Refundable Accommodation Contribution (RAC)

October 12, 2025

‍Refundable Accommodation Contribution (RAC): What It Means for You

Moving into an aged care home is a big step, and one of the biggest questions is how to pay for it. The Refundable Accommodation Contribution (RAC) is one way to cover the cost of your accommodation if you are eligible for government support. It is not an extra fee, but rather a way to contribute to your stay without losing your money forever.

Think of it like a security deposit when renting a home. You pay an amount upfront, and when you leave, it is refunded to you or your estate.

How Does the Refundable Accommodation Contribution (RAC) Work?

Not everyone pays the same amount for aged care. Your financial situation determines what you will contribute. The government assesses your income and assets, and if you meet certain conditions, you may be required to pay a Refundable Accommodation Contribution instead of a Refundable Accommodation Deposit (RAD).

Here is what you need to know:

It is set by the aged care provider based on their pricing.
You do not pay more than what is needed for your accommodation.
It is refunded in full when you leave, unless you choose to have part of it used for daily care fees.

Why Is the Refundable Accommodation Contribution Important?

Aged care homes must follow aged care standards set by the government, ensuring that residents receive quality care and comfortable living arrangements. The Refundable Accommodation Contribution helps cover the cost of providing that accommodation while making sure that you are not left out of pocket in the long run.

It also gives peace of mind. Since the amount is refundable, you or your family will not lose the money permanently.

Who Needs to Pay the Refundable Accommodation Contribution?

Your financial assessment will determine whether you need to pay a Refundable Accommodation Contribution or a Refundable Accommodation Deposit. If you have low to moderate financial means, you may be asked to pay a Refundable Accommodation Contribution instead of the full deposit.

You can choose to pay it in one of two ways:

As a lump sum – This amount is held and refunded when you leave.
As a daily payment – This is like paying rent instead of a lump sum.

If you prefer, you can also pay a combination of both.

Final Thoughts

Planning for aged care can feel like trying to read a map with tiny print, but understanding how payments work makes things easier. The Refundable Accommodation Contribution is one way to help cover the cost of your stay, while still keeping your money secure.

It is always a good idea to talk to a financial adviser or a trusted family member before making any decisions. Knowing your options can help you feel confident about your next steps.

‍

Frequently Asked Questions

What is the Refundable Accommodation Contribution (RAC)?

The Refundable Accommodation Contribution (RAC) is a way for eligible individuals to cover the cost of their aged care accommodation. It is not an extra fee, but a refundable contribution, similar to a security deposit, which is returned to you or your estate when you leave the aged care home.

How is the amount of the Refundable Accommodation Contribution determined?

The amount of the RAC is determined by your financial situation, which is assessed by the government based on your income and assets. The aged care provider also sets the amount based on their pricing, but you do not pay more than what is required for your accommodation.

Who is required to pay the Refundable Accommodation Contribution (RAC)?

If your financial assessment shows you have low to moderate financial means and you are eligible for government support, you may be required to pay a Refundable Accommodation Contribution instead of the full Refundable Accommodation Deposit (RAD).

In what ways can the Refundable Accommodation Contribution be paid?

You have three options for paying the Refundable Accommodation Contribution:

As a lump sum, which is held and refunded when you leave.
As a daily payment, which is like paying rent.
As a combination of both a lump sum and a daily payment.

Is the Refundable Accommodation Contribution always fully refunded?

The Refundable Accommodation Contribution is refunded in full when you leave the aged care home, unless you choose to have a part of it used to cover your daily care fees.

More Glossary items

War widow/widower pensions

War widow and widower pensions provide vital financial support to the surviving partners of veterans. These government payments are generally non-taxable and are treated differently in aged care assessments, often reducing or eliminating means-tested care fees for residential or home care services. Understanding how these pensions interact with aged care fees can help recipients plan their finances and maintain access to essential services.

Veteran and war widow/widower pensioners

This guide explains aged care support options for Australian veterans and war widows/widowers. It covers eligibility for government-funded aged care services, access to Department of Veterans' Affairs (DVA) support, and how pensions affect aged care fees. The article highlights the importance of recognising the unique needs of this group to ensure respectful and appropriate care.

System Governor

The System Governor plays a vital role in Australia’s aged care system, overseeing service quality, continuity, and fair access for older Australians. This post explains its responsibilities, including policy development, provider accountability, and initiatives like Star Ratings, ensuring that aged care services are reliable, safe, and equitable.

Substitute decision-making

Substitute decision-making is used when an older person can no longer make important decisions on their own. A substitute decision-maker steps in to make choices about medical treatment, personal care, and living arrangements. Their role is to follow the person’s known wishes or act in their best interests when those wishes are not clear. Families can plan ahead by legally appointing someone they trust, and any valid Advance Care Directive must be followed. Understanding how substitute decision-making works helps ensure the person’s rights, preferences, and wellbeing remain at the centre of care.

Supported decision-making

Supported decision making is a rights-based approach that helps you stay in control of your life as you receive aged care services. Instead of others making choices for you, this approach focuses on giving you the information, tools, and support you need to make your own decisions. This support can come from family members, friends, or independent advocates who help you understand options and express your preferences.

Statement of Rights

The Aged Care Statement of Rights outlines the protections every older person can expect when receiving funded aged care services in Australia. It affirms core rights such as independence, choice, equitable access, quality and safe care, privacy, and clear communication. The Statement also ensures that individuals can speak up, provide feedback, or make complaints without fear of unfair treatment. For providers, it establishes clear responsibilities to act in line with these rights and demonstrate genuine understanding in daily practice. This framework places the dignity, identity, and preferences of the older person at the centre of all care decisions.

Self-advocacy

Self-advocacy is the ability to speak up for your needs, preferences, and rights when receiving aged care. It helps maintain autonomy, ensure quality services, and improve communication with care providers. By asking questions, expressing preferences, raising concerns, and keeping simple records, individuals can take an active role in directing their care. When extra support is needed, family, friends, or independent advocates can help ensure the person’s voice remains central to all decisions.

Sanction or Sanctions in place

Sanctions in Australian Aged Care are serious regulatory actions taken when a provider fails to meet required quality and safety standards. This article explains what sanctions are, why they are imposed, and the steps that lead to them, including Notices to Remedy and decisions by the Aged Care Quality and Safety Commission. It outlines common sanction conditions, their impact on providers, and what they mean for residents. The summary also answers key questions about sanction duration, consequences for ongoing non-compliance, how to find sanctioned facilities, and resident rights. The goal is to help readers clearly understand how sanctions protect the safety and wellbeing of older Australians.