Indexation of refundable accommodation deposit approvals
Registered providers can apply indexation to their approved refundable accommodation deposit (RAD) amount (or equivalent daily amount) annually from each approval anniversary date for up to four years. This can be done without our approval. After 4 years, providers must apply for a new approval to charge higher RADs.
What is indexation?
Applying indexation to an approved RAD (or equivalent daily amount) means adjusting it in line with inflation.
Subsection 290-40 of the Aged Care Rules 2025 sets out how and when registered providers may index an approved RAD.
The legislation requires the All groups consumer price index be used as the measure of inflation.
When indexation can be applied
Indexation can be applied annually from the anniversary date of higher RAD approval, up to 4 years.
For example, if the date of the approval letter is 21 April 2025, indexation can be applied at any time within the anniversary year from the following dates:
- 21 April 2026
- 21 April 2027
- 21 April 2028.
If a provider decides to index, the indexed amount substitutes an approved price. For indexation of subsequent years, the previous year’s substituted price (the indexed amount) needs to be used in the calculation.
Providers can only apply indexation for the current year. If a provider does not apply indexation for one or more years, they cannot ‘catch up’ by applying indexation retrospectively.
Once a provider indexes their maximum approved RAD, they are not locked into applying indexation each year thereafter. Indexation can be applied one year and not the next.
Providers must publish the indexed amount before they can charge this amount in new accommodation agreements.
The indexed amount can only be charged to residents who enter care on or after the day that indexation was applied.
Indexation calculator
Use the indexation calculator to work out the indexed RAD amount for a current approval year.
The calculator uses index data from the ABS website.
You must wait until the index number is released by the ABS.
The ABS releases index numbers for each quarter on the last Wednesday of the month following that quarter (although public holidays may affect the release date).
If an approval date falls early in a new quarter, providers may have to wait for the ABS to release the index number from the previous quarter.
The quarters end in:
- March
- June
- September
- December.
For example, if a provider’s approval date falls in January, they will have to wait until the last Wednesday in January for the ABS to release the index number for the previous December quarter, before indexation can be applied.