Industry Jargon

Industry jargon, only the facts from ACFA

The Age Care industry uses a vocabulary all of its own. At ACFA we understand this jargon and are here to translate the jargon to plain English for you.

Refundable Accommodation Deposit (RAD)

The RAD is a lump sum amount charged by the Aged Care Facility to a new resident.  This amount cannot be higher than (from 1st July 2014) $550,000 unless the facility has written authorisation from the government.

Generally speaking most facilities will be charging up to this amount rather than over this amount.  This amount is paid as a lump sum and the entire balance of the lump sum is returned to the resident or the resident’s estate, upon the resident leaving the facility.  This amount replaces the historical “Accommodation Bond”.  If you entered care before 1st July 2014, the rules governing Accommodation Bonds still applies to you.

Accommodation Bond/ Charge

An Accommodation Bond/Charge is an amount of money that is invoiced by the Facility to the resident upon entry to the Facility. Accommodation Bonds range in prices with some around $95,000 and others as high as $650,000. The amount of the Accommodation Bond is determined on a residents assets and each Facilities own discretion

Accommodation Bonds/Charges will not apply to new residents entering care from 1st July 2014, but remain current for those residents already in care by this date.

Retention Amount

For residents who entered a facility prior to 1st July 2014, they are likely to have a “Retention Amount” included in their original Accommodation Bond.  Under the old guidelines Facilities could retain a portion of money that each resident pays when entering a Facility for the first time. The retention amount was set by the government and generally taken from the resident on a monthly basis for a maximum of 60 months (5 years). After this time the Aged Care Facility has received the maximum retention amount and must not charge a further retention fee.

No Retention Amount is taken from residents entering care for the first time from 1st July 2014.

Daily Accommodation Payment (DAP)

The DAP is a daily payment charged by the Aged Care Facility to a new resident from 1st July 2014.  The DAP only applies if the resident has chosen (for financial or other reasons) not to pay the Refundable Accommodation Deposit (RAD – Lump sum entry amount) to the Aged Care Facility entirely.

Unlike the RAD which is refunded to the resident or their estate upon the resident leaving the Aged Care Facility, the DAP is not refunded upon leaving the facility.

Residents from 1st July 2014 who enter a facility may choose to pay for their accommodation needs as an upfront payment only (RAD), a combination of a lump sum RAD and some DAP (daily payments) or DAP payments only.  The choice is the residents and does not need to be told to the Aged Care Facility until the 29th day of residency.

Any resident who pays for part or all of their accommodation payment via daily payments will have interest charged on the amount that was not paid as a lump sum (RAD) to the Aged Care Facility.

This interest rate is set by the government and may change quarterly.


ACAT stands for “Aged Care Assessment Team”.  This team of government employees are responsible for assessing people’s eligibility and needs when considering either entering an Aged Care Facility or receiving further assistance to remain at home.

The guidelines have changed (from 1st July 2014) and therefore anyone entering an Aged Care Facility from this time will receive a letter from ACAT confirming their eligibility to enter a facility.  Residents from 1st July 2014 will no longer be classified as requiring “Low” or “High” care and will only be assessed as being eligible or not eligible for services.


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