About RAD approvals
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.
What is a RAD?
If you are a residential aged care provider and want to charge a resident more than the maximum accommodation payment amount as a RAD (or equivalent daily amount), you must apply to IHACPA for approval. An approval is valid for 4 years.
A refundable accommodation deposit (RAD) is the lump-sum payment for a room (or part of a room) in an aged care home. The price is for residents who are not eligible for Australian Government assistance.
Each residential aged care provider sets their own price for different kinds of rooms. You must publish the prices on My Aged Care, your website and in your published materials for residents as:
- a lump-sum RAD amount
- an equivalent daily accommodation payment (DAP)
- an equivalent combination of both
The resident chooses the payment option they prefer within 28 days of entering care.
If a resident is eligible for Government assistance, they may need to pay accommodation contributions. We do not regulate accommodation contribution amounts.
When RADs need approval
From 1 January 2025, the maximum accommodation payment amount you can charge a resident as a RAD (or equivalent daily amount) 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.
You must apply, or reapply, to IHACPA for approval if you are an approved provider of residential aged care services and:
- you want to charge more than $550,000 as a RAD (or equivalent Daily Accommodation Payment (DAP)) before 1 January 2025
- you want to charge more that $750,000 as a RAD (or equivalent DAP) after 1 January 2025
- you want to charge an amount that is higher than your currently approved amount
- your current approval is expiring.
Approvals are valid for 4 years. You must reapply to IHACPA at least 60 days before your existing approval expires if you wish to continue to charge RAD prices above the maximum accommodation payment amount.
Apply for RAD approval
The form and process to apply for a RAD is the same whether you have applied for RAD approval before or not.
When completing your application you must use the most up to date application form published on our website. Submitting older versions of the application form could delay the assessment of your application.
Learn more about the application and approval process.
Why RADs need approval
You must apply for approval so we can check:
- if the proposed price represents value to the resident through the quality of the accommodation
- how you decided on the proposed price
Who can apply
Approved providers of residential aged care can apply for RAD approval.
Legislation
- Section 52G-3 — Minister may determine maximum amount of accommodation payment of the Aged Care Act 1997
- Section 52G-4 — IHACPA 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)