fee structure — Basic Daily Fee, means-tested contribution and any additional-service or extra-service fees. Check that the fee schedule is complete, itemised and internally consistent. Vague or open-ended fee clauses (for example, "additional services as determined by the provider from time to time") should be tightened before signing.

Services, care, personal items and additional charges

The agreement should make clear what is included in the standard fees and what is charged separately. Common examples of items often billed as additional charges:

• hairdressing, beauty and personal grooming;
• private telephone, internet and pay-TV;
• outings, entertainment and lifestyle programs above the standard package;
• continence aids and consumables beyond a specified allowance;
• escorted transport to appointments; and
• guest meals and functions.

Additional-service fees can be substantial. Confirm whether the resident is required to take an additional-services package as a condition of entry (some providers link entry to a room to acceptance of an additional-services agreement) and whether the package can be discontinued later without losing the room.

Capacity and who has authority to sign

The right to sign a Resident Agreement or Accommodation Agreement depends on whether the resident has decision-making capacity for that specific decision. If they do, they sign personally. If they do not, someone else must have legal authority to sign on their behalf.

• Attorney under an enduring power of attorney (financial). Usually the cleanest route. The attorney must act within the scope of the appointment and in the principal's best interests. See our guide to powers of attorney in Victoria for the framework, and our powers of attorney and elder-law service page for the way we help attorneys navigate these signings.
• Medical treatment decision maker. Separate from financial authority; deals with medical treatment consent under the Victorian medical treatment decision-maker regime, not with signing the Resident Agreement itself.
• VCAT-appointed administrator or guardian. Required where no valid enduring appointment exists, the appointment is too narrow, or the appointment was made after capacity was lost. Applications can be made urgently but still take time to be heard.

Providers are entitled to see evidence of authority before allowing someone to sign on the resident's behalf. Producing a clean, current enduring power of attorney at the outset avoids delay.

What if family members disagree?

Disagreement between adult children about facility choice, funding of the RAD, sale of the family home or level of additional services is common. Practical protections:

• identify the person with legal authority (the attorney under a current enduring power of attorney) and confirm that they — not the noisiest family member — makes the decision;
• document the reasons for the decision in writing;
• hold a family meeting with the attorney's lawyer present where the decision is contentious;
• consider mediation before disputes escalate to VCAT; and
• review the resident's Will and estate plan so that later disputes over the inheritance do not spill back into the aged-care decision.

Red flags before signing

• Pressure to sign on the day of entry with no time to obtain independent advice.
• Fee schedules with open-ended additional charges or "as determined by the provider" language.
• Clauses purporting to waive or limit statutory rights under the Aged Care Act 2024 (Cth).
• Termination clauses giving the provider a broad right to end the arrangement on short notice.
• Requirement to accept an additional-services agreement as a condition of entry, with no clear exit.
• Unclear or missing RAD refund timeframes.
• Vague provisions about personal belongings and their removal on departure or death.
• Any request that the attorney sign a personal guarantee for the resident's fees.
• Requests to sign without evidence of the resident's capacity where capacity is doubtful.
• Inconsistency between the Resident Agreement, the Accommodation Agreement and any information memorandum or brochure.

What to ask the provider

1. Please provide the full Resident Agreement and Accommodation Agreement in advance.
2. What are all the fees the resident will be asked to pay, itemised, and how are they billed?
3. Which additional services are optional and which are effectively required?
4. How and when can fees or services be varied, and what notice will we receive?
5. What is the RAD refund timeframe on departure or death, and how are permitted deductions applied?
6. What is the complaints process, both internally and via the Aged Care Quality and Safety Commission?
7. What arrangements apply if the resident's care needs change and can no longer be met in this facility?
8. How do you record and communicate with the resident's attorney or family representative?
9. What happens to personal belongings on departure or death, including timeframes?
10. Can we take the documents away and return them signed once we have obtained independent legal and financial advice?

When to seek legal advice

We recommend obtaining independent legal advice — coordinated with the family's financial adviser — before:

• signing any Resident Agreement or Accommodation Agreement;
• an attorney signs on behalf of a parent whose capacity may be diminished;
• agreeing to an additional-services package tied to entry;
• funding a RAD from the sale of the family home — coordinated with our conveyancing and property team;
• agreeing to an unusual or non-standard clause proposed by the provider; and
• a dispute arises about fees, services, termination or personal belongings.

Our retirement living and aged care team reviews Resident Agreements and Accommodation Agreements on a fixed-fee basis, confirms the signing authority of the person committing to the arrangement, and coordinates the aged-care decision with the resident's Will and estate plan. For the retirement-village equivalent, see our retirement village agreement checklist.

Frequently Asked Questions