While the RAD is included as an asset, it is not considered a financial asset and therefore no income is deemed to be earned on this amount. Any amount paid as a RAD is also excluded from the age pension asset test and may impact their age pensions.
The Refundable Accommodation Deposit (RAD) is a Centrelink exempt asset that can help retain or increase social security entitlements (if any), and reduce the means tested amount. While the RAD is an assessable aged care asset, no income is assessed for the income test.
There are two types of lump sum, depending on the outcome of your means assessment: Refundable accommodation contribution (RAC): This is when the government helps with the costs. Refundable accommodation deposit (RAD): This is when you pay the full amount yourself.
Remember, the RAD is fully refundable and it is Government Guaranteed, so if the facility is government accredited and something goes wrong, you won't lose your money. Your RAD payment is also considered exempt when working out your aged pension entitlements.
Depending on your own personal circumstances, you should consider the RAD as if it were a loan - if you have capital available and it is earning less than an after tax rate of 7.06% (the MIPR rate from 1 January, 2023) then it may make sense to pay your accommodation as a RAD, rather than a DAP.
The Minister for Aged Care has decided that the maximum a provider can charge a person without approval is $550,000 as a RAD (or equivalent daily amount).
If you sell your home, you will become a non-homeowner but the amount you pay to the service provider as a refundable accommodation deposit (RAD) is exempt for Centrelink and Veterans' Affairs, and may help to maximise your age pension.
Refundable Accommodation Deposit (RAD)
The benefit of paying a RAD is that it's fully refundable and doesn't have any interest attached to it. Most carers opt for selling their loved one's home to fund the lump sum, which is a possible option that you could consider.
When will a RAD be refunded? When a resident dies the RAD is then required to be refunded to the estate 14 days from the receipt of the Grant of Representation. The aged care facility is required to pay interest on the bond from the date of death to the date of refund.
Negotiate on the Refundable Accommodation Deposit. The RAD (formerly known as the bond) to secure a room at an aged care facility can be as high as $2 million. In many cases these RADs are negotiable, and at times can be as much as halved.
For new residential aged care facilities completed on or after 20 April 2012, or existing facilities that have been significantly refurbished on or after that date, the maximum accommodation supplement (MAS) is $63.14 (from 20 September 2022). For older facilities, a lower MAS is paid.
No interest is payable on a lump sum while a resident is in care. However, providers must pay interest on the lump sum balance to the resident or their estate for any time the provider holds the lump sum after care to the resident has ended.
People with over £23,250 in capital – both savings and investment – will have to pay the full cost of the residential and nursing care home. This sum is known as the capital limit. The capital limit is decided by Government.
In addition to funds received that are held in a financial investment, the value of insurance or compensation payments that have been applied to build, repair or renovate the building or plant can be exempt from the assets test.
For aged care legislation purposes, a protected person is: • your partner or dependent child • your carer1 who is eligible to receive an Australian Government income support payment and who has lived in your home with you for the past 2 years • your close relative who is eligible to receive an Australian Government ...
We assess your and your partner's income from all sources. This includes financial assets such as superannuation. To work out how much income your financial assets produce, we use deeming. Pensions have income and asset limits.
Daily accommodation payment (DAP)
You will need to calculate the resident's DAP based on their RAD. use this formula: DAP = (RAD × MPIR) / 365.
RAD is short for 'Refundable Accommodation Deposit', which is a lump sum payment that is refunded once you leave Eldercare. DAP is short for 'Daily Accommodation Payment', which are ongoing, non-refundable rental-style payments.
RADs are exempt assets when determining your Centrelink/DVA entitlements and are not subject to deeming. So paying a RAD can reduce assessable assets and income and may increase your age pension (or other payments).
A daily accommodation payment is an amount a person may be asked to pay to an approved provider to meet their accommodation costs. A daily accommodation contribution is an amount a person may be asked to pay towards their accommodation costs.
When should I update my asset values with Centrelink? You should update your details with Centrelink anytime your situation or value of assets change and the changes are relatively significant. Centrelink will generally complete a balance update for most recipients annually, commonly in July.
This is called deprivation. If you are more than five financial years away from reaching your age pension age or from receiving any other Centrelink payments, you can gift any amount without affecting its eventual assessment once you reach age pension age.
You and your partner must have no more than $5,000 in combined readily available funds. This includes any liquid assets you can sell. Liquid assets include cash you have on hand, money you have in the bank and financial investments you have.