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Supercharge Your Superannuation & Maximise Your Retirement Savings

Welcome back everyone. In the sixth and final part of my blog series, I want to discuss something that affects all of our financial journeys: Superannuation. Perhaps you’re concerned about your retirement savings? Or maybe uncertain about how to make the most .....

Wealth, Aged Care - 3 min read

When you move into an aged care home, you will be confronted with the decision about how to pay for your accommodations. Once you move in, you have 28 days in which to decide on your method of payment, one of which is the RAD (Refundable Accommodation Deposit). A common question we hear is, “If I pay a RAD, how secure is my deposit?”

This is a good question, especially because your RAD can be a significant amount of money, and just part of the aged care costs you'll need to consider. A RAD is a lump sum payment that works like an interest-free loan to your aged care facility. When you leave the aged care home, the balance of your RAD is refunded to you, less any amounts that you’ve agreed to have deducted.


Security of Your Deposit

Terms of your Refundable Accommodation Deposit must be set out in writing at the beginning of your stay in residential care. Therefore, there shouldn’t be any surprises about deductions when you leave.

Care fees and the costs of additional services may be included in deductions, but you will know about these items from the onset. In order to avoid surprises later on, read all the fine print in your original paperwork from your aged care facility, and regularly review it so you don’t forget which fees can be deducted from your Refundable Accommodation Deposit


How is My RAD Used?

The aged care provider holds the RAD for you while you’re living in their facility. They can invest the money, use it to improve their facilities or buy land, or use it to pay for maintenance. Your RAD helps the facility to stay up-to-date and provide the kinds of facilities and services that will best meet your needs.


Rollover of RAD

If you decide to move into a different aged care facility after you’ve already paid your Refundable Accommodation Deposit, you won’t simply roll your RAD over to the new facility, unless you paid your RAD before 1 July 2014. The current rules regarding RAD stipulate that your RAD be refunded to you and then you can pay your new RAD to the new aged care home.


How is My RAD Secured?

RAD funds are guaranteed by the Australian government as long as you’ve paid the RAD to an aged care service that is approved by the Commonwealth Government. In order to make sure that your RAD is secure, ask any residential service you’re considering to show you evidence that their service is approved by the government.

Aged care finances can be complex. Feel free to contact us to talk through your own situation or to seek advice on how to structure your personal finances to pay for your own or a loved one’s aged care.


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