An adult child may offer to pay a parent’s Refundable Accommodation Deposit (RAD) so a residential aged-care move can proceed. That solves an immediate cash problem but creates four separate questions: what the provider charges, how the payment affects the resident’s means assessment, whether the family transfer is a gift or loan, and who receives the refund when the resident leaves or dies.
Before transferring funds, obtain the provider’s documents, model the resident’s fees and arrange appropriate advice for the private family transaction. A refundable RAD does not automatically make the contributing relative the refund recipient.
Identify the accommodation amount before discussing family funding
Ask the home for the published accommodation price, the room details and the amount it proposes to charge this resident. Separate the RAD from the Daily Accommodation Payment (DAP), recurring care fees and optional services. A headline room price is not a complete first-month budget.
Record whether the resident will pay the full price, an accommodation contribution or no accommodation amount after the means assessment. If it is incomplete, compare a temporary DAP with the later lump-sum scenario.
Do not let urgency force a premature payment choice
My Aged Care states that a person cannot be required to choose how to pay for accommodation before moving in. After entry, a resident may choose a lump sum, daily payments or a combination. A family can therefore assess the room and admission terms without wiring the full RAD merely to keep the application alive.
Confirm the decision deadline, DAP before payment, bank-validation process and the date daily charges stop. Pause over any unexplained same-day transfer demand.
Understand the counter-intuitive asset rule
The Australian Government’s accommodation guidance says a refundable lump sum is counted as the resident’s asset even when a family member pays it. The family’s source of funds does not make the RAD invisible to the resident’s aged-care means assessment.
This point matters because the resident’s means status is fixed at entry while they remain in the same home, but later payment of a lump sum may still affect other amounts. My Aged Care warns that it may increase the hotelling contribution, non-clinical care contribution, means-tested care fee or accommodation contribution, depending on the resident’s circumstances. Obtain an updated estimate rather than assuming the family payment only reduces the DAP.
Choose and document gift or loan deliberately
The provider’s agreement does not replace a private agreement between resident and relative. Decide whether the money is a gift, repayable loan or another lawful advance. The choice can affect estate planning, tax, benefits and recovery rights.
Use an independent solicitor and, where needed, a qualified financial adviser. Record the amount, date, purpose, interest, repayment trigger, security and what happens if the refund is smaller. A relative acting under a power of attorney must stay within that authority.
Keep three contracts separate
The comparison file should contain three distinct sets of documents. First is the resident’s agreement with the aged-care provider, covering accommodation, services, deductions and refunds. Second is any private gift or loan agreement with the family funder. Third is the resident’s means-assessment and fee material from the relevant government process.
The home cannot certify the private loan or promise government fee treatment. The private agreement also cannot rewrite the provider’s refund obligations.
Price the DAP bridge and transfer timing
Until the agreed lump sum is received, the provider may charge the applicable DAP on the unpaid accommodation balance. Request a dated calculation showing the balance, rate, daily amount and proposed transfer date. Include weekends and bank-processing time in the cash-flow plan.
Compare all DAP, part RAD plus lower DAP, and full RAD. Add recurring fees under each scenario. A large lump sum ties up capital and may change other resident charges.
Control retentions and agreed deductions
For residents entering from 1 November 2025, My Aged Care explains that providers deduct a retention amount from refundable lump sums at 2 per cent a year, subject to the applicable rules. Providers may also make deductions the resident has agreed to, including an arrangement to draw daily accommodation payments from the deposit.
Before payment, ask for the proposed deduction authority, the frequency of balance statements and an example showing the refund after a given stay. Reject broad wording that permits undefined charges to be removed from the RAD. Every optional service should remain identifiable rather than disappearing into the refundable balance.
Confirm the legal refund recipient
Government guidance says the provider refunds the balance to the resident or the resident’s estate, less permitted retentions and agreed deductions. A relative who supplied the money should not assume the provider will redirect the refund to them. If the family intends repayment, the private legal arrangement must address how that claim operates.
Ask what identity and bank evidence is required, what happens on transfer, and which estate documents are needed after death. Published timing is generally 14 days after leaving, subject to notice and estate rules. Keep liquidity for the gap.
Compare homes with a family-funded RAD matrix
Use identical columns for each shortlisted home: published room price, proposed resident amount, means-assessment status, RAD/DAP combination, current rate, payment deadline, bank verification, retention, other deductions, statements, transfer process, refund documents and first-month total. Mark every answer confirmed, conditional or unknown.
Add columns for gift or loan, adviser review, signing authority, source of funds and intended estate treatment.
Calculate the real first-year cost
Start with the RAD amount but do not label the entire transfer a “cost,” because a remaining balance is refundable. Show the opportunity cost of the capital separately. Add DAP before settlement, mandatory recurring fees, projected means-tested amounts, retentions, authorised deductions, legal advice and any bank or transfer costs.
Run short-stay and twelve-month cases. Record unequal sibling contributions individually, especially if the family borrows, sells investments or needs the refund for another commitment.
Check commissions and conflicts before using placement help
A placement consultant may be paid by the family, a participating home or both. Ask who pays, when the commission is earned, whether it changes by provider and whether non-paying homes are included. A recommendation to maximise the RAD may also conflict with the family’s need for liquidity.
Keep the adviser evaluating the family transaction separate from anyone rewarded for securing admission.
Follow a controlled admission sequence
First obtain the room price, agreement, draft fee schedule and current availability. Second, confirm the resident’s assessment status and obtain alternative RAD/DAP calculations. Third, decide the private gift or loan structure with appropriate advice. Fourth, validate payment instructions independently and retain evidence of the transfer. Finally, obtain the provider’s receipt, updated daily charge and opening RAD balance.
No family payment should substitute for the provider’s clinical assessment or formal admission decision. Keep a fallback home and a temporary cash-flow plan until admission is confirmed.
Use Curalune to compare confirmed options
Curalune’s option-selection service can shortlist Australian aged-care homes by care needs, location, budget and the family’s preferred accommodation-payment structure. The fuller contact service can ask selected homes for consistent answers about room prices, current availability, RAD/DAP combinations, deductions, statements and refund administration.
Curalune does not guarantee availability or admission, the amount of any fee, government assessment outcome, legal enforceability or refund timing. The provider decides admission, government processes determine applicable support and charges, and qualified advisers must address the family’s legal and financial arrangement. Curalune helps organise verified options before the family commits funds.
Frequently asked questions
Does a RAD paid by an adult child count as the resident’s asset?
Yes. My Aged Care states that the refundable lump sum is counted as the resident’s asset even if a family member paid it. Obtain a current fee estimate for the resident’s circumstances.
Must the family pay the RAD before the resident moves in?
No provider should require the resident to choose the accommodation payment method before moving in. Confirm the post-entry choice period and the DAP payable until any lump sum arrives.
Will the provider refund the RAD directly to the child who paid it?
Do not assume so. Official guidance describes payment to the resident or the resident’s estate. A family repayment claim needs its own properly advised documentation.
Can the provider deduct charges from the RAD?
Retentions may apply under the current rules, and other deductions may be made when agreed. Ask for each authority, the calculation and regular balance statements before transferring money.
Can Curalune guarantee a room while the family arranges funds?
No. Curalune can compare homes and obtain stated terms, but only the provider can confirm current availability and admission, and it may change before the agreement is completed.