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AGED CARE ACT 1997 - SECT 52N.1

Refundable deposits and accommodation bonds to be used only for permitted purposes

             (1)  An approved provider must not use a * refundable deposit or * accommodation bond unless the use is permitted.

Permitted use--general

             (2)  An approved provider is permitted to use a * refundable deposit or * accommodation bond for the following:

                     (a)  for capital expenditure of a kind specified in the Fees and Payments Principles and in accordance with any requirements specified in those Principles;

                     (b)  to invest in a financial product covered by subsection (3);

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

                              (i)  the loan is not made to an individual;

                             (ii)  the loan is made on a commercial basis;

                            (iii)  there is a written agreement in relation to the loan;

                            (iv)  it is a condition of the agreement that the money loaned will only be used as mentioned in paragraph (a) or (b);

                             (v)  the agreement includes any other conditions specified in the Fees and Payments Principles;

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

                     (e)  to repay debt accrued for the purposes of capital expenditure of a kind specified in the Fees and Payments Principles;

                      (f)  to repay debt that is accrued before 1 October 2011, if the debt is accrued for the purposes of providing * aged care to care recipients;

                     (g)  for a use permitted by the Fees and Payments Principles.

Note:          An approved provider, and the approved provider's key personnel, may commit an offence if the approved provider uses a refundable deposit or accommodation bond otherwise than for a permitted use (see section 52N-2).

Permitted use--financial products

             (3)  For the purposes of paragraph (2)(b), the following are financial products (within the meaning of section 764A of the Corporations Act 2001 ) covered by this subsection:

                     (a)  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 within the meaning of the Retirement Savings Accounts Act 1997 ;

Note 1:    ADI is short for authorised deposit-taking institution.

Note 2:    RSA is short for retirement savings account.

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

                     (c)  a security, other than a security of a kind specified in the Fees and Payments Principles;

                     (d)  any of the following in relation to a registered scheme:

                              (i)  an interest in the scheme;

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

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

                     (e)  a financial product specified in the Fees and Payments Principles.

Permitted uses specified in Fees and Payments Principles

             (4)  Without limiting paragraph (2)(g), the Fees and Payments Principles may specify that a use of a * refundable deposit or * accommodation bond is only permitted for the purposes of that paragraph if:

                     (a)  specified circumstances apply; or

                     (b)  the approved provider complies with conditions specified in, or imposed in accordance with, the Fees and Payments Principles.

Note:          For paragraph (4)(a), the Fees and Payments Principles might, for example, specify that the use of a * refundable deposit is only permitted if the approved provider obtains the prior consent of the Secretary to the use of the deposit.



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