Aged Care Breaking News | Federal Court Orders “Asset Replacement Charge” prohibited by Aged Care Act

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On Friday 6 April, the Federal Court made its formal orders after receiving submissions from Regis and the Department of Health. The Court had previously published its reasons for determining that the “Asset Replacement Charge” (ARC) charged to residents in many Regis Aged Care facilities was inconsistent with the Aged Care Act 1997 and called for submissions from both parties before making its final orders.

The final orders are that:

  1. the ARC is a charge prohibited by s 56-1(e) of the Aged Care Act 1997 (Cth); and
  2. Regis pay the Department of Health’s costs fixed at $172,000.

As previously reported, this decision confirms the Department of Health’s interpretation of the law as set out in its guidelines published on 2 September 2016; that aged care providers should not charge care recipients any fees which are unrelated to the care and services provided to those individuals.