Aged Care Service Agreements: Legal Checklist

Aged care paperwork is usually produced at the worst possible moment — after a fall, during a hospital discharge, or when a room has finally become available and a decision is wanted the same week. The package is often thick, the language is unfamiliar, and the person being asked to agree may be unwell. This article is a contract-review checklist for that moment.

It covers what the documents are, who can lawfully agree to them, what the agreement must contain under the current framework, what can be negotiated, what should be questioned, and when a short legal review is worth the cost. It is written for permanent residential aged care in Victoria under the Aged Care Act 2024 (Cth) and the Aged Care Rules 2025 (Cth) as they apply from 1 November 2025.

Service agreement, not resident agreement

The document families search for is the "resident agreement". That is the former terminology. From 1 November 2025 the current document is a residential aged care service agreement. The older name still appears in brochures, older files and search results, and remains relevant to agreements entered into before that date.

Department of Health, Disability and Ageing guidance sets out how the transition works:

• where a resident entered into a resident agreement before 1 November 2025, the provider must review and vary it, or enter into a new agreement meeting the service agreement requirements, before 1 November 2026;
• where an existing permanent resident has no agreement at all, a service agreement must be entered into before 1 November 2026, consistent with the arrangements already in place; and
• where the resident does not agree to the new service agreement, the provider must be able to demonstrate reasonable attempts to negotiate and reach mutual agreement, and the terms of the previous resident agreement remain in effect in the meantime.

For an existing resident, that last point matters. A resident who is unhappy with a proposed new agreement is not obliged to accept it on the spot, and the earlier agreement does not simply lapse while the discussion continues. Ask for the proposed document in writing, ask which terms have changed from the existing agreement, and take advice on the differences rather than the document as a whole.

What is in the admission package

An admission package for permanent residential care commonly contains several distinct legal documents bundled together. Sort them before reading them:

• the residential aged care service agreement — the primary contract with the registered provider;
• the accommodation agreement — the room, the agreed room price or accommodation contribution, and how it is paid;
• a higher everyday living agreement, if services above the standard are offered and the resident wants them;
• direct debit or payment authorities, which determine what can be taken from an account and when;
• privacy, information-sharing and communication consents, which determine who the provider may talk to and what it may disclose;
• care and service information and house policies, which may or may not be incorporated into the contract; and
• authority or representative documentation — copies of enduring powers of attorney, VCAT orders or supporter registrations, and forms nominating who the provider deals with.

The service agreement and the accommodation agreement are different documents doing different jobs, even where a provider presents them as parts of one booklet. A resident in permanent care must have an accommodation agreement as well as a service agreement. Short-term and respite arrangements do not necessarily involve the same accommodation documentation, so do not assume a respite stay and a permanent admission generate the same paperwork.

In broad terms, the service agreement addresses the right to occupy a bed, the funded care and services to be provided, the fees and contributions the resident may be asked to pay, rights and responsibilities on both sides, the complaints and feedback process, termination, and any individually agreed matters. The accommodation agreement addresses the room, the agreed room price or accommodation contribution, and the method of payment.

Entering the service agreement

The provider must work with the resident to prepare the service agreement, and must make sure the resident understands and agrees to the fees and conditions before or on the day services begin. The obligation to explain sits with the provider, not the family.

Signature by both parties is preferable and is the best evidence of what was agreed. Current Department guidance recognises, however, that a resident may in some cases agree without signing, and that an agreement can be entered into verbally provided the provider records the interaction and the agreement as part of its record keeping. Practically, that cuts both ways: it means the absence of a signature does not necessarily mean there is no agreement, so be careful about what is said as well as what is signed.

We do not suggest there is a freestanding legal entitlement to take the documents away for a set review period. What we suggest instead is straightforward and usually accepted:

• ask for the complete package — every document, schedule and policy referred to — in advance of the admission date;
• ask the provider to explain anything unclear, in writing where the answer matters;
• agree to what is necessary for care to start, and decline to agree to optional documents — higher everyday living services, broad consents, standing payment authorities — until they have been explained or advised on; and
• record what you were told, by whom and when, particularly where a verbal assurance differs from the written term.

Urgent admissions do sometimes require prompt decisions. The answer is to separate the decisions: the care and the room are rarely the problem; the optional extras, the consents and the payment authorities usually are.

The 28-day withdrawal right

The current position for the service agreement is a single, simple right, and it is worth stating precisely:

• the resident may withdraw from the service agreement within 28 days after entering into it;
• notice may be given verbally or in writing;
• the agreement then has no effect;
• the resident remains liable for any fees or charges payable for care and services actually provided under the agreement; and
• the provider must refund any other amount the resident paid under the agreement.

The agreement itself should state this clearly. If it does not, or if it states something different — a shorter period, a requirement that notice be in writing, or a forfeiture of amounts paid — that is a discrepancy to raise before agreeing.

This right attaches to the service agreement. Do not assume it unwinds the accommodation agreement or every ancillary admission document. Each document, and any cancellation or termination right it contains, has to be checked on its own terms. There is no equivalent statutory cooling-off right in the accommodation agreement, so any trial period, refund promise or cancellation right offered in relation to the room should be recorded in the document itself rather than relied on as a verbal assurance.

Mandatory content and 12-monthly review

A service agreement must be in plain language and must cover a prescribed list of matters. Use the list as a completeness check before agreeing:

The agreement is not a one-off document. It must be reviewed at least every 12 months, and additionally where the resident's care needs change or the resident asks for a review. After a review is finalised, the provider must give the resident a copy of the updated agreement as soon as possible. Keep every version: the history is what resolves later disputes about what was agreed and when.

Fees, accommodation and payment terms

This article does not model costs. Rates, thresholds and interest rates change, and the comparisons belong with a financial adviser. For how the money side works, see our guide to aged care costs, RAD, DAP and the fee reforms. What follows is the contract-review view: identifying the categories, and checking that each one is properly documented.

At a high level, the categories to identify are:

• the basic daily fee, payable by residents generally;
• for residents under the 1 November 2025 arrangements, any assessed hotelling contribution and non-clinical care contribution;
• for transitional residents, preserved earlier arrangements — which may include a means tested care fee or pre-1 July 2014 bond and charge arrangements — rather than the new contributions;
• a higher everyday living fee, but only where there is a compliant separate agreement for services above the standard;
• an accommodation payment for residents paying the agreed room price, as a refundable accommodation deposit, a daily accommodation payment or a combination;
• an accommodation contribution for supported residents, as a refundable accommodation contribution, a daily accommodation contribution or a combination; and
• under the post-1 November 2025 arrangements, possible retention from refundable lump sum balances and indexation of eligible Daily Accommodation Payments (DAPs), both of which should be described in the accommodation agreement. Daily accommodation contributions (DACs) are not generally subject to DAP indexation, although an indexed DAP may affect a DAC where the DAC is capped by the agreed room price.

The contractual questions to ask of the documents are:

• is every fee category the resident may be asked to pay identified, and is every payment authority accounted for?
• are optional higher everyday living services itemised, with prices, rather than described as a package?
• can the resident end or vary an optional arrangement, on what notice, and without affecting the room?
• are indexation of eligible DAPs, retention, authorised deductions and any drawdown of daily payments from a lump sum balance explained in the document?
• is the late-payment interest rate or calculation method stated, and are the consequences of non-payment clear?
• does the paperwork avoid imposing personal liability on a family member or attorney, whether as guarantor, "responsible person" or account holder?

A clause charging for "additional services as determined by the provider from time to time" is not merely loose drafting to be tightened. A charge needs an applicable lawful basis and clear agreement to it. If the provider cannot identify what the charge is, what it is for and how it was agreed, the answer is not a better sentence — it is that the charge should not be there.

Capacity, support and signing authority

Most disputes we see about aged care paperwork are not really about the paperwork. They are about who was entitled to agree to it. Three questions, in order: does the resident have capacity for this decision; if not, what exactly is the decision; and who has authority for a decision of that kind?

• Capacity is presumed. An adult is presumed to have decision-making capacity. Capacity is decision-specific and time-specific, and reasonable support — plain explanations, an interpreter, a quiet room, a better time of day — must be considered before concluding that a person cannot decide.
• The resident decides where they can. If the resident can make the decision with support, it is theirs to make, even where family members disagree with the outcome.
• A registered supporter is not a substitute decision-maker. Registration under the federal aged care framework supports the resident's decision-making and communication with the provider. It does not by itself confer unrestricted authority to make decisions for the resident.
• An enduring attorney's authority depends on the instrument. Check whether the appointment has commenced, whether it covers financial matters, personal matters or both, and what conditions or limitations it contains.
• Match the authority to the decision. Financial authority may cover the contractual and payment aspects, while decisions about where the person lives and the personal arrangements of their care may require personal-matters authority or an appropriately empowered guardian.
• VCAT appointments are bounded by the order. An administrator deals with financial and legal matters within the terms of the order; a guardian deals only with personal matters within the terms of the order. Neither has general authority to do whatever the family thinks best.
• A medical treatment decision maker is not a contracting party. That role concerns medical treatment decisions and does not, merely by existing, confer authority to enter the service agreement or the accommodation agreement.

A Victorian attorney does not simply act in the principal's "best interests". Under the Powers of Attorney Act 2014 (Vic), the attorney's duties include acting honestly, diligently and in good faith, avoiding conflicts of interest, supporting the principal's participation in decisions, giving effect to the principal's wishes so far as this is possible, and acting in a way that promotes the principal's personal and social wellbeing. Those duties are the yardstick if the decision is later questioned. For the framework, see our guides to powers of attorney in Victoria, powers of attorney for aged care decisions and the Victorian medical treatment decision maker regime.

Practical points that repeatedly cause trouble:

• Multiple attorneys. A Victorian enduring power may appoint more than one attorney jointly, jointly and severally, severally, or by a majority. Who may act, and what happens if an attorney is unavailable or ceases to act, depends on the terms of the instrument and the applicable statutory rules. Check the instrument before any attorney signs alone.
• Conditions in the instrument. An appointment may require consultation, exclude certain transactions or commence only on a stated event. A provider is entitled to assume nothing about this.
• Proof of authority. Providers can and should ask for a copy of the instrument or order. Producing a clean, current copy at the outset avoids delay and later argument.
• Conflicts of interest. An attorney who is also a beneficiary of the estate, a co-owner of the home to be sold, or the person who would otherwise house the resident should identify the conflict and take advice before committing to large lump sum decisions.
• Signing capacity. An attorney or representative should sign expressly in a representative capacity, naming the resident or principal and the authority relied on. Whether a representative becomes personally liable depends on the proper construction of the agreement and whether they are identified as, or agree to obligations as, a contracting party, payer, guarantor or indemnifier. Check the document to ensure the representative is not personally designated as responsible for the resident's fees and has not agreed to a guarantee, indemnity or other personal obligation; ambiguous or express personal-liability provisions should be identified and advised on before agreement. Where an accommodation-related decision touches the sale of a home, our conveyancing and property team can coordinate with the attorney and the adviser.

Where family members disagree, the answer is not volume. Identify the resident's capacity for the specific decision, identify the decision precisely, identify who holds authority for a decision of that kind, document the reasons, and where the disagreement persists, consider mediation or, if necessary, an application to VCAT. Where the disagreement has a financial edge to it, our guide to elder financial abuse in Victoria sets out the warning signs.

The Statement of Rights and contract terms

A copy of the Statement of Rights and of the Code of Conduct must be included in the service agreement. The accurate contractual proposition is a narrow one: a contract term cannot displace the statutory obligations the Aged Care Act 2024 (Cth) imposes on the provider, and a term drafted to do so may be ineffective to that extent.

That is not the same as saying every right in the Statement gives the resident a standalone civil claim for damages if it is not met. The Statement's practical force is through the provider's obligations, the regulatory framework and the complaints system rather than through private litigation. For the full analysis of what the Statement contains and how it is enforced, see our article on the Statement of Rights under the Aged Care Act 2024.

Security of tenure and being asked to leave

Security of tenure is one of the most misunderstood parts of an admission package. A provider may ask a resident to leave only in the circumstances prescribed by the Aged Care Rules 2025 (Cth), and the agreement must make those circumstances clear. They include:

• the residential care home is closing;
• the accommodation and care provided no longer suit the resident's assessed long-term needs;
• an aged care assessor decides the resident no longer needs residential aged care;
• the resident has not paid agreed fees for 42 days after they were due, for a reason within the resident's control;
• the resident intentionally caused serious damage to the home, or injury to a staff member or another resident; and
• the resident was absent from the service for a specified period for reasons that are not permitted.

A resident cannot simply be moved on because their care has become more complex or more expensive. Where the ground relied on is that the home can no longer meet the resident's long-term needs, the provider must request a review by an aged care needs assessor, or the resident's needs may be assessed by at least two medical or other health practitioners, one of whom must be independent of the provider and chosen by the resident and both of whom must be competent to assess those needs.

Before asking or implying that the resident should leave, the provider must prepare a continuity of care plan and find suitable alternative accommodation that meets the resident's needs and is affordable to them. If the provider then decides to ask the resident to leave, it must give at least 14 days' written notice setting out the decision, the reasons for it and when the resident is to leave, detailing the resident's rights including access to an advocate, and enclosing a copy of the continuity of care plan.

Where non-payment is the issue, financial hardship assistance may be available, and the qualification that the reason must be within the resident's control matters. Where the notice is disputed, advocacy and the complaints pathways below are the usual first steps, and legal advice is worthwhile before the 14 days runs.

Departure, death, belongings and refunds

The end of the arrangement is dealt with badly in many agreements. Contract-review points:

• check the provisions for collecting belongings — the timeframe, who may attend, whether an inventory is prepared, where items are stored and what storage is charged;
• do not accept unreasonable automatic disposal of belongings after a short period, or storage fees that are unexplained or open-ended;
• check who may access the room after a death and the practical process for the executor or family to collect property; and
• check that the room-price, retention and deduction provisions are consistent between the accommodation agreement and any schedule or invoice.

On refundable amounts, only deductions authorised by the Aged Care Act 2024 (Cth) may be made from a refundable accommodation deposit or contribution balance before it is refunded. Refund timing depends on the departure circumstances — a permanent move to another home with notice, a permanent departure without a move, and death are treated differently. After a death, the balance is generally payable within 14 days after the provider sights probate, letters of administration or other satisfactory evidence of who is entitled to the refund, and statutory interest consequences can apply where the refund is late.

The balance is a debt owed to the deceased estate, and the executor's job is to prove entitlement, check the deductions and the interest calculation, and pursue the refund. For the detail, see our guide to refundable accommodation deposits in deceased estates.

Contractual red flags

None of the following is automatically void or unlawful. Each is a signal that something needs to be clarified, negotiated or advised on before the resident or their representative agrees:

• the wrong provider entity, the wrong home, or incorrect resident details;
• a room price in the agreement that differs from the price quoted or published;
• fee variation clauses that are unclear, or that allow the provider to vary charges unilaterally without a stated basis or notice;
• optional services presented as a condition of entry without an identified lawful basis;
• a personal guarantee, indemnity or "responsible person" clause making a family member or attorney personally liable;
• broad indemnities from the resident, or clauses excluding the provider's responsibility for care, safety or property;
• a direct debit authority drawn wider than the charges actually agreed;
• privacy and information-sharing consents extending beyond what the care and administration of the placement require;
• a unilateral right to transfer the resident to another room, or another home, without stated criteria or consultation;
• silence about responsibility for valuables, or an assumption that the resident carries all insurance risk;
• unexplained interest rates, collection costs, administration charges or default provisions;
• termination or "we may require you to leave" clauses inconsistent with statutory security of tenure;
• authority to deduct ongoing fees from a refundable accommodation deposit or contribution beyond what is authorised;
• vague or one-sided provisions about belongings and room access after a death; and
• inconsistency between the service agreement, the accommodation agreement, any higher everyday living agreement, the disclosure material and what was promised on the tour.

Questions to ask before agreeing

1. Please provide the complete package — service agreement, accommodation agreement, any higher everyday living agreement, consents, authorities and any policy the agreement refers to.
2. Is this the current service agreement under the arrangements that commenced on 1 November 2025, or an older resident agreement?
3. Which fees and contributions may the resident be asked to pay, and where is each of them set out?
4. Which services are standard, and which are optional and separately charged?
5. How are charges set and updated, what notice is given, and where is that policy?
6. What interest applies to late payments, and what happens if fees are not paid?
7. Where does the agreement record the 28-day withdrawal right?
8. What are the circumstances in which the resident may be asked to leave, and what assistance would be provided?
9. How is the resident's attorney, administrator, guardian or registered supporter recorded, and what will you accept as proof of authority?
10. Is any person other than the resident being asked to accept liability for fees, and if so, why?
11. What happens to belongings and to room access on departure or death, and on what timeframes?
12. What deductions may be made from a refundable accommodation deposit or contribution, and when is the balance refunded?

Complaints, feedback and advocacy

The service agreement must describe the provider's complaints and feedback system, and raising an issue internally in writing is usually the right first step because it creates a record. Free, independent advocacy is available through the Older Persons Advocacy Network (OPAN), which can attend meetings and help put a concern in terms the provider must respond to.

Where the internal process does not resolve the issue, a complaint can be escalated to the Aged Care Quality and Safety Complaints Commissioner. Outcomes vary with the facts and we do not promise any particular result. For how the process works and what to expect, see our family guide to the aged care complaints process.

When legal review is worthwhile

A full legal review is not needed for every admission. It is usually worth the cost where:

• someone other than the resident will be agreeing to the documents, and the scope of their authority is not obvious;
• the resident's capacity for this decision is genuinely in doubt, or family members disagree about it;
• a large refundable lump sum is involved, particularly where it is funded by selling a home;
• a family member is being asked to guarantee fees or accept personal liability;
• an optional services agreement is tied, expressly or in practice, to getting the room;
• an existing resident is being asked to move from a pre-1 November 2025 resident agreement to a new service agreement and the terms have changed;
• the resident has been asked to leave, or has received a notice; or
• a dispute has arisen about fees, deductions, belongings or a refund.

Our retirement living and aged care team reviews service agreements and accommodation agreements, confirms the authority of the person agreeing, and coordinates the decision with the resident's Will and estate plan, working with our powers of attorney and elder law practice. We give legal advice, not financial advice: the choice between lump sum and daily payment structures should be modelled by a financial adviser and accountant. For the retirement-village equivalent of this checklist, see our retirement village agreement checklist.

Official sources

• Aged Care Act 2024 (Cth) — current consolidation, including the Statement of Rights, fees and contributions and refundable deposit provisions.
• Aged Care Rules 2025 (Cth) — current consolidation, including service agreement requirements and the security of tenure provisions.
• Department of Health, Disability and Ageing — Service agreements for residential aged care — required content, entering into the agreement, the 28-day withdrawal period, review obligations and the transition from resident agreements.
• Department — Accommodation agreements for residential aged care — what an accommodation agreement must include.
• Department — Accommodation payments and contributions — payment and contribution options and retention.
• Department — Exiting residents from residential aged care — security of tenure grounds, assessment safeguards, continuity of care plans and the 14-day notice requirement.
• Department — Refunding lump sums in residential aged care — refund periods, authorised deductions and interest.
• Aged Care Quality and Safety Commission — making a complaint — how to raise a concern with the Complaints Commissioner.
• Older Persons Advocacy Network (OPAN) — free, independent aged care advocacy.
• Powers of Attorney Act 2014 (Vic) — enduring powers of attorney, supportive appointments and attorneys' duties.
• Guardianship and Administration Act 2019 (Vic) — capacity, and VCAT guardianship and administration orders.

Frequently asked questions