Aged care refundable accommodation deposits (RADs) explained — 2026 AU guide
A refundable accommodation deposit (RAD) is a lump-sum payment made to an aged care provider when a person moves into a residential aged care facility in Australia. It is fully refundable when the resident leaves or passes away, and it is regulated under federal law to protect consumers.
What is a RAD and how does it work?
When an older Australian moves into a residential aged care home, they may be asked to pay for their accommodation. One of the most common ways to do this is through a refundable accommodation deposit, or RAD.
A RAD functions like an interest-free loan to the aged care provider. You pay a lump sum upfront, the provider uses those funds while you are a resident, and when you leave, whether that is because you move to another facility or pass away, the full amount is returned to you or your estate. There are no fees or deductions taken from the RAD itself, which makes it quite different from other aged care costs such as basic daily fees or means-tested care fees.
Alternatively, residents can choose to pay their accommodation costs as a daily accommodation payment (DAP), which is an ongoing rental-style charge, or as a combination of both. The choice between a RAD, a DAP, or a combination depends on personal financial circumstances, and a qualified financial adviser who specialises in aged care can help you work through the options.
You can learn more about how residential aged care accommodation is structured at My Aged Care, the Australian Government's primary aged care information portal.
Who is eligible to pay a RAD?
Not everyone entering residential aged care is required to pay a RAD. The Australian Government uses an income and assets assessment, administered by Services Australia, to determine what accommodation costs a resident is expected to contribute.
If a person is assessed as having sufficient means, they are classified as a "financially supported" or "non-supported" resident depending on the outcome. Some residents may be fully supported by the government, meaning the government subsidises or covers their accommodation costs and they are not expected to pay a RAD at all. Others may be expected to contribute to accommodation costs and will negotiate a RAD price directly with their chosen provider.
It is strongly recommended that you complete a formal financial assessment through Services Australia well before entering care. The assessment considers income, assets, and the value of the family home under specific rules. Because the rules are detailed and your circumstances are unique, seeking advice from an accredited aged care financial adviser or specialist solicitor is advisable before making any commitment.
How is the RAD price set?
Aged care providers set their own RAD prices, which must be publicly listed on the My Aged Care website and on the provider's own website. This transparency requirement is designed so that prospective residents and their families can compare accommodation options before making a decision.
Prices vary considerably depending on the provider, the location, the type of room (for example, single versus shared, size and amenity), and the services on offer. Metro facilities in high-demand areas such as Sydney, Melbourne, or Brisbane typically list higher RAD prices than regional facilities, though this is not always the case.
Because RAD prices are set by individual providers rather than by the government, there is no fixed national price. Families should use the My Aged Care facility search tool to compare prices in their area. For a broader understanding of accommodation pricing and aged care costs, see our cost guide.
What protections exist for your RAD money?
One of the most important things to understand is that your RAD is protected by law. Under the legislation governing aged care, providers have strict obligations about how they hold and manage RAD funds. Key protections include:
- Full refundability: Providers must refund the RAD in full when the resident leaves or passes away, typically within a set timeframe. Any failure to do so is a serious breach. - Government guarantee: The Australian Government provides a guarantee on RAD payments, meaning that if a provider becomes insolvent and cannot repay your deposit, the government will step in. This guarantee is designed to give residents and families confidence that their money is not at risk. - Regulatory oversight: The Aged Care Quality and Safety Commission monitors compliance by aged care providers, including their financial conduct. You can check a provider's compliance status and any sanctions on the Commission's website.
These protections have been a cornerstone of the aged care system and reflect the serious responsibility providers take on when they accept a RAD.
What happens to the RAD if circumstances change?
Life in aged care can change. A resident might transfer to another facility, move into a hospital, or pass away. Understanding what happens to your RAD in each scenario is essential.
If a resident transfers to a new facility, the original RAD is refunded and a new RAD may be negotiated with the incoming provider. If the resident passes away, the RAD is returned to the estate. Providers are required to refund the RAD promptly, and there are regulatory consequences for delays without legitimate justification.
It is also possible to change between a RAD and a DAP arrangement while in care, subject to agreement with the provider. This flexibility can be useful if your financial situation changes over time. Always seek advice from a registered financial adviser before switching payment arrangements.
Tips for families researching aged care options
Choosing an aged care home involves much more than comparing RAD prices, but accommodation costs are a significant financial consideration. Here are some practical steps for families:
- Start early: The financial assessment process through Services Australia takes time. Beginning early gives you more options. - Use official tools: The My Aged Care website lists all approved providers, their RAD prices, and quality information in one place. - Seek specialist advice: An accredited aged care financial adviser can model different payment scenarios and help you understand the long-term impact of choosing a RAD versus a DAP. - Check compliance records: Look up providers on the Aged Care Quality and Safety Commission website to review any findings or sanctions. - Compare providers: Our independent directory at best aged care providers in Sydney can help you shortlist and compare options in your area. - Understand the contract: Before signing a Resident Agreement, have a lawyer or adviser review the terms relating to your RAD.
For more on how we evaluate providers, visit our methodology page.
Frequently asked questions
Q: Is a RAD the same as a bond? A: The RAD replaced what was formerly known as an accommodation bond under earlier aged care legislation. While they function in a similar way, the modern RAD framework has stronger consumer protections and a government guarantee. The term "bond" is now outdated in the current regulatory context. Q: Can a provider keep part of my RAD? A: No. Providers cannot deduct fees, service charges, or any other amounts from a RAD. The full amount must be returned. If unpaid fees are owed, the provider must pursue those through a separate process, not by withholding the RAD. Q: What if I cannot afford the RAD price listed by my preferred provider? A: You may be able to negotiate a lower RAD or choose to pay via a DAP instead. Some providers also offer combination payments. If you are assessed as a supported resident, you may not be required to pay a RAD at all. Services Australia's assessment will clarify your position. Q: Where can I get independent help understanding RADs? A: The National Aged Care Advocacy Program (NACAP) provides free and independent advice to older Australians and their families. You can also contact an accredited aged care financial adviser for personalised guidance on your financial situation.---
Sources
- My Aged Care - Aged Care Quality and Safety Commission - Australian Institute of Health and Welfare (AIHW) - Services Australia - Aged Care Act 1997
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Information in this article is general only and not personal advice. Verify the details with the linked sources or an appropriately qualified Australian professional before relying on them.
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