RAD and DAP: Aged Care Accommodation Payments Explained
RAD and DAP explained: the lump-sum Refundable Accommodation Deposit vs the Daily Accommodation Payment, how each works, and the 2025 rules.
Two ways to pay for the same thing
How a RAD works
How a DAP works
The government guarantee
The 2025 retention rule
Choosing between them
Frequently asked questions
What is the difference between a RAD and a DAP?
A RAD is a refundable lump sum paid upfront for your accommodation, returned when you leave or pass away. A DAP is a non-refundable daily payment for the same room price instead. You can also pay a combination of both.
Is a Refundable Accommodation Deposit safe?
Refundable deposits are guaranteed by the Australian Government. If a provider fails and cannot repay, the government refunds the RAD balance to the resident or their estate. This guarantee is why many families are comfortable paying a lump sum.
What is the 2025 retention rule?
For people first entering residential care on or after 1 November 2025 who pay a refundable deposit, the provider can retain a small percentage each year (indicatively 2%) for up to five years. So the refund may be a little less than the amount paid.
Do I have to decide straight away?
No. You usually have a period after moving in (commonly 28 days) to choose how to pay, and you can switch between a RAD and a DAP. Because the amounts are large and affect means testing, many families get independent financial advice first.