Understanding Refundable Accommodation Deposit (RAD)

What is Refundable Accommodation Deposit in Aged Care?

A Refundable Accommodation Deposit (RAD) is a lump-sum accommodation payment made when entering an aged care facility in Australia. The provider sets the RAD amount (often within a published range), and it functions as an alternative to paying accommodation as an ongoing daily charge. The RAD is generally refundable when the resident leaves or passes away (subject to agreed deductions), which is why the decision is less about “losing the money” and more about liquidity, opportunity cost, and how RAD compares against DAP (Daily Accommodation Payments).

Key Features of RAD:

• It is an alternative to ongoing daily accommodation fees.
• The amount is determined by the aged care provider but may be negotiable.
• It is government-guaranteed, meaning your money is protected if the facility is accredited.
• A paid RAD is exempt for Age Pension assessment, but assessable for aged care means testing.

How Much Does a RAD Cost?

The cost of a RAD varies significantly depending on location, facility quality, and available services. Rather than anchoring to a single “average” number, the practical approach is to treat the RAD as a quoted price you compare facility-to-facility and then model the trade-off between paying a lump sum (RAD) or paying ongoing accommodation costs as DAP. That comparison matters because it often changes whether keeping the family home is viable (see how to avoid selling the family home to fund care).

How to Find Out the RAD for a Facility

Aged care facilities publish RAD prices so families can compare accommodation costs before committing, but the number alone is not enough—you also need to understand how the payment choice interacts with the wider fee system. If you are comparing providers, pair the RAD quote with the broader cost categories in Aged Care Fees, then run a like-for-like comparison of RAD versus DAP based on your cash flow and assets.

Do You Have to Pay a RAD?

Your requirement to contribute toward accommodation depends on your assessed financial position, and in many cases you will be choosing between paying accommodation as a lump sum (RAD), as an ongoing daily charge (DAP), or as a combination of both. The meaningful decision is not simply “can I pay it?”—it is what the payment method does to liquidity, pension outcomes, and the rest of your aged care fee profile. If you want the daily-payment alternative explained clearly, read Understanding Daily Accommodation Payments (DAP), then return here to evaluate whether RAD, DAP, or a blended approach fits your situation.

• Pay the full RAD upfront
• Make daily payments instead (DAP – Daily Accommodation Payment)
• Use a combination of both

What If You Can’t Afford a RAD or DAP?

If you have limited assets and income, you may qualify for government assistance with accommodation costs, but eligibility depends on how your circumstances are assessed. To understand the fee categories that still apply (and which ones may be reduced or subsidised), it helps to start with Aged Care Fees and then clarify how your contribution is determined through means testing before relying on assumptions about what will be “covered.”

Should You Pay the RAD Upfront?

There are several advantages to paying the RAD instead of opting for DAP:

• Cost Savings: Since DAP includes an interest component, paying the RAD upfront can be more cost-effective.
• Guaranteed Refund: The RAD is refundable, unlike DAP payments.
• Financial Planning Benefits: The RAD is exempt from asset testing when determining pension entitlements, potentially preserving your aged pension benefits.

Before deciding, you want a model that compares RAD against DAP using your actual cash flow and asset position, and that also tests second-order impacts such as pension outcomes and the treatment of the family home. If you need help running that comparison, speak with an aged care financial adviser who can quantify the trade-offs rather than defaulting to a rule of thumb.

Do You Have to Sell Your Family Home to Pay the RAD?

Whether the family home is counted depends on occupancy and protected-person rules, and it can change the affordability of RAD dramatically. If the home is unoccupied when you enter care, its value may be included in your assessment, which can push you toward selling or toward alternative funding. Before acting, make sure you understand how the family home is treated when someone moves into residential care, because that single classification often drives the rest of the plan.

Selling the home can create liquidity for RAD, but it can also change pension eligibility and shift how you are assessed for other fees. If you are trying to avoid a forced sale, read How to Avoid Selling the Family Home to Pay for Care and, for the fee mechanics that sit behind the decision, refer to Means-Tested Care Fee Explained.

Related: If your question is specifically “will we be forced to sell?”, start with What Happens to My House If I Go Into a Nursing Home?, then use home-retention strategies to evaluate alternatives.

Can a Family Member Stay in the Home to Avoid Paying a RAD?

In most cases, a family member moving into the home does not automatically exempt it from assessment; exemptions tend to rely on specific protected-person categories (such as a spouse or dependent) and defined long-term carer conditions. Because this is exactly where families make incorrect assumptions, treat it as a classification question first—then read how the home is treated in residential aged care before you decide whether selling, renting, or retaining the property is realistic.

Since these rules can be complex, it’s best to discuss your personal situation with Services Australia or a financial advisor who specialises in aged care.

What Happens to the RAD After You Pay It?

Once paid, the RAD is held by the aged care provider and can only be used for specific purposes, such as facility improvements, investments, or resident refunds.

Refundable Accommodation Deposit Refund Timelines

• If you move out: The RAD must be refunded within 14 days.
• If you transfer to another facility: The RAD will be refunded and can be used to pay for the new facility.
• If you pass away: The RAD is refunded to your estate within 14 days after receiving the Grant of Probate.

How Long Do You Have to Decide on a RAD Payment?

You have 30 days from your admission to an aged care facility to decide how you want to pay. If you opt for a lump sum payment, you have 6 months to pay the RAD in full. Until then, you will pay a daily fee with interest.

Making the Best Financial Decision for Aged Care

Deciding how to finance aged care accommodation is easier when you treat it as a structured comparison: RAD versus DAP, plus the knock-on effects on assessable assets, the home, and pension outcomes. At Roccaforte Financial, we specialise in aged care financial planning, helping families model these trade-offs so the accommodation decision is aligned with the wider fee system rather than made in isolation.

If you want the full context around costs beyond accommodation, review What Are the Aged Care Fees?, then use Means-Tested Care Fee Explained to understand how assessments can change what you actually pay.

Get Expert Aged Care Financial Advice

If you’re unsure how to fund accommodation—or whether selling the home is actually necessary—the fastest way to reduce uncertainty is to model the decision in the correct order: first compare DAP against RAD, then test home treatment using the family home rules, and finally confirm how your wider costs sit inside Aged Care Fees. Contact Roccaforte Financial on +61 2 9894 1844 or click here to speak with an experienced aged care financial planner in Castle Hill.