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

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 will be indexed to the Consumer Price Index (CPI) annually from 1 July 2025.

For more information about how this change affects your application or approval, please view the Changes to the higher maximum accommodation payment amount fact sheet, or refer to our Frequently asked questions.

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 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 start on 1 July 2025. More information about the new Aged Care Act can be found here.

Refundable accommodation deposits (RADs)