A residential aged-care home may quote a refundable accommodation deposit, a daily accommodation payment or a combination. A family with cash or investments can feel pressure to choose the largest lump sum because it reduces the daily payment. That is not the only legal or financial test. Australian Government guidance states that a provider cannot accept a refundable deposit that would leave the older person with less than the minimum permissible asset value. The protected amount is set by the rules and is approximately 2.25 times the basic Age Pension amount.
The exact threshold can change, so a buyer should verify the current figure at the decision date rather than copying an old example. The aim is to preserve money for clothing, personal spending and unforeseen needs while comparing the real cost of each payment mix.
Confirm whether the quote is a payment or contribution
Means testing determines whether the person pays an accommodation payment or an accommodation contribution. Someone able to meet the full accommodation supplement may negotiate an accommodation payment; a person with lower means may instead pay a contribution limited by the applicable assessment. Ask the home to identify the category used in its offer and the evidence still outstanding.
Do not treat an advertised room price as the resident’s final assessed obligation. Separate the provider’s published price, the agreed room price and the amount supported by the means assessment.
Calculate the asset position on the payment day
List cash, deposits, investments, debts and amounts already committed. Then model the position immediately after the proposed lump-sum transfer. The provider must not accept an amount that pushes assets below the minimum permissible asset value, but the family should also keep a larger practical buffer where expenses justify it.
Use current values and avoid counting an asset that cannot be sold or accessed in time. If ownership is shared, under dispute or subject to a loan, obtain suitable advice before presenting it as available cash.
Compare RAD, DAP and a mixed arrangement
Request three written scenarios for the same room and start date: full refundable deposit, full daily payment and a nominated combination. Each scenario should show the lump sum, daily rate, calculation method, retention amounts, permitted deductions and refund arrangements.
Compare cash flow over one month, one year and five years. A large deposit may reduce daily outgoings but also removes liquidity and may be subject to mandatory retention. A daily payment preserves assets but creates a continuing expense and may be indexed under the applicable arrangements.
Read the accommodation agreement before transferring funds
Government guidance says an accommodation agreement must be in place before services start and must explain the start date, room charge, payment method, reductions, refunds, room and services, moves within the home and deductions from the refundable balance. Ask for the full agreement and explanatory information before authorising a transfer.
Check that verbal concessions appear in the document. The room identifier, agreed price and refund recipient must be clear. Do not send money to account details supplied only through an unverified message.
Separate accommodation from care and optional services
The deposit or daily accommodation payment covers the room arrangement; it is not the total aged-care bill. Add the basic daily fee, means-tested care contribution if applicable, additional or optional services, pharmacy, transport and personal expenses. Ask which amounts may be deducted from the refundable balance and which will be invoiced separately.
Only deductions allowed by law and agreed in writing should be modelled. A provider’s marketing worksheet is not a substitute for the agreement and current government fee advice.
Protect liquidity for the first months
Estimate at least six months of expenses outside the deposit. Include the resident’s personal allowance, insurance, property costs during a sale, partner’s household expenses, tax, medical appointments and moving costs. If the home purchase decision depends on selling a property, test a delayed-settlement scenario.
A compliant deposit can still be imprudent if it leaves no accessible buffer above the legal floor. The statutory minimum is a boundary, not a recommendation to transfer every other dollar.
Admission remains a separate provider decision
The aged-care law sets agreement requirements but providers run their own admission processes. They may consider vacancies, means status and whether they can meet the person’s care needs. Obtain written confirmation of the room, proposed start date and clinical acceptance before giving up another option.
Ask what assessment remains, who gives final approval and how long the offer stays open. A financial quote does not prove that the home has approved admission.
Use a disciplined payment sequence
- Obtain the care assessment and current means information.
- Confirm the room, clinical fit and proposed entry date.
- Receive the published and agreed accommodation prices.
- Model full deposit, daily payment and mixed options.
- Check the current minimum permissible asset value.
- Review the agreement, deductions and refund terms.
- Verify bank details and pay only the chosen lawful amount.
Keep the calculation and transfer evidence with the resident agreement. This is particularly important if another person acts under a power of attorney.
Disclose adviser commissions and product conflicts
A placement adviser may receive a fee from the chosen home. A financial adviser may recommend investments or asset sales that generate separate remuneration. Ask each adviser who pays them, whether payment depends on admission and what alternatives were excluded.
The provider should confirm availability and accommodation terms directly. Financial or legal advice should come from appropriately qualified professionals where the resident’s assets, authority or tax position is complex.
How Curalune can support the comparison
Curalune’s option-selection service can organise homes by care fit, room type, documented price and payment structure. The fuller contact service can prepare consistent questions about vacancies, assessment, agreement terms, refundable balances and the proposed start date.
Curalune does not guarantee availability or admission. It does not set the protected asset threshold, complete the means assessment or provide personal financial advice.
Frequently asked questions
Can a provider accept a deposit that leaves the resident below the protected amount?
No. Government guidance says a provider cannot accept a refundable deposit that would leave the person below the minimum permissible asset value.
Is the minimum permissible asset value fixed forever?
No. It is set under the rules and linked approximately to the basic Age Pension amount, so verify the current amount when deciding.
Does a RAD quote confirm a bed?
No. The provider separately considers vacancies and care suitability. Obtain an admission confirmation as well as the financial quote.
Can Curalune recommend the exact RAD amount?
Curalune can structure comparisons and contacts but does not give personal financial advice or guarantee availability or admission.