If your income and assets are above the threshold for government support, but you cannot, or do not wish to pay the RAD applicable to your chosen aged care facility, you can choose to instead pay a Daily Accommodation Payment (DAP).
You may also choose to keep the home as a rental property, and potentially use the income from that to help fund any aged care fees. However, it is important to remember that rental income can affect your aged pension, and you may need to pay income tax as well. You're also at the mercy of the local rental market.
RAD and Extra Services Fees can be negotiated with aged care facilities. Conversely, the Basic Daily Care Fee and the Means Tested Care Fee are non-negotiable as the fees are established by the Department of Human Services.
Paying the RAD and the MTCF provides a better outcome unless the borrowing rate is higher than the prevailing interest rate of about 6 per cent per annum. Generally, if the average interest rate increases, the MPIR will also increase, as will the DAP.
The Work Bonus income bank is useful for pensioners who wish to work, particularly those who undertake intermittent or occasional work. Note: from 1 December 2022 to 31 December 2023, a one-off, temporary credit of $4,000 applies to Work Bonus income bank balances.
While the RAD is included as an asset, it is not considered a financial asset and therefore no income is deemed to be earned on this amount. Any amount paid as a RAD is also excluded from the age pension asset test and may impact their age pensions.
How long do I have to make my decision about RAD? You have 30 days from entering aged care accommodation to decide how you want to make your payment. If you choose to pay a lump sum (the RAD) you then have 6 months to pay the money to your provider. Until the RAD is paid, you will be a set daily fee with interest.
The RAD is fully refundable to the resident when they leave the provider or is returned to the resident's estate if they pass away. Daily accommodation payments — Instead of a lump-sum RAD, residents can pay a rental-style DAP.
Paying RAD
The Refundable Accommodation Deposit (RAD) is a Centrelink exempt asset that can help retain or increase social security entitlements (if any), and reduce the means tested amount. While the RAD is an assessable aged care asset, no income is assessed for the income test.
RADs are exempt assets when determining your Centrelink/DVA entitlements and are not subject to deeming. So paying a RAD can reduce assessable assets and income and may increase your age pension (or other payments).
A BATNA, or Best Alternative to Negotiated Agreement, is the best option in the view of one party in a negotiation if the talks break down. A strong BATNA gives that party a reasonably attractive alternative to negotiation. If an agreement cannot be reached the BATNA can be implemented with minimal disruption.
If you use a part of your principal home for business only, that will be included in your assets test - land or buildings. Centrelink advises you need to contact them within 14 days of selling the home.
You need to tell us when your circumstances change. Then we can assess your eligibility for payments and services using the correct details. This includes changes to real estate assets for you and your partner. Read more about real estate assets and how they can affect your payment.
Refundable Accommodation Deposit (RAD)
The benefit of paying a RAD is that it's fully refundable and doesn't have any interest attached to it. Most carers opt for selling their loved one's home to fund the lump sum, which is a possible option that you could consider.
When will a RAD be refunded? When a resident dies the RAD is then required to be refunded to the estate 14 days from the receipt of the Grant of Representation. The aged care facility is required to pay interest on the bond from the date of death to the date of refund.
If you leave your principal home to go into aged care, we may include your home in your assets test. Read about aged care means test assessments. If you leave your principal home due to illness and enter a care situation, we may exempt your home from the assets test.
Unfortunately, there is no magical cure for RAD. Because it is an acquired disorder and occurs during critical periods of brain development, there is no medication or medical treatment that can “cure” the illness or reduce the symptoms.
Complications. Without proper treatment, reactive attachment disorder can continue for several years and may have lifelong consequences. These can include problems with relationships, social interactions, mental and physical health, behavior, intellectual development, and substance abuse.
Outlook / Prognosis
Many children who receive treatment for reactive attachment disorder form stable, healthy bonds with their primary caretakers and others in their life. Children who don't receive treatment can face risks of ongoing emotional issues.
For example, it has the power to obtain your information from other government agencies as well as accessing information from banks, building societies and credit union accounts. It can do this without your prior consent or knowledge. Centrelink's investigation is not limited to recent deposits.
We check your bank account information is up to date. We do this to check we paid you the right payment and amount in the past.
Can I Get the Pension if I Have Super? Having superannuation savings does not deny you from receiving Age Pension payments. Eligibility for the Age Pension is based on an Assets Test and an Income Test.