Is it best to be able to pay maximum RAD?

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Is it best to be able to pay maximum RAD?

My mum has been in a low care hostel since 2012. She’s 88, has dementia and the usual things, but is overall pretty well. She is on the age pension.
She may need to move to high care in the future and we are wondering whether we need to make provision out of our own funds to help her fund the RAD.  She has a RAD of approx $300k where she is currently and looking around, this is well short of the typical ( maximum)  RAD being asked these days, and the gap will only increase with time.  Using the residential care estimator, it seems she will definitely have to pay a RAD or DAP, but how much of the maximum RAD is opaque. Do they only ask what the income and assets assessment concludes is available or do we have to make up the difference somehow?
We’re not looking at gold plated tap type places but for example, the local well regarded high care facility currently has a max RAD of $390k, which she could not afford without help from us.
Would facilities offer a place to someone who can fund the maximum RAD over someone who can’t? Is she likely to be disadvantaged/ limited to a real extent if she is unable to fund the maximum RAD?
Thank you very much for any advice. 

Jill_Donaldson

Hi Pippa,

Given that the RAD is refunded within 14 days of a resident leaving an Aged Care home whilst there is no refund for the DAP then it is always best to pay as much of the RAD as you can comfortably afford. The RAD is government backed and any RAD over $550,000 has to be Government approved. 

The DAP is calculate as a daily cost that is charged monthly if the RAD has not been paid in full. The DAP is calculated as a percentage of the remaining RAD.

For example if the RAD on a room is $400,000 and the RAD paid is $300,000 then the resident will pay a DAP of $100,000 x 5.72% / 365. ie $15.68.

In addition all residents in aged care, including respite residents, are required to pay a basic daily fee as a contribution towards care and living expenses. This daily fee equates to 85% of the basic single age pension. Depending on the aged care home there may be fees for extra and additional services.

Residents may also be asked to pay a means tested fee depending on their income and assets assessment. This is worked out by the Department of Human Services. This fee is capped at $26,566.54 ( as at 20th September 2017) and is indexed on 20th March and 20th September each year.

I hope this helps

Jill

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