Refundable Accommodation Deposit (RAD)

October 12, 2025

‍What is Refundable Accommodation Deposit (RAD)?

The Refundable Accommodation Deposit (RAD) is a lump sum payment made by individuals in Australia when they enter permanent residential aged care. It is essentially a payment to secure accommodation in an aged care facility.

Think of it like a security deposit when renting a home—except in this case, it is meant for your aged care accommodation, and you get it back when you move out or pass away.

How Does a Refundable Accommodation Deposit (RAD) Work?

The amount you pay for a Refundable Accommodation Deposit depends on the aged care home and its pricing. Some homes cost more than others, but all must follow aged care standards set by the Australian government.

Here is how it works:

You pay a lump sum to secure your accommodation.
The money is fully refundable when you leave.
You can pay in different ways, depending on what suits you best.

If paying the full amount upfront is not an option, you can choose to pay a Daily Accommodation Payment (DAP) instead, which is like paying rent. You can also split the payment, paying part as a deposit and the rest as daily payments.

Why Is a Refundable Accommodation Deposit Important?

Aged care homes need funding to provide safe, comfortable, and well-maintained accommodation. The Refundable Accommodation Deposit helps cover these costs while making sure that your money is not lost.

It also gives you more control. Since it is refundable, you or your family will receive the amount back when you leave, minus any agreed deductions. This can be useful for managing future expenses or passing on funds to loved ones.

Who Needs to Pay a Refundable Accommodation Deposit?

Not everyone has to pay a Refundable Accommodation Deposit. The government assesses your financial situation to determine if you need to pay a Refundable Accommodation Deposit (RAD) or a Refundable Accommodation Contribution (RAC) instead.

If you are required to pay, you can choose from the following options:

Pay the full amount as a lump sum, which is refunded later.
Pay a Daily Accommodation Payment (DAP), which is a smaller ongoing fee.
Combine both options, paying part upfront and the rest as daily payments.

Final Thoughts

Understanding aged care costs can feel like trying to read a menu in a foreign language, but it does not have to be complicated. The Refundable Accommodation Deposit (RAD) is one way to secure your place in an aged care home while keeping your money safe.

Before making a decision, it is always a good idea to talk with a financial adviser or a trusted family member. Knowing your options can help you feel confident about your aged care journey.

Frequently Asked Questions

What is the Refundable Accommodation Deposit (RAD)?

The Refundable Accommodation Deposit (RAD) is a lump sum payment made by individuals in Australia when they enter permanent residential aged care. It is a payment used to secure accommodation in an aged care facility and is similar to a security deposit, as it is fully refundable when the resident moves out or passes away.

How does the RAD payment arrangement work?

The RAD is a lump sum paid to the aged care home to secure accommodation. The amount is fully refundable when the resident leaves. If paying the full lump sum upfront is not suitable, you can choose to pay a Daily Accommodation Payment (DAP) instead, which is like paying rent, or combine both a part upfront deposit and part daily payments.

Why is the Refundable Accommodation Deposit (RAD) important?

The Refundable Accommodation Deposit helps aged care homes cover the costs of providing safe, comfortable, and well-maintained accommodation. It is important because it ensures the money is not lost, as it is refundable, giving the resident or their family more control and allowing them to receive the amount back (minus any agreed deductions) upon leaving.

Who is required to pay a Refundable Accommodation Deposit?

Not everyone is required to pay a Refundable Accommodation Deposit (RAD). The Australian government assesses an individual's financial situation to determine if they need to pay a RAD or a Refundable Accommodation Contribution (RAC) instead.

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