A question often asked on our articles or through calls to our office is when does the RAD get refunded? There are three main situations when this happens.
A resident passes away
In this case, the Refundable Accomodation Deposit (RAD) (less any allowable amounts deducted from care provided) has to be refunded within 14 days of the provider receiving:
- proof of probate of the resident’s Will (the official proving of a Will) or
- letters of administration (authority to administer the estate of someone who has died without making a Will).
If you are moving homes, it is important to give the current home as much notice as possible. The notice period will determine when you receieve the refund.
- If you give them more than 14 days notice, you will recieve the refund on the day you leave.
- If you give them up to 14 days before you leave, the refund will be returned within 14 days of you giving notice.
- If you provide no notice, the refund will be returned within 14 days of you leaving.
Permantly leaving aged care
If you decide to permantely leave aged care, the lump sum must be refunded within 14 days of you leaving.
Does interest apply?
Interest is not earned on the RAD when you are in care, however it does apply during the 14 day refund period at the base interest rate. If a provider does not refund the amount within the 14 days, interest is then payable at the higher rate known as the MPIR. The rates can be found here.
To view more information, please look at the following articles.