Aged care costs
The fees for residential aged care, combining a daily care fee with an accommodation payment.
Residential aged care involves several charges: a basic daily fee set as a percentage of the pension, a means-tested care fee, and an accommodation payment for the room itself.
Accommodation can be paid as a Refundable Accommodation Deposit — a large lump sum refunded when you leave — or as a Daily Accommodation Payment, or a combination.
The family home receives partial exemption in the means test, with only a capped value counted if certain relatives continue to live there. Whether to sell or keep it is one of the most consequential decisions families face.
The scale of a RAD
Accommodation deposits commonly run from several hundred thousand dollars upward, which is why the decision about the family home so often drives the outcome.
The bit people get wrong
Keeping the home and renting it out can increase both the means-tested care fee and reduce Age Pension entitlement, because rental income and the property value affect the assessments.
Common questions
Is a RAD refunded?
Yes, in full when you leave the facility, less any amounts you agreed to have deducted. It is government guaranteed.
How is the home treated?
Only a capped value is counted in the aged care means test, and it is fully exempt if a protected person such as a spouse continues living there.
Should we sell the family home?
It depends on the interaction between the RAD, pension entitlements and the means-tested fee. This is an area where specialist advice reliably pays for itself.