Australian aged care firm accused in class action of charging residents for high teas and classes they couldn’t use | Aged care

Residents at one of Australia’s largest aged care providers have launched a class action alleging fees for services such as afternoon tea and exercise classes were illegally charged to customers who were unable to use them due to inactivity and other issues.

The lawsuit, filed in federal court, alleges that residents of more than 50 Arcare senior care facilities in four states were charged a daily “additional service fee” by Arcare, built into a “signature package” between July 2020 and July 2026. This includes fees paid by residents who are immobile, unable to swallow, or have cognitive disabilities.

The statement of claim alleges that Arcare, a for-profit provider, charged these fees for services it was legally obligated to provide, such as meals, as well as additional services that residents were not able to use.

Providers under aged care legislation may only charge for additional maintenance and services If a resident agrees to this, is able to access, benefit from, and have the capacity to use the services.

Arcare is alleged to have engaged in unconscionable conduct because residents were in an unequal bargaining position due to their reliance on aged care for medical or social needs. The statement of claim alleges that these residents were told that signature packages were non-negotiable and that an additional service fee was a mandatory condition of admission.

“The signature package included mandatory services that Arcare was obligated to provide and could not legally charge as additional services,” the statement of claim states.

Arcare has not yet submitted its response to the court. An Arcare spokesperson said it would “not be appropriate to comment on the allegations or legal proceedings” as the matter is currently in court.

“Arcare is committed to providing high-quality care and services that support the choice, independence and dignity of every resident,” the spokesperson said.

“We care about the feedback from our citizens and their families”

Afternoon tea, Foxtel and alcohol allegedly to blame

The statement of claim alleges that lump sum charges for afternoon tea, a varied menu and alcoholic beverages were collected from residents who followed prescribed dietary regimes, received enteral nutrition or pureed or modified texture diets, or did not have the capacity to make menu selections.

It was also alleged that some residents who were unconscious or did not have the capacity to use a television or understand audiovisual content were charged for Foxtel, newspapers and wireless internet.

The statement of claim states that “residents who are ambulatory or bedridden are unable to participate in bus excursions and exercise classes.”

Arcare also allegedly used financial information about residents to determine fees and charged individual residents a price that reflected what Arcare assessed residents could afford, rather than the actual value of the services provided.

The lawsuit was brought on behalf of 82-year-old Dianne Strickland, a former resident of Arcare Carnegie in Victoria.

Strickland allegedly suffered from osteoarthritis pain and reduced mobility and was physically unable to attend or benefit from exercise classes and bus trips for which he was charged.

He allegedly had no knowledge of how to use wireless internet technology and was constantly billed a daily fee for in-room Wi-Fi, even though he did not own a smartphone, tablet or computer.

The class action represents anyone who lived at an Arcare facility in New South Wales, Victoria, Queensland or the ACT during the six-year period and paid the additional service charge.

Damian Scattini, partner at law firm Quinn Emanuel Urquhart & Sullivan, acting on behalf of the applicants, said the lawsuit alleges Arcare took advantage of vulnerable residents or their families by charging for services that were “either not delivered at all or that Arcare was already obliged to provide under its agreements and Australian aged care legislation”.

“This is not negligence,” he said. “This is a systemic failure that has caused real financial harm to the people who have placed their trust and well-being in Arcare’s hands.”

He said it was estimated that about 7,500 residents were affected during the claim period.

“We are determined to hold Arcare accountable and recover the debts of these residents.”

Do you know more? melissa.davey@theguardian.com