Residents can now pay a RAD before means tested amount assessed

Prior to 31 October 2026, an interim period applied where a person entered residential aged care and their means-tested amount had not yet been determined, provided they were not subject to means not disclosed status.

The interim period generally runs from the resident’s start day until their means-tested amount is determined.

During this interim period, any accommodation payment was required to be made as daily accommodation payments (DAP). This meant a resident who had sufficient funds and wanted to pay a refundable accommodation deposit (RAD) could not do so until their means-tested amount was determined.

From 31 October 2026, residents in the interim period have greater flexibility and can choose to make their accommodation payment as a:

• refundable accommodation (RAD);
• daily accommodation payment (DAP); or
• combination of both.

Importantly, the change is not limited to new accommodation agreements. The new rules apply from commencement to accommodation agreements made before, on or after 31 October 2026.

This means an existing resident who is still in the interim period on 31 October 2026 may also be able to take advantage of the new payment options.

The existing protections during the interim period continue to apply. The accommodation payment cannot exceed the agreed accommodation payment amount, although the provider may charge a lower amount. If the subsequent means assessment determines that the resident has low means status, or that they have otherwise paid more than was properly payable, the provider must refund the overpaid amount.

FirstTech tip

For clients in the interim period, consider whether paying some or all of their accommodation payment as a refundable deposit may be appropriate. This may reduce the daily accommodation payments they would otherwise incur while waiting for their means-tested amount to be determined.