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Charities & Not-For-Profits Law in Australia

Accommodation Bonds in Development Funds

Posted in Compliance, Fundraising, General, Liability & Risk

Senior woman with caregiverSummary – Aged Care operators can place accommodation bonds in Development Funds.

When the Federal Government amended the prudential requirements for the investment of accommodation bonds in residential aged care facilities subject to the Aged Care Act in 2011, there was some doubt as to whether Catholic aged care operators could legitimately place accommodation bonds for investment in Catholic Development Funds (CDFs).

Aged care facilities in some dioceses were certainly able to lodge accommodation bonds with CDFs but there was a question mark over some others which were structured differently.

On 1 August 2013, this uncertainty was removed.  The User Rights Amendment (Various Measures) Principle 2013 which came into force on that date amended the User Rights Principles to include as a legitimate place for investment of accommodation bonds:

A religious charitable development fund listed in Schedule 1 (Religious Charitable Development Funds) of banking exemption number 1 of 2011 made under the Banking Act in 1959.”

As a consequence, there is no longer any uncertainty and approved providers of aged care under the Aged Care Act can invest accommodation bonds in Catholic Development Funds.