Your questions answered


Accommodation payments

What happens to my refundable accommodation deposit (RAD) when I pass away?


The residential service must refund the full amount paid to your estate. However, if you have outstanding fees or you have asked for ongoing fees to be deducted from the RAD this will reduce the amount repayable.

In most cases, your executor will need to get probate from the courts and provide a copy to the facility. If you did not have a will, then your legal personal representative will need to apply to the courts for Letters of Administration.

Once the court documentation is received, this should be shown to the service provider. They have 14 days from receiving the documentation to repay the RAD to your estate.

The service provider needs to pay interest on your RAD from the date of your death to the date that it is refunded. The interest rate is set at the lowest Centrelink deeming rate plus two per cent. If the service provider is late in repaying the RAD, a higher penalty interest rate applies for each day the payment is late.

What happens to my refundable accommodation deposit (RAD) if the aged care service goes into liquidation?

The RADs are currently government guaranteed provided the aged care service is approved by the Federal Government. You check this approval status when you are choosing an appropriate service.

When the RAD becomes repayable (either because you move to another aged care service or you pass away) if the service provider is insolvent or has gone into liquidation the government will pay the bond and takes over the right to any recovery from the service provider.


How will the refundable accommodation deposit (RAD) affect my Centrelink Age Pension?

The RAD is assessable when calculating your aged care fees, but it is not included in your means test assessment when determining your eligibility for a means-tested pension from Centrelink or Veterans’ Affairs. It is exempt under both the assets and income tests.

This article is prepared by the strategy specialists at Aged Care Steps, a company supporting financial planning advisers who provide planning advice for aged care. To find a professional adviser who specialises in aged care advice go to and click on the Find an Adviser link.

Disclaimer: This is general advice and does not take into account your particular circumstances or objectives. Before taking any action you should seek personal financial planning, taxation or legal advice and refer to the relevant Product Disclosure Statement before investing in any product. Aged Care Steps Pty Ltd ABN 42 156 656 843, AFSL 486723, registered tax (financial) advisers 25581502.

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