Refundable accommodation deposits (RADs)
Notice:
On 12 September 2024, the Australian Government announced an increase to the maximum accommodation price for RADs effective 1 January 2025.
If you have an application currently under assessment or an existing approval expiring before 1 January 2025, please view the Changes to the higher maximum accommodation payment amount FAQs fact sheet.
For further information, please refer to the Response to the Aged Care Taskforce – Accommodation reform fact sheet.
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 and Aged Care website.
Changes to residential aged care accommodation funding and RADs
From 1 January 2025, the maximum accommodation payment amount that residents can be charged as a RAD without approval from IHACPA will increase from $550,000 to $750,000. This amount will then be indexed to the Consumer Price Index (CPI) annually from 1 July 2025.
More information about the Australian Government’s response to the Aged Care Taskforce, and changes to residential aged care accommodation funding and RADs, can be found on the Department of Health and Aged Care website.
Legislation
The relevant sections of the Aged Care Act 1997 are:
- Section 52G-3 — Minister may determine maximum amount of accommodation payment
- Section 52G-4 — ACPC may approve higher maximum amount of accommodation payment.
- Division 3 – Approval of higher maximum accommodation payment amount of the Fees and Payments Principles 2014 (no 2)
The Australian Government is building a new Aged Care Act, which is expected to start from 1 July 2025. More information about the new Act can be found here.