and for the partners of such people, certain amounts relating to refunds of such bonds, or to the proceeds of such sales, are excluded from the income and assets tests under this Act.

Note: Accommodation bond and accommodation charge have the same meanings as in the Aged Care Act 1997 : see subsection 5L(1) of this Act.

13 Scope of Part

(1)

This Part applies to a person if:

(a)

at any time from the beginning of 1 October 1997 until the end of 5 November 1997, the person became liable to pay an accommodation bond for entry to a residential care service; and

(b)

either an accommodation charge would have been payable for the entry, or the person would have been a charge exempt resident, had section 44-8B and Division 57A of the Aged Care Act 1997 been in force at the time of the entry; and

(c)

the person later made an agreement (a refund agreement ) with the provider of the service that the person's liability to pay an accommodation bond for the entry was to be replaced with a liability to pay an accommodation charge for the entry, and that any payment of any of the bond was to be refunded to the person.

Note: Accommodation bond , accommodation charge and charge exempt resident have the same meanings as in the Aged Care Act 1997 : see subsection 5L(1) of this Act.

(2)

This Part also applies to a person if the Commission is satisfied that:

(a)

on or before 5 November 1997, the person sold his or her principal home for the sole or principal purpose of raising money to pay an accommodation bond for entry to a residential care service; and

(b)

either an accommodation charge would have been payable for the entry, or the person would have been a charge exempt resident, had section 44-8B and Division 57A of the Aged Care Act 1997 been in force at the time of the entry.

Note: Accommodation bond , accommodation charge and charge exempt resident have the same meanings as in the Aged Care Act 1997 : see subsection 5L(1) of this Act.

(3)

This Part also applies to the partner of a person covered by subclause (1) or (2) (even if the person so covered is now deceased).

(4)

For the purposes of subclause (2), the time at which a person sells his or her home is the time when he or she comes under a legal obligation to transfer the home to the buyer.

(1)

For the purposes of this clause, assume that the person's exempt bond amount (see clause 16) were a financial asset of the person.

(2)

The person's ordinary income for a year is reduced by the amount of ordinary income taken to be received on the asset for the year, as worked out under Division 3 of Part IIIB of this Act (Deemed income from financial assets).

(3)

In working out that reduction, assume that the total value of the person's financial assets exceeded the person's deeming threshold ( deeming threshold is a term used in that Division).

For the purposes of this Act (other than sections 52FA, 52G, 52GA and 52H), the total value of the person's assets is reduced by the person's exempt bond amount (see clause 16).

(1)

The following is how to work out a person's exempt bond amount .

(2)

If the person is covered by subclause 13(1) (but not subclause 13(2)), the person's exempt bond amount is any amount of accommodation bond payment refunded to the person under the refund agreement mentioned in that subclause.

(3)

If the person is covered by subclause 13(2) (but not subclause 13(1)), the person's exempt bond amount is the gross proceeds of the sale mentioned in that subclause, less:

(a)

any costs incurred in the course of the sale; and

(b)

the amount of any debt the person or the person's partner owed immediately before the sale, so far as the debt was secured by the home at that time.

(4)

If the person is covered by both subclauses 13(1) and (2), the person's exempt bond amount is the greater of the 2 amounts worked out under subclauses (2) and (3) of this clause.

(5)

If the person is covered by subclause 13(3), the person's exempt bond amount is equal to the exempt bond amount of the person's partner, as worked out under subclause (2), (3) or (4) of this clause.

(6)

But in all of the above cases, if the person currently has a partner (who is not deceased), the person's exempt bond amount is half of what it would otherwise be.

Part 2A—Charge exempt residents under the Aged Care Act 1997

17 Meaning of charge exempt resident

In this Part:

charge exempt resident has the same meaning as in the Aged Care Act 1997 .

17A Persons who became charge exempt residents before commencement

(1)

This clause applies if a person first became a charge exempt resident before the commencement of this clause.

(2)

If, at any time after becoming a charge exempt resident but before the commencement of this clause, the person, or the person's partner, was earning, deriving or receiving any rent from the person's principal home from another person, any such rent earned, derived or received while the person is a charge exempt resident is not income in relation to the person, or the person's partner, for the purposes of this Act.

Note 1: For rent , see subsection 5N(2).

Note 2: Under subsections 5L(6A) and (7), and subclause (3) of this clause, the principal home of a person in a care situation may be a place other than the place where the person receives care.

(3)

A residence of a person is taken to be the person's principal home for the purposes of this Act during:

(a)

if:

(i)

the Commission is satisfied that the residence was previously the person's principal home but that the person left it for the purpose of going into a care situation or becoming an aged care resident; and

(ii)

at any time after leaving the residence but before the commencement of this clause, the person, or the person's partner, earned, derived or received rent for the residence from another person;

any period during which:

(iii)

the person is a charge exempt resident; and

(iv)

the person, or the person's partner, is earning, deriving or receiving rent for the residence from another person; and

(b)

any period during which the residence is, because of paragraph (a), the principal home of the person's partner.

Note 1: For rent see subsection 5N(2). For in a care situation see subsection 5NC(2). For aged care resident see subsection 5NC(5).

Note 2: This subclause is not meant to imply that a person may have more than one principal home at the same time.

17B Refunds of accommodation charge

(1)

Clauses 17C and 17D apply to an amount (the refunded amount ) that is refunded as mentioned in paragraph 56-1(kc) or 56-3(ic) of the Aged Care Act 1997 to a person because the person is or was a charge exempt resident.

(2)

Those clauses also apply to an amount (also called the refunded amount ) that is paid to a person under paragraph 44-8A(6)(b) of that Act because the person is or was a charge exempt resident.

(3)

To avoid doubt, those clauses do not apply if the amount is paid to the person's estate or to any other person.

17C Person's ordinary income reduced using financial asset rules

(1)

For the purposes of this clause, assume that the refunded amount were a financial asset of the person.

(2)

The person's ordinary income for a year is reduced by the amount of ordinary income taken to be received on the asset for the year, as worked out under Division 3 of Part IIIB of this Act (Deemed income from financial assets).

(3)

In working out that reduction, assume that the total value of the person's financial assets exceeded the person's deeming threshold ( deeming threshold is a term used in that Division).

17D Value of person's assets reduced

For the purposes of this Act (other than sections 52FA, 52G, 52GA and 52H), the total value of the person's assets is reduced by the refunded amount.

17E Application of Part

This Part applies in relation to a person who is a charge exempt resident at any time, whether before or after the commencement of the Part.

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