Cost of living in a residential care facility - Part 1.
Depending on the circumstances of the individual at the time of admission to a residential care facility, a Refundable Accommodation Deposit (RAD) can be required.
The average RAD charged to residents entering residential care as per the Aged Care Financial Success Survey in December 2017 was $323,849; however, in the more affluent areas of Melbourne and Sydney, RAD can be more than $1,000,000.
RAD acts like an interest-free loan to an elderly care home. The balance of the refundable accommodation deposit (after any agreed deductions) will be refunded to the resident or their estate on termination of the agreement for residential services.
The RAD is protected under the Aged Care (Bond Security) Amendment Bill 2013. In other words, if the facility does become insolvent, the Australian Government guarantees the refund of your deposit.