Refundable accommodation deposits (RADs)
Residents can pay a lump sum for their accommodation in the form of a refundable accommodation deposit (RAD), which provides a significant source of funding for capital investment and acts as an interest free loan to providers. Providers must refund the balance of the RAD when the resident leaves care.
More information about accommodation payments and contributions for residential aged care can be found on the Department of Health, Disability and Ageing website.
Maximum accommodation payment amount
On 1 January 2025, the maximum accommodation payment amount that residents can be charged as a RAD without approval from IHACPA increased from $550,000 to $750,000. This amount is indexed to the Consumer Price Index (CPI) annually from 1 July 2025.
The maximum accommodation payment amount is currently $758,627.
Legislation
The relevant sections of the Aged Care Act 1997 are:
- Section 52G-3 — Minister may determine maximum amount of accommodation payment of the Aged Care Act 1997
- Section 52G-4 — Pricing Authority may approve higher maximum amount of accommodation payment of the Aged Care Act 1997
- Division 3 – Approval of higher maximum accommodation payment amount of the Fees and Payments Principles 2014 (No. 2)
The new Aged Care Act will commence on 1 November 2025. More information can be found here.