How does payment for residential aged care work?

We understand that everyone’s financial situation is different.

Whether you’re on a pension or are a self-funded retiree, we have residential aged care payment options that are right for you.

Payment for aged care is carefully controlled by the Federal Government.  Presbyterian Aged Care will assist you to understand the costs associated with your care.

Our specialist staff are with you every step of the way.
Contact us on 1800 722 679


Paying for your accommodation in a residential aged care home is assessed by the Federal Government. Many people pay for their accommodation, whilst some are subsidised.

There are three ways you can choose to pay for your accommodation:

OPTION A: Refundable Accommodation Deposit (RAD)

A RAD is a once-off lump sum that is fully refunded when the resident leaves. A bit like buying a house & getting your money back when you leave/sell it. You do not have to sell your room when you leave though, your money is just refunded.

How much you pay depends upon the particular aged care home you go to, and which room you choose.

For example:
If your refundable accommodation deposit is $400,000 and you pay the entire lump sum, you receive $400,000 back when you leave.


OPTION B: Daily Accommodation Payment (DAP)

You can select instead to pay a daily accommodation payment. This option is like paying rent in the open market, and likewise you do not receive the money back. It can however be very helpful if you don’t have a lump-sum to put down.

It is worked out via an interest payment (set by the federal government) that is applied to the RAD amount.

For example:
Based on a RAD of $400,000 and a government set interest rate of 7.06%

Your daily accommodation payment is calculated in this way:

DAP = RAD x (government set interest rate / 365)
DAP = 400,000 x (7.06% / 365)
DAP = $77.36 per day

*Note: 366 will be used in calculation for the financial year when it is a leap year.

OPTION C: A combination of Refundable Accommodation Deposit (RAD) and a Daily Accommodation Payment (DAP)

If you don’t have the full RAD amount, but can put something down as a deposit, you can select your own combination of putting down some of the lump sum – and making up the rest with a “rent” (DAP) payment. This lowers the “rent” (DAP) payment you have to pay (because you’ve put down some deposit).


For example:
You may wish to pay half RAD and half DAP. Based on the same RAD and government set interest rate as the previous examples

You pay $200,000 on entering your aged care home (your refundable lump sum/RAD)

And then a DAP of {DAP = 200,000 x (7.06% / 365)}
DAP = $38.68



Basic Daily Fee

Everyone in residential aged care pays a basic daily fee.

This is set by the government and equates to about 85% of the basic single aged pension.

The fee is income tested and contributes for your general living expenses like meals, laundry and heating. 


Other Services

Any additional services like going to the doctor, pharmacy prescriptions and hairdressing are paid for by you.

Government asset assessment

It’s important to know that you may be asked to pay other fees depending on means and asset testing conducted by Centrelink or the Department of Veteran’s Affairs.

Presbyterian Aged Care ensures that all people needing care have access to all our residential care facilities – regardless of their financial position.