Aged Residential (Nursing) Home: Basic Daily Fee, RAD, Income & Assets Assessment

Few questions on the financial side of thing of Residential Aged Care (if anyone can advice, it would be greatly appreciated):

  • Upon submitting the Income and Assets assessment to DHS, what will be the outcome of this? As in, will it be in forms of % (percentage) contribution for Basic Daily Fee and % (percentage) contribution for DAP? or will it be the actual $ for Basic Daily Fee & DAP? If it's the latter then I don't understand because each Nursing Home has different Max daily fee and different Max RAD.

EDIT: it does sound that the outcome will be in the actual $ contribution as per the link here but what I don't get, each nursing home has different max RAD and different max Daily Fees …

for example: we surveyed an aged care home that we like, with Maximum refundable deposit of $295,000 and Maximum daily payments of $44.78 and say the assessment tells us that we need to contribute on both Basic Daily Fee & DAP. how does it work? will they (Centrelink DHS) tell us that we need to at bare minimum contribute $100,000 towards RAD and based on that, the max daily fee will be $29.59/day (based on current 5.54% interest rate)? but then, when we submit the assessment for asset and income, they (DHS) don't know which nursing home we're going to and whether we'll be going for a single room or a room with 4 people, so how would they know how much that we need to contribute?

  • with the $100,000 RAD, I understand that the Australian government guarantee on the refund once Granpa leave the nursing home; who does this refund go to? I presume when we enter the Aged residential home on permanent basis, there'll be paperwork for us to fill in the nominated person for the refund of RAD?

  • just for me to understand the relationship between RAD and daily fee; in the above example, say we put in the Max RAD of $295,000, does this mean we don't have to pay anything on daily basis? (in real case scenario, i am actually thinking of submitting Financial Hardship as Granpa won't have access to his Pension).



  • You can reduce the daily fee by increasing the refundable RAD and vice versa. Granpa's pension will be utilised firstly and wholely to pay the daily fee. The Rad will be refunded to Grandpa (or to his estate where it will be held in probate for 3 months) upon vacating.
    You should talk to a DVA consultant or check Centrelink website.

    • Granpa's pension will be utilised firstly and wholely to pay the daily fee.

      ° he doesn't have access to pension being a new migrant.

      The Rad will be refunded to Grandpa

      ° the RAD won't be Granpa, it'll be mom's. Will this 100% refunded to her once he leave nursing home?

  • You need to submit an Aged Care Assets Assessments and from that a RACF can work out what RAD amount they are seeking. Most, if not all, RACF will want to know that assessment before considering you and to work out if you are eligible to pay a RAD.

    For example, once the assessment is done, it might say you have assets of $1M (family home only, assuming no spouse/dependent kids etc) - and they seek a RAD of $750,000.

    If you don't pay the RAD in full, then you will be charged a DAP.

    The Basic Care fee is payable by all residents.

    IN the above example, you need to speak to an accountant (or a RACF specialist) to work out what 'RAD%/DAP%' is finanancially better, or if you should sell/rent the house and pay the RAD in full/part of it etc and how the house can affect eligibility for the pension etc.

    • and they seek a RAD of $750,000. If you don't pay the RAD in full, then you will be charged a DAP. The Basic Care fee is payable by all residents.

      Let's use as an example; say i put down that deposit in full amount as per their request (sum of $750K), do i get charged DAP? Correct me if I am wrong but my understanding is no, there shouldn't be any DAP.

  • What happened to your grandpa and the hospital drama. I don’t think you ever replied back after all the help everyone gave

  • Based on my experience for my mother (in nursing home, in SA for just over 2 years);
    there are 3 fees to be paid: Accommodation, Daily Care Fee and Government Means Tested Fee.

    Accommodation Fee: can be paid in full (amount set by the nursing home), paid in part with a daily fee that changes according to the amount paid, or paid as a daily accommodation fee with no lump payment. Any money paid in a lump sum is known as a Refundable Accommodation Deposit. When the person concerned leaves the Nursing Home permanently, this amount is returned to the person or their estate if they are deceased. Any daily accommodation costs are non-refundable.

    Daily Care fees: these are independent of the accommodation charges and are government set for a base rate. Nursing homes may charge additional amounts, this is always fully disclosed prior to signing any entry agreement/contract. We get a letter from CentreLink every 3 months setting these out the amount of the base care charge.

    Government Means Tested Fee: This is paid to the nursing home, but is a government charge. It has a life time cap, currently around $67,000. If the person has accessed home care package or other forms of government supported services, they may have already begun to pay some of this amount.

    We accessed a private broker, who helped us through the paperwork, explained options and the various charges. This was incredibly helpful. If you contact a non for profit nursing home, they may have information sessions that will assist in planning.

    Good luck.

    • Any money paid in a lump sum is known as a Refundable Accommodation Deposit. When the person concerned leaves the Nursing Home permanently, this amount is returned to the person or their estate if they are deceased

      In our case, gramps won't be the one putting in the deposit, so it'll be my mom's. Will the money 100% refunded to her when gramps leave the nursing home?

      • It would need some legal advice in this case. Perhaps it can be set up as a loan, payable on refund of the RAD. I don't have experience with someone else paying the RAD, as my mother, and others I know who have gone into nursing homes have usually had to sell their homes to make the payment.

        • very interesting; Grandpa got literally zero money; i'll do further research on this. Thanks!

          • @tempura: I would be seeking info from the nursing homes or a broker. If your grandfather has few/no assets, he may fit into a very different category, not requiring a RAD payment. There are places available for people in this position. It shouldn't be necessary for other family members to pay your grandfather's RAD.

            I can't stress this enough, seek out information from informed professionals. The not for profit homes (such as those run by Southern Cross Care) offer information packs that will assist you. Their staff are very user friendly.

    • Rolts- where do you find a private broker please?

      • We found an advisor through contacts in the Nursing fields who had worked in aged care. When visiting some of the nursing homes, they offered information that also included brokers and financial advisors for this situation. Also the hospital liason person has assisted us in locating a broker in a second case.


    It’s a fricken nightmare, wife has had both parents go into a nursing home this year, 89 and 93, home care, aged care, Centrelink, all a bloody mess, and on top of that their house in a retirement village has to be refurbished to be sold, so will be screwed on that with costs and fees. Nursing home is sucking them dry.
    Whole thing is a disaster to deal with, no quality of life just waiting to die.

    • so how's the DAP & RAD & mean tested fee?


        They are getting hit hard not sure the amounts , as my wife has only put in 100k till their unit sells, then will go down some. But 2 in at once will drain their savings, if they lived in there for 10 years or less they would have nothing. Can’t see that happening though both have dementia.
        At least they are getting looked after well in their last days, we don’t care about getting any money just hope it lasts, but’s it’s a nightmare to go through almost a full time job dealing with all these agencies.
        Your almost better off getting to that stage with nothing and going in on just the pension.
        Nursing homes are for the rich or poor not the middle bracket imo.

        We are in a north coast nsw city so full payment is $350k each, but they/ we can’t afford that.
        Also we had no choice they couldn’t fend for themselves and my wife couldn’t do it all we still have 1 kid at school and run a business.

        • but they/ we can’t afford that.

          yeah same boat, short term ok, long-term is problematic. may need to apply for financial hardship.


            @tempura: Haha yeah my wife said exactly that a few hours ago, good thing is once they get in there the nursing home said they never kick anyone out for money reasons.