What Happens to the RAD

What Happens to the RAD After a Resident Leaves or Passes Away?

ByRob Laurie

What Happens to the RAD After a Resident Leaves or Passes Away?

Last updated: 13 February 2026. This article is general information only and doesn’t consider your objectives, financial situation or needs. Rules can change. For official guidance, refer to My Aged Care – accommodation refunds, Department of Health – refunding lump sums, and (for Age Pension treatment) the DSS Social Security Guide.

What happens to the RAD is one of the most common questions families ask when someone leaves an aged care home or passes away. A Refundable Accommodation Deposit (RAD) is often one of the biggest cheques a family ever writes — and while the word “refundable” sounds reassuring, the practical reality can involve:

  • refund timeframes (and what triggers the “clock”)
  • paperwork steps (especially after a death)
  • interest rules if a refund is delayed
  • allowed deductions and retention amounts set out in the resident agreement
  • estate administration and executor responsibilities

This guide explains what happens to the RAD (and other refundable accommodation lump sums) when a resident:

  • permanently leaves care
  • transfers to another aged care home
  • passes away

It also includes a practical checklist for residents, executors and adult children — so you can reduce delays and avoid nasty surprises.

If you want help modelling an accommodation strategy, protecting an at-home spouse, and avoiding accidental fee blowouts, see Aged Care Financial Planning Services. For upfront fee transparency, visit Aged Care Financial Advice Costs, or reach us via Contact Us.

Key takeaways

  • Refund timing is set by rules. Refundable accommodation lump sums are generally due to be refunded within defined timeframes after leaving, transferring, or (after death) once the provider receives the required authority documents. Confirm the current rules on My Aged Care.
  • After death, it’s usually not “14 days from the date of death”. The practical trigger is commonly when probate or letters of administration are provided (unless the provider chooses to refund earlier). See My Aged Care – accommodation refunds.
  • Refunds aren’t always “RAD in, RAD out”. The refunded amount is typically the balance after agreed deductions and any applicable retention amounts under the agreement and rules.
  • Interest can apply. Rules may require interest to be paid during the refund period and at a higher rate if the refund is late. See Health – refunding lump sums.
  • There are prudential protections and a backstop guarantee scheme. Providers must manage refundable deposits under prudential requirements, and government arrangements can apply if a provider becomes insolvent and can’t repay. Start at My Aged Care and the Aged Care Quality and Safety Commission.

Table of contents

What is a RAD (and what else counts as a refundable lump sum)?

A Refundable Accommodation Deposit (RAD) is a lump sum paid for accommodation in residential aged care. It sits within the broader category of refundable accommodation lump sums that must be refunded when a resident leaves care, transfers, or passes away (subject to the rules and the resident agreement).

Other refundable lump sums you may hear about include:

  • Refundable Accommodation Contribution (RAC) (often relevant where a person receives accommodation assistance and pays a contribution rather than a full RAD)
  • Accommodation bonds (typically for residents who entered care under older arrangements)

My Aged Care provides the official overview here: Aged care home accommodation refunds.

Plain English: if it’s a refundable lump sum for accommodation, it should come back — but when it comes back and how much comes back depends on the scenario, the agreement, and the allowed deductions/retentions.

RAD vs DAP: does the payment choice affect refunds?

Accommodation can generally be paid as:

  • RAD (lump sum)
  • DAP (Daily Accommodation Payment — non-refundable daily payments)
  • a combination (part RAD, part DAP)

Only the lump sum component is refundable — daily payments are not. My Aged Care explains these options and how they work here: Understanding aged care home accommodation costs.

If you want decision-focused guides that help you compare the options, start with:

Why this matters for refunds: if you paid a full RAD, there’s more refundable capital at stake. If you paid part RAD (and part DAP), only the RAD portion is refunded. This becomes important when an at-home spouse, estate cashflow, or a transfer to a new facility relies on that refund landing on time.

What happens to the RAD if a resident permanently leaves?

If a resident permanently leaves an aged care home, the provider must refund the resident’s refundable accommodation lump sum balance within the timeframe required by the rules (and may need to pay interest until it is refunded). The Department of Health summarises provider obligations here: Refunding lump sums in residential aged care.

What families should expect in practice:

  1. A final balance calculation (RAD paid minus allowable deductions/retentions)
  2. Confirmation of the payee (who is legally entitled to receive the refund)
  3. Payment within the required period (with interest rules applying in some circumstances)

Practical tip: Ask the provider for a written statement showing (a) the balance to be refunded, (b) each deduction/retention and its basis in the agreement, and (c) the expected refund date.

What happens if the resident transfers to another aged care home?

Transfers can be more time-sensitive because the refunded RAD is often needed to fund the accommodation payment at the new home. The starting point for the official rules is My Aged Care – accommodation refunds.

What usually makes the biggest difference: written notice timing and clean paperwork. The more organised the transfer process, the easier it is to coordinate refund timing with the new agreement.

Adviser tip: If you’re transferring, give written notice as early as possible and ask the provider to confirm the refund due date in writing. That reduces delays and helps you avoid paying higher daily payments unnecessarily at the new home while you’re waiting for funds to arrive.

What happens to the RAD when a resident passes away?

When a resident passes away, the provider must refund the refundable lump sum balance (less any allowable deductions/retentions). In practice, the key issue is often: what documents does the provider need before paying the estate?

The Department of Health outlines the refund framework providers must follow here: Refunding lump sums in residential aged care.

Most families get caught by one detail: after death, it’s commonly not “14 days from the date of death”. The practical “clock” is usually linked to when the provider receives probate or letters of administration — unless the provider chooses to refund earlier because they are satisfied they’ve identified the correct legal recipient.

What you can do immediately: notify the provider, ask for the final balance statement, ask what documents they will accept, and get legal administration moving if it will be required.

What can be deducted before a refund (and what are retention amounts)?

This is where families often feel blindsided — even though the detail is usually written into the resident agreement and governed by the rules.

1) Agreed deductions

Providers may deduct amounts that were agreed in writing and set out in the accommodation agreement before refunding the balance. The Department of Health is clear that deductions need to be agreed and recorded appropriately: Health – refunding lump sums.

Examples families commonly see:

  • unpaid care fees and daily fees (where the agreement permits deduction)
  • other amounts the resident agreed could be deducted from the RAD balance

2) Retention amounts (where applicable)

Some arrangements include retention amounts that reduce the refunded balance. If you want the regulatory context around refundable deposits and provider responsibilities, the Aged Care Quality and Safety Commission publishes provider and compliance guidance.

Practical implication: depending on the resident’s agreement and the rules at the time, the refunded amount may not be the original RAD paid. This is one reason we encourage families to model the longer-term cost and estate impact of accommodation choices — not just the “weekly affordability”.

Related reading: The impact of RAD on estate planning and inheritance.

Interest rules and late refunds (why rates matter)

Interest can apply during the refund period in certain circumstances and may be higher if a provider refunds late. The Department of Health explains this in its refund guidance: Health – refunding lump sums.

Families often hear two rate terms discussed (the names and settings can change over time):

  • base interest rate concepts applying during the standard refund period (in relevant situations)
  • maximum permissible interest rate (MPIR) concepts that may apply where the refund is late

If you want a plain-English explanation of why the MPIR matters (and how it can affect the cost of accommodation choices over time), see: MPIR & interest rates explained.

Action step: if the refund date slips, ask the provider to confirm (in writing) the interest rate being applied and the period it covers.

How the RAD is treated in the estate (and executor responsibilities)

In many scenarios, once refunded, the RAD becomes an estate asset (or is paid to the person legally entitled to receive it). The executor (or administrator) is responsible for ensuring the refund is correctly handled and recorded for estate administration.

Executor responsibilities commonly include:

  • notifying the provider and requesting the final balance statement
  • confirming the provider’s document requirements
  • providing probate or letters of administration where required
  • ensuring the refund is directed to the correct legal entity (often the estate account)
  • keeping records of deductions, retention amounts and any interest for the estate accounts

If decision-making authority was unclear during the resident’s life (or family dynamics are strained), it’s worth reading: Power of attorney and aged care: what you need to know.

What if there is no will?

If there is no valid will (intestacy), someone generally needs to obtain letters of administration to deal with the estate. Practically, that often slows the RAD refund timeline because the provider needs to be satisfied it is paying the correct legal authority.

Practical reality: intestacy commonly delays cashflow. If the family expects the RAD refund to fund funeral costs, legal work, or ongoing support for a surviving spouse, build in extra time and make contingency plans.

Will a RAD refund affect the Age Pension or aged care fees?

This is where families can get whiplash because different systems can treat the same money differently.

Age Pension (Centrelink / DVA)

The DSS Social Security Guide discusses how certain items may be treated for social security purposes, including refundable deposits in specific contexts. Always confirm the current position with Services Australia (or DVA where relevant), because the outcome can depend on timing and who receives the funds.

Key practical point: once a RAD is refunded into a bank account (for example, to a surviving spouse or to an estate), it may then be treated like cash/investments — which can change assessability depending on who holds it and what happens next.

Aged care means assessment

Aged care and social security are not the same assessment. For background on how aged care means testing works and why timing matters, see: Aged care means testing.

Practical takeaway: if you’re planning to move facilities, pay a new RAD, or re-position funds after a death, get advice before changing anything — because timing can change outcomes.

What happens if the aged care provider becomes insolvent?

It’s rare, but families do ask: “What if the provider can’t repay the RAD?” Providers must manage refundable deposits under prudential requirements. For more information about quality and compliance oversight, see the Aged Care Quality and Safety Commission.

Practical takeaway: even with protections in place, it’s still sensible to do basic due diligence and ask providers about their refund process and how they handle transfer timing.

Executor and family checklist

Use this checklist to reduce delays and avoid unnecessary stress.

If the resident is leaving care (permanent departure)

  • Ask for a written final statement showing the refundable balance, deductions/retentions and expected refund date.
  • Confirm where the refund will be paid and what identity/authority documents are required.
  • If the refund date slips, request the interest calculation details in writing.

If the resident is transferring homes

  • Give written notice early and ask the current home to confirm the refund due date in writing.
  • Ask the new home what payment method is required upfront (RAD/DAP/combination) while the refund is in transit.
  • Keep all emails/letters. Transfers are where “he said/she said” becomes expensive.

If the resident has passed away

  • Notify the provider promptly and request the final balance statement.
  • Ask what documents the provider needs (probate or letters of administration, and whether they can refund earlier).
  • If the estate needs cashflow, move quickly on legal administration and consider interim funding plans.
  • Ensure the refund is paid to the correct entity (usually the estate account) and recorded properly for distribution.

For a broader view of aged care costs and how accommodation payments interact with other fees, see: A guide to the costs of aged care.

Common mistakes (and how to avoid them)

  • Assuming “refundable” means “immediate”. Build in time for calculations, verification, and (after death) legal authority documents.
  • Not reading the deductions/retention clauses. The refund is usually the balance after what’s allowed under the agreement and rules.
  • Letting transfer timing drift. Late notice and messy communication can create avoidable daily payment costs.
  • Forgetting the at-home spouse. A delayed refund can cause serious cashflow stress if the spouse relied on those funds.
  • Changing investments immediately after a refund hits the bank. The “after refund” plan can affect pension outcomes and longer-term affordability.
  • Unclear authority to act. If a child is doing the running around, confirm POA and legal authority early: Power of Attorney and aged care.

FAQs

What happens to the RAD if a resident leaves an aged care home?

Generally, the provider must refund the refundable accommodation lump sum balance after the resident permanently leaves, subject to the required timeframe and any agreed deductions/retentions. Confirm the current rules on My Aged Care – accommodation refunds and Health – refunding lump sums.

What happens to the RAD after a resident passes away?

The RAD balance is generally refunded to the estate (less allowable deductions/retentions). The practical trigger is often when the provider receives probate or letters of administration, unless they choose to refund earlier.

Is it always a full refund of the RAD?

Not always. The refunded amount is typically the balance after agreed deductions (recorded in the agreement) and any applicable retention amounts under the rules and agreement.

Can an aged care home deduct fees from the RAD before refunding it?

Providers may be able to deduct certain amounts if they were agreed in writing and recorded in the accommodation agreement. If you’re unsure, request the final statement and ask where each deduction is authorised.

Does RAD vs DAP affect what gets refunded?

Yes. Only the lump sum (RAD) component is refundable. Daily accommodation payments (DAP) are not refundable. For the trade-offs, see Understanding RAD and DAP in aged care.

Will a RAD refund affect the Age Pension?

It can, depending on who receives the refunded money and what happens next. Confirm with Services Australia (or DVA) and refer to the DSS Social Security Guide.

What if the provider is late refunding the RAD?

Ask the provider to confirm (in writing) the refund due date and the interest calculation they are applying. Interest can be relevant during the refund period and may be higher if the refund is late, depending on the rules in force.

When specialist advice is worth it

RAD refunds sit at the intersection of aged care agreements, means assessments, estate administration and sometimes Centrelink/DVA outcomes. Advice is often worth it when:

  • there’s an at-home spouse whose cashflow must be protected
  • the family is choosing RAD vs DAP and wants a clear, numbers-based recommendation
  • there’s a transfer happening and timing matters
  • assets are complex (multiple properties, trusts/companies, blended families)
  • the estate plan is outdated and the RAD will materially change “fairness” outcomes

Helpful related reading:

Need help now? We can model the accommodation strategy, map the refund and timing risks, and ensure your plan protects the right people in the right order.
Learn more at our aged care financial planning services, view cost of advice, or reach out via Contact Us.

General advice only disclaimer

This information is general in nature and doesn’t consider your objectives, financial situation or needs. Aged care and Centrelink rules can change—confirm details with Services Australia/My Aged Care or seek personal advice.

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What Happens to the RAD After a Resident Leaves or Passes Away

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