Paying for Accommodation in Residential Aged Care

If you move into residential care, you may be asked to pay for accommodation. You can choose to pay a lump sum Refundable Accommodation Deposit (RAD) or a Daily Accommodation Payment (DAP).

RADs have been the most popular choice, but more and more residents are using a combination of RADs and DAPs. The graph below shows the percentages of residents choosing to pay either a RAD or a DAP or a combination in 2014, 2015 and 2016.

Quick facts:

  • Aged care providers were holding $21.87 billion in accommodation payments (as at 30 June 2016) for 82,0006 residents (average of $266,717
  • The average RAD published on MyAgedCare at 6 April 2017 was $391,000
  • 215 aged care providers charge an accommodation payment more than $550,000

This is a lot of money but RADs are refundable when you leave care. You take no risk as the Federal Government guarantees repayment for approved service providers.  And Centrelink don’t count the assets when calculating pension entitlements.

Over the last 11 years, the guarantee scheme has been triggered 10 times and the government has repaid $43 million of deposits to residents.

Sources: Fifth report on the Funding and Financing of the Aged Care Sector July 2017, Aged Care Financing Authority. Various government press releases.

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