Aged Care Finance Solutions
Frequently asked questions
1. What is an accommodation bond or Refundable Accommodation Deposit (RAD)?
An accommodation bond was an amount of money paid to an aged care facility, by a resident. It was essentially an interest free loan to the facility. A bond was applicable only to low level care or high level facilities that offer extra services. Since 1st July 2014 an Refundable Accommodation Deposit has applied to all residential care where the residents have the capacity to contribute. An accommodation payment can also be made through a Daily Accommodation Payment (DAP), which represents the daily interest amount charged on any unpaid Refundable Accommodation Deposit amount.
2. Do I need to sell my family home to fund a Refundable Accommodation Deposit (RAD)?
No, our Aged Care Credit Advisers specialise in finding solutions so you do not have to sell your family home.
3. Can the former family home be rented?
Yes it can be rented. Rental funds received can be used to help cover costs of the loan or the maintenance of the property or to assist with the Aged Care Costs.
4. Can I get advice on how to pay for my RAD and/or DAP?
Yes, Aged Care Finance Solutions specialises in providing credit advice and obtaining financial solutions. We also work with specialist Aged Care Financial Planners who can help with these complex rules and calculations.
5. What does extra services mean?
This is a status approved by the Department of Health and Aging that allows a facility to provide hotel or luxury accommodation and services within the facility for which a fee can be charged.
6. What is A.C.A.T. ?
Aged Care Assessment Team (A.C.A.T.) carries out an aged care assessment on the applicant determining the need for aged care. This system ranks applicants on a high to low needs basis. This is the first step required to enter an aged care facility or to receive respite care.
For ACAT enquiries phone 1800 200 442.
7. How does a RAD affect my assets?
Since 1st July 2014 changes in Government policy have seen RAD's become assessable assets for the Aged Care Fees. However, if a house is sold and a RAD paid the extra funds received for the sale held may be included in the Asset test. If the house is kept and the RAD borrowed the house has a concessional treatment which means the asset est is usually lower if the house is held. This area has many rules and we work with specialist aged care financial planners to ensure families are fully informed of the costs of the available options.
8. Does the Australian Government guarantee the refund of the RAD?
The Australian Government guarantees a refund of any lump sum RAD when a resident leaves a facility. It is paid to the resident or to the residents estate by the facility. The guarantee would only come into play if the facility cannot repay the RAD.
9. What is residential respite care?
Residential respite care is short term accommodation within residential care and provides mainly for carers to take some time off from their caring roles. Residential respite care depends on availability of beds in an aged care facility. It does not incur a RAD charge.
10. What is DAP?
A Daily Accommodation Payment is an interest amount calculated by applying the government set Maximum Permissible Interest rate to any portion of a RAD that is unpaid. If the RAD is fully paid then there is no DAP.
11. What is a RAD?
Refundable Accommodation Deposit is the amount paid by a resident for the accommodation in the Aged Care facility. A refundable accommodation deposit works like an interest-free loan to an aged care home. The balance of the deposit is refunded when you leave the aged care home less any amounts you have agreed to have deducted.
12. Can I use my RAD refund to pay off my Aged Care Loan
Yes, this is what most people do. Sometimes the interest charged will mean their is an extra balance outstanding that also has to be paid off. But in some cases if payments to the loan have been made from the property rents, there may be no extra amounts to be paid, or even funds left over after the loan is repaid.