Getting Your RAD back

Accommodation payments (called Refundable Accommodation Deposits – RADs for short) are one of the most misunderstood areas of residential aged care. Many people don’t realise that a RAD is not “lost” money but is refundable when you leave care or pass away.

When entering care you will have the choice to pay for your room as a lump sum or a daily fee. If you pay the lump sum you give up access to this money while you live in care, but it remains part of your wealth and can be left as an inheritance for your family. If you choose to pay the daily fee, this money is not refundable.

How much RAD is refundable?

The full RAD paid is refundable. But if you ask the care provider to take ongoing care fees from your RAD (instead of paying these fees from your bank account) this reduces how much is refundable as you are spending some of the RAD paid.

The rules were different before 1 July 2014, so you may have had experience with a family member who did not get all their money back in previous years. The rules are also different for retirement villages where you may lose a portion of your entry cost as a deferred management fee or refurbishment fee.

Under the current residential aged care rules, as long as you pay your other fees in full each month, there will be nothing to deduct from the RAD and it is fully refundable.

When is the RAD refunded?

After you pass away, your executor may need to obtain probate and show it to the care provider. The provider then has 14 days to pay the refund.
Some providers might not ask for probate and have a cheque ready to pay the refund when your family come to collect your personal items. It is up to the provider to decide if they want to see probate or not. The reason for probate is to ensure that the person coming to collect the refund is the person legally able to collect the money for the estate.