A RAD is a lump sum amount you are required to pay toward your accommodation in an aged-care home. Depending on the value of your assets, you may be asked to pay a RAD when you enter an aged care residence. A RAD works like an interest-free loan to the aged-care facility. Any income earned from the RAD is used by the aged-care home to improve accommodation and services.
Selling your home may worsen your financial situation depending on what other assets you own and the amount of RAD. Sometimes, though, selling your home is the right decision. We recommend you immediately seek financial advice on the best way to fund the RAD once you have spoken to the aged-care facility.
By law, the aged care facility cannot ask you to pay RAD that will leave you with less than $46,500 (as at 19th March 2017) after paying the RAD. Beyond that however, aged care facilities can charge what they like, and the amount you will pay is determined by a mix of your assets, the socio-economic profile of the suburb, and supply and demand for beds in your area.
The RAD is now advertised on the MyAgedCare website and it is capped at $550,000.
Once it is looking likely your family member will be entering aged care you, you should make an initial approach us for advice. When your loved one is undergoing an Aged Care Assessment with the ACAT team you should seek advice immediately. It is imperative that no assets are sold before you seek professional guidance as this may limit the options available to you and could cost you a lot of money.
Your first port of call is usually a free health assessment with an ACAT team to assess if you are eligible for aged care. If you are unsure you may contact My Aged Care directly on 1800 200 422, or your doctor or local hospital can refer you to an ACAT. Feel free to call us if unsure.
Andrew Tynan Financial Planning Pty Ltd ABN 43 113 607 739, trading as Brisbane Aged Care Financial Advisers is an authorised representative of Charter Financial Planning Limited (ABN 35 002 976 294), Australian Financial Services Licensee.