Aged Care Act 2024

A registered provider must not use a refundable deposit unless the use is permitted by this section.

A registered provider is permitted to use a refundable deposit for the following:

for capital expenditure of a kind prescribed by the rules;

to invest in a financial product (within the meaning of Division 3 of Part 7.1 of the Corporations Act 2001) covered by subsection (3);

to make a loan in relation to which the following conditions are satisfied:

the loan is not made to an individual;

the loan is made on a commercial basis;

there is a written agreement in relation to the loan;

it is a condition of the agreement that the money loaned will only be used as mentioned in paragraph (a), (b), (d) or (e) of this subsection;

the agreement includes any other conditions prescribed by the rules;

to refund, or to repay debt accrued for the purposes of refunding, refundable deposit balances, accommodation bond balances or entry contribution balances;

to repay debt accrued for the purposes of capital expenditure of a kind prescribed by the rules;

for a use prescribed by the rules.

A registered provider, and the responsible persons of the registered provider, may commit an offence if the registered provider uses a refundable deposit and the use is not permitted by this section (see section 178).

For the purposes of paragraph (2)(b), the following financial products are covered by this subsection:

any deposit‑taking facility made available by an ADI in the course of its banking business (within the meaning of the Banking Act 1959), other than an RSA;

a debenture, stock or bond issued, or proposed to be issued, by the Commonwealth, a State or a Territory;

a security, other than a security of a kind prescribed by the rules;

any of the following in relation to a registered scheme (within the meaning of the Corporations Act 2001):

an interest in the scheme;

a legal or equitable right or interest in an interest covered by subparagraph (i);

an option to acquire, by way of issue, an interest or right covered by subparagraph (i) or (ii);

a financial product prescribed by the rules.

Without limiting paragraphs (2)(a) or (f), the rules may prescribe that a use of a refundable deposit is only permitted for the purposes of those paragraphs if:

specified circumstances apply; or

the registered provider complies with conditions prescribed by the rules.

For example, the rules might prescribe that the use of a refundable deposit is only permitted if the registered provider has obtained the consent of the System Governor to the use of the deposit.