Residential Care Guide

Refundable Accommodation Deposit

What is a Refundable Accommodation Deposit (RAD)?

The RAD is a lump-sum payment made by individuals entering residential aged care to cover their accommodation costs. It is similar to a deposit or bond, designed to secure a place in an aged care facility. The amount of the RAD is determined by the facility, and is subject to government regulations (ie. the lump sum RAD must be repaid in full when the resident is no longer at the aged care home).

Understanding the Purpose and Function

The primary purpose of the RAD is to contribute to the infrastructure and operational costs of the aged care facility. It enables providers to maintain high-quality care standards, including accommodation, meals, cleaning, and other amenities. Importantly, the RAD is fully refundable when the resident leaves the facility or passes away, providing a sense of financial security for the individual or their estate.

How is the RAD Calculated?

The calculation of the RAD is based on the market value of the room or accommodation within the aged care facility. Factors influencing the RAD amount include location, facility amenities, room size, and prevailing market rates. The government sets a maximum RAD amount ($550,000), beyond which providers cannot ask for a higher RAD level without seeking approval from the pring regulator.

RAD Payment Options

Individuals have several payment options for the RAD, providing flexibility to choose what suits their financial situation best. These options include paying the full RAD upfront, a combination of RAD and a Daily Accommodation Payment (DAP), or opting for a fully DAP arrangement.

Financial Implications and Considerations

Entering residential aged care involves careful financial arrangements. Seek professional advice from financial advisors or aged care specialists to understand the impact of the RAD on your overall finances, pension eligibility, and estate planning.

Transparency and Rights

As a consumer, you have the right to transparency regarding the RAD. Facilities are required to provide comprehensive information regarding RAD amounts, payment options, and associated terms and conditions. Feel empowered to ask questions and seek clarification before making any financial commitments.


Navigating aged care and the associated financial commitments can be complex. The Refundable Accommodation Deposit is a crucial aspect of securing residential care, ensuring quality accommodation and services. At Aged Care Connect, we're dedicated to providing you with the information and resources necessary to make informed decisions about aged care options.