If you or a loved one is moving or need to move into an Aged Care home (also known as a nursing home), you are most likely will be worried on how to fund the RAD. We look at a few things that you need to know about the RAD.
Costs of Residential Care
Aged Care costs are divided into three categories:
RAD is not lost moneyAs the name suggest, the RAD is fully refundable when you leave care. Note, if you elected to deduct other fees from your RAD to help with cash flow, then what you get back in return will be impacted by how much has been deducted.
The RAD is also guaranteed by the Federal Government if paid to an approved provider. Check the MyAgedCare website for a list of approved providers. This means that you won’t lose your RAD in the event the provider goes under.
The RAD does not need to be paid as a lump sumAccommodation payments are quoted as a lump sum. But can be converted to a daily equivalent. This is known as the Daily Accommodation Payment (DAP). The interest rate used for this conversion is currently 5.70% (for entry to 31 December 2017). For example, a RAD of $500,000 is converted to a DAP of $78.30 per day.
You have up to 28 days after moving into care to decide how you want to pay the RAD. This can be paid as the full RAD, full DAP or combination of both.
Even if you have less assets than the published RAD it may be affordableIf you don’t have enough assets to pay the RAD the first step may be to see if you qualify for government concessions as a “low-means resident”. This would require your share of assessable assets to be less than $162,815.20.
Speak to a professional that specialise in aged care advice to help you decide what’s the most suitable for your situation and wants.
At Futura Financial Group, we specialise in aged care advice. We can provided you with aged care financial advice that will help with cash flow and minimise aged care costs. Our advisers can offer financial planning and will help you and your family see the bigger picture in addition to the financial aspects.
AFP® ,B.Bus(Acc), B.Comp, DFP, ADFP
Accredited Aged Care ProfessionalTM
Authorised Representative No. 1238040
Disclaimer: Information on this site may be regarded as general advice. That is, your personal objectives, needs or financial situations were not taken into account when preparing this information. Accordingly, you should consider the appropriateness of any general advice we have given you, having regard to your own objectives, financial situation and needs before acting on it. Where the information relates to a particular financial product, you should obtain and consider the relevant product disclosure statement before making any decision to purchase that financial product. Rates are current to 19th March 2018.
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