Document ID: chunk:federal_register_of_legislation:C2011A00086:clause:1_5:p1
Version: federal_register_of_legislation:C2011A00086
Segment Type: clause
Provision Reference: sch 1 cl 5 (pt 1/3)
Character Range: 5607–8453

5  After Subdivision 57‑E
Insert:

Subdivision 57‑EA—Permitted use of accommodation bonds

57‑17A  Permitted use of accommodation bonds

Permitted use—general
 (1) A use of an *accommodation bond by an approved provider is permitted if the bond is:
 (a) used for *capital expenditure (see subsection (2)); or
 (b) invested in a financial product covered by subsection (3); or
 (c) used 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 User Rights Principles; or
 (d) used to refund *accommodation bond balances or *entry contribution balances; or
 (e) used to repay debt accrued for the purposes of capital expenditure or refunding accommodation bond balances; or
 (f) used to repay debt that is accrued before the commencement of this section, if the debt is accrued for the purposes of providing *aged care to care recipients; or
 (g) used as permitted by the User Rights Principles.
Note 1: An approved provider, and the approved provider's key personnel, may commit an offence if the approved provider uses an accommodation bond otherwise than for a permitted use (see section 57‑17B).
Note 2: This section commences on 1 October 2011 (see paragraph (f) of this subsection and section 2 of the Aged Care Amendment Act 2011).

Permitted use—capital expenditure
 (2) For the purposes of subsection (1), the following expenditure is capital expenditure if it is reasonable in the circumstances:
 (a) expenditure to acquire land on which are, or are to be built, the premises needed for providing residential care or flexible care;
 (b) expenditure to acquire, erect, extend or significantly alter premises used or proposed to be used for providing residential care or flexible care;
 (c) expenditure to acquire or install furniture, fittings or equipment for premises used or proposed to be used for providing residential care or flexible care, when those premises are initially erected or following an extension, a significant alteration or a significant refurbishment;
 (d) expenditure that is directly attributable to doing a thing mentioned in paragraph (a), (b) or (c);
 (e) expenditure specified in the User Rights Principles.
Example: Repairs to, or maintenance of, premises (such as painting, plumbing, electrical work or gardening) would not constitute a significant alteration for the purposes of this subsection.

Permitted use—financial products
 (3) For the purposes of subsection (1), the following (within the meaning of section 764A of the Corporations Act 2001) are