Use RADS as intended, warns Janet Anderson

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The Aged Care Quality and Safety Commissioner, Janet Anderson PSM, has told residential aged care providers holding refundable accommodation deposits (RADs) they must comply with law.

“Approved providers must implement and maintain governance arrangements that ensure RADs are used only as permitted and refunded to care recipients correctly,” said Commissioner Anderson in a statement.

For example, the Aged Care Quality and Safety Commission stated providers can use RADs to make loans if:

  • it is not made to an individual;
  • it is made on commercial terms;
  • a written agreement is in place;
  • the money loaned will only be used for the following:
    • capital expenditure (as specified in the Principles),
    • investments in financial products (as specified in the Act),
    • refunding RADs, bond balances or entry contributions,
    • repaying debt accrued for the of capital expenditure or for refunding bond balances.

Commissioner Anderson warned in October last year that a proportion of residential care providers were not meeting their RAD refund obligations.

RAD inspections this month

“An analysis of prudential information indicates that some providers are using RADs to make loans, however, the data does not specify the purpose of the loan. In light of this, the Commission will run a targeted campaign to help providers better understand how they can use RADs and comply with the Governance Standard,” the new statement said.

The campaign will be conducted in May 2021 and will involve a site visit to selected approved providers based on Commission data. The campaign will determine whether providers are compliant with their statutory obligations for loan agreements using RADs, including that they are managed in accordance with the Governance Standard. If the review identifies non-compliance, the Commission may consider regulatory action.