A refundable accommodation deposit is not the same as an inheritance gift to an aged-care provider. Australian Government guidance says a provider must refund the balance of a refundable accommodation deposit, refundable accommodation contribution or older accommodation bond when a resident permanently leaves care. After death, the recipient is usually the estate and the timing depends on acceptable estate evidence.
Families choosing a home should investigate that exit process before paying a large lump sum. The advertised room price, the deposit actually paid, permitted retention, authorised deductions and interest on a late refund are separate figures. A promise that “the RAD is guaranteed” does not explain the final balance or the documents the provider will demand.
Record the starting balance and arrangement date
Keep the signed room-price agreement, payment receipt and resident agreement together. Identify whether the person is under the pre-2014, 1 July 2014 or 1 November 2025 arrangements because deductions can differ. The starting file should show every lump-sum payment and any DAP component. Without that baseline, the executor cannot test the closing statement.
Understand retention before comparing refunds
For residents subject to the 1 November 2025 arrangements, official guidance describes RAD or RAC retention calculated daily at two per cent per year and limited to five years. Ask the provider to illustrate retention for the expected stay without presenting the illustration as a guaranteed duration. Compare homes using the same deposit and move-in date.
Separate agreed deductions from ordinary fees
The deposit balance should not become a general account from which any disputed charge is taken. List each deduction authorised by the agreement, including retention where applicable, and keep daily fees, optional services, damage claims and final pharmacy invoices separate. Ask which items may legally be deducted and which must be invoiced to the estate in the normal way.
Prepare estate authority early
Government guidance requires a death-related refund within fourteen days after the provider sees probate, letters of administration or other reasonable evidence. Ask before admission what the provider accepts as reasonable evidence, who receives certified copies and how identity and bank details are verified. This avoids sending sensitive documents to an unconfirmed email address during bereavement.
Check the final service date
Accommodation and service charges should stop according to the applicable rules and agreement. The provider’s exiting-resident guidance distinguishes the day of death, room clearance and later estate administration. Request a dated ledger showing the last charge for accommodation, care and optional services. Do not accept an undefined “estate administration period” as a continuing room fee.
Calculate the statutory refund clock
The executor should record the date the provider received acceptable evidence, the amount acknowledged and the legislated due date. If the provider asks for another document, request the reason in writing and whether the refund period has begun. A verbal exchange is difficult to reconstruct when interest and several beneficiaries later depend on a single date.
Verify interest on a delayed refund
Australian guidance says interest may be payable when a lump-sum balance is not refunded within the required period. Ask which base interest rate applies, from what day it runs and how it appears on the remittance. Recalculate the period independently. A prompt partial payment does not automatically resolve interest on a balance still withheld.
Protect the room-clearance process
Agree in advance who inventories belongings, controls keys, collects valuables and authorises disposal. Photograph the room at handover and obtain a receipt for keys. Property damage claims should identify evidence, contractual basis and amount. A bereaved family should not waive a large deposit balance merely to secure rapid access to personal belongings.
Review provider security and referral incentives
Check that the service is approved and that its accommodation pricing and prudential obligations are current. If an adviser recommends paying a large RAD, ask whether the adviser or related business receives a provider commission. Compare the cash-flow effect of RAD, DAP and combination choices with independent financial advice where appropriate.
Use one closing-account checklist
Curalune can help families compare refund clauses before selection and use its fuller contact service to obtain provider answers on evidence, deductions and contacts. Curalune does not guarantee availability, admission, a refund amount or payment date. The provider remains responsible for its obligations, and the executor or adviser must validate the estate position.
Request a pre-admission refund illustration
Ask the provider to show an illustrative closing statement for death after six months, three years and more than five years. It should start with the paid lump sum, display retention and other authorised deductions, and end with the estimated refundable balance. The examples test the contract; they are not predictions of lifespan.
Coordinate the executor and provider contact
Nominate one authorised estate contact and one backup. Record the provider’s finance officer, secure document channel and escalation route. Multiple relatives sending inconsistent instructions can delay identity checks. The executor should circulate the final statement to beneficiaries only after privacy, authority and account details have been verified.
Reconcile tax and financial advice separately
A refund can affect estate liquidity, liabilities and distributions. Ask an accountant or solicitor how the balance should be recorded, especially when another person originally funded part of the deposit. The aged-care provider supplies its ledger; it should not decide beneficial ownership or tax treatment for the family.
Close only after money and statement agree
Match the bank receipt to principal, deductions and interest on the final remittance. Obtain written confirmation that the resident account is closed and no later automatic debits remain. If the amount differs, ask for the calculation before signing a broad release. A clean closure needs both payment and an intelligible ledger.
FAQ
Is the whole original RAD always refunded? No. The refundable balance may reflect permitted retention and authorised deductions under the applicable arrangement.
When is a death-related refund due? Official guidance states within fourteen days after the provider sees probate, letters of administration or other reasonable evidence.
Can the home keep charging until belongings are removed? Do not assume so; request the legal and contractual basis and a dated final ledger.
Does Curalune guarantee the estate will recover the deposit? No. Curalune supports comparison and contact but does not guarantee refunds, availability or admission.