Questions to Ask an Aged Care Financial Advisor About RADs

Choosing between a Refundable Accommodation Deposit (RAD) and a Daily Accommodation Payment (DAP) isn’t simply a choice between paying once or paying daily. In Australia, residential aged care accommodation can be paid through a RAD, a DAP, or a combination of both. The questions to ask an aged care financial advisor should help you understand how each option could affect your cash flow, assets, family home and Age Pension.

It’s understandable to want a clear answer before making a major financial decision, especially when the details can affect you and your family. This guide covers practical questions about RAD and DAP costs, planning for a move into care, keeping or selling your home, and Age Pension entitlements. Use them to prepare for a conversation that clarifies your options and next steps.

1. The family home: keeping, renting or selling

More than 80% of people receiving aged care in Australia live outside residential aged care homes. Support at home, respite and retirement living are among the possible arrangements. If you’re finding private carers for the elderly, include the cost of that support in your planning. Ask a specialist how a choice now could affect funding residential accommodation later. Home care, a granny flat arrangement or a retirement village can influence your ability to fund residential care in the future.

From 1 January 2016, rental income from a former principal home was included in the aged care means test for all new residential care recipients in Australia. If you rent the property, ask how rental income and property expenses may affect assessable income and care costs. Also discuss vacancy periods, repairs, insurance and who will manage the tenancy. These practical responsibilities can affect the income available for retirement and home expenses.

Selling the family home to fund aged care may reduce your Age Pension eligibility. Keeping it may preserve some Age Pension entitlements, but you’ll need to plan for ongoing costs. Ask the adviser to compare both options based on your assets, income, expected care costs and family plans. Include a spouse or anyone else who may continue living in the home.

Before deciding, list the home’s value, mortgage, rental potential and ongoing expenses. Then ask: “What changes if I sell, rent or keep the family home?” Ask how each option affects the means test, Age Pension and your ability to fund care. Discuss whether a retirement village or granny flat arrangement could affect a later residential-care plan. Ask the adviser to explain the trade-offs, not just how much cash you’d have immediately.

2. Financial planning after moving into care

After moving into residential care, review your financial situation, income and aged care fees together. Ask how pensions, superannuation, investments and rent fit into a plan for daily expenses. If your partner remains at home or may need care later, discuss separate budgets and how one person’s move could affect shared savings. This planning can ease practical and emotional pressure for both of you.

To compare advisers and identify conflicts of interest, ask how they’re paid, what their advice covers and whether they have relevant affiliations. Request the fee arrangement and recommendations in writing so you can compare the scope, costs and potential conflicts clearly. Focus your questions to ask an aged care financial advisor on the decisions that matter most to you.

Ask about the adviser’s experience with aged care and how their advice will address your circumstances, including RADs, DAPs, pensions and residential care costs.

Adviser fees depend on the advice and work involved. Before proceeding, clarify the charges and whether ongoing advice costs will apply.

Ask how selling assets, changing investments or restructuring income could affect tax, aged care fees and Centrelink assessments. Discuss your Age Pension, will, Enduring Power of Attorney, inheritance wishes and family arrangements. A Resident Agreement sets out the services and fees for a residential aged care place, so ask how its terms fit your plan.

Bring tax statements from the last year or two, along with details of your income, assets, debts, superannuation and current care costs. Include relevant estate-planning documents and your partner’s financial details, where appropriate.

Before gifting assets or paying an accommodation deposit, ask how the decision could affect assessable assets, income, cash available for everyday needs and future care costs. A RAD is generally returned to the resident’s estate after death. Thoughtful questions to ask an aged care financial advisor can clarify how these choices fit your family’s plans.

3. Age Pension entitlements

Ask how your financial details affect your Age Pension and aged care means-tested contribution. Services Australia calculates the contribution, and the amount varies from person to person. A financial adviser can help explain which figures shape each assessment and how a change in circumstances may affect your position. Ask for the reasoning behind any estimate, not just the final figure.

How can a RAD or DAP affect your pension and cash flow? A RAD commits funds upfront, while a DAP involves daily payments, so each option leaves a different amount available for other expenses. Private funding may include an individual paying a RAD upfront using proceeds from selling their home. Ask for a comparison that includes your regular income, accessible savings and planned spending, alongside possible effects on your pension assessment.

Selling or renting the family home can change the mix of assets and income used in financial assessments. Ask how the timing of a sale or tenancy, and the treatment of proceeds or rental income, could affect your Centrelink entitlements and aged care costs. Request separate scenarios to compare the likely cash-flow effects instead of relying on a single estimate.

The guidance states that for every A$1,000 above the assets-test threshold, the Age Pension is reduced by A$3.00. Ask how this rule applies to your assessed position and what other financial details matter. Include your partner’s circumstances and the funds you want available for everyday living. You can also compare residential aged care providers while considering accommodation options alongside your financial plan.

Aged Care Made Easy: Featured Directory Listing

Aged Care Made Easy helps you find and compare aged care providers through its Australian directory. After discussing RAD, DAP and pension considerations with a financial adviser, use the directory to explore services that may suit your care needs and preferences.

Featured Directory Listing is an advertising option for aged care providers. Aged Care Made Easy also offers Premium Directory Listing, Aged Care Made Easy Guide Advertisement and Lead Booster Marketing Package options for providers seeking directory or guide advertising.

For you and your family, the directory can support the next step: comparing available provider information alongside your financial plan. Consider the type of care needed, location and personal preferences as you review options. Visit Aged Care Made Easy online to explore the directory.

Take your next step with a clear plan

Before your next conversation, write down what matters most to you: maintaining everyday independence, supporting a partner, or preserving flexibility for future care. These priorities help keep financial decisions connected to the life you want, not just the figures on a statement. The questions to ask an aged care financial advisor can then guide a focused discussion about your options and their trade-offs.

Take time to consider the answers and note any decisions that need further thought. If you’re also exploring aged care services, Aged Care Made Easy’s directory can help you review provider information as you consider your next steps. Explore Aged Care Made Easy and continue at a pace that feels manageable. You can approach the next decision with greater clarity, one practical step at a time.

Frequently Asked Questions

RAD vs DAP: which option should I choose?

Choose the payment approach that best fits your cash-flow needs and financial priorities. A RAD is paid as a lump sum, a DAP is paid daily, and you can combine them. Compare how much cash you’d retain under each approach and how regular payments fit your budget. My Aged Care can help you access aged care assessments, while a financial adviser can explain the financial trade-offs.

What questions should I ask about aged care costs and fees?

Ask for an itemised explanation of accommodation, care and additional services, including which charges may change over time. Ask how the provider’s services match your assessed needs and preferences, and how each charge appears in the Resident Agreement. My Aged Care is the Australian Government’s starting point for accessing aged care assessments and connecting with approved providers. The provider can explain its own fees and services.

How are refundable accommodation deposits and daily accommodation payments calculated?

A RAD is a lump-sum accommodation payment; a DAP is a daily payment linked to the accommodation amount. A combination means paying part upfront and the remaining accommodation amount through daily payments. Ask the aged care provider to show its calculation in writing, including the room’s accommodation price, the daily amount and how a partial lump-sum payment changes it.

How do aged care means assessments affect fees and government support?

An aged care means assessment helps determine the means-tested contribution, which Services Australia calculates and which varies from person to person. The assessment considers financial details such as income and assets. My Aged Care helps people access aged care assessments and connect with approved providers, while Services Australia’s calculation informs the contribution. Keep records of changes in circumstances so your assessment reflects your current situation.

What are the current Australian aged care fee caps and thresholds?

Fee caps and thresholds depend on the fee type and your circumstances, so ask which limits apply to your assessment and how the relevant period is counted. New entrants to aged care have been subject to a revised fee structure since 1 November 2025. The changes may make contributions clearer for some people, but can also mean different costs to plan for. Ask for a breakdown before budgeting.