Forman Financial Services

Aged Care Strategy – Accommodation Payment – Pay accommodation payment as a Refundable Accommodation Deposit (RAD)

This can benefit people who:

  • are liable to pay an accommodation payment for aged care
  • are receiving a social security/DVA means tested payment

Potential Benefits:

  • Paying a RAD saves the person DAP on the outstanding accommodation payment balance at the government interest rate (currently 5.96%pa)
  • Amounts invested in a RAD are exempt under income and assets tests for social security purposes
  • RAD paid is an assessable asset for the aged care means test assessment however they are not deemed
  • Choosing a more expensive room and paying a higher RAD may result in an increased social security entitlement and reduced aged care fees.
  • Choosing a room or facility with a higher accommodation payment may provide a higher standard of accommodation

Things to be aware of:

  • RADs are government guaranteed in the event the aged care facility becomes bankrupt
  • Once a RAD is paid the aged care facility does not have to refund the RAD until the person leaves the aged care facility
  • Costs involved in selling existing investments to pay the RAD
  • Consider person’s estate planning wishes as RAD is returned to the estate of the person upon their passing

Aged Care & Home Care can seem complex.  We have a special offer for general advice for $225.00.
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