If a parent moves into residential aged care, the most useful time to seek financial advice is before they enter, where possible. The accommodation payment is only one part of the decision. Your family may also need to consider the home, other assets, ongoing care costs and any effect on the Age Pension. Looking at these together can help you understand the choices before making a commitment.
Why timing matters
A move into care can happen quickly. Families may be visiting facilities, arranging assessments and gathering financial records while trying to decide what to do with a parent’s home.
Starting the financial conversation early gives you more time to compare options and understand what care may cost over time. Families do not always realise that a financial adviser can help them work through these decisions before a parent enters care.
Compare accommodation payment options
You and the aged care home must agree on a room price before entry. How your parent pays towards accommodation depends partly on their financial assessment. The main payment options are:
| Option | How it works |
|---|---|
| Refundable accommodation deposit (RAD) | A lump-sum payment. The remaining balance is refunded when your parent leaves care, after any applicable deductions. |
| Daily accommodation payment (DAP) | An ongoing, non-refundable payment instead of a full lump sum. |
| Combination | Part lump sum and part daily payment. |
Some residents receive government assistance with accommodation and pay a refundable accommodation contribution (RAC), a daily accommodation contribution (DAC), or a combination instead. For people first entering care on or after 1 November 2025, retention deductions may apply to a RAD or RAC, while DAPs may be indexed. These details matter when comparing the longer-term cost of each option.
Your parent does not have to choose a payment method before moving in. Until a lump sum is paid, daily payments apply. Ask each facility for its room prices and detailed fee schedule, then consider the payment options alongside your parent’s income and access to cash.
Review the home and other assets
Should your parent keep or sell the family home? The answer may affect how they fund accommodation, what they pay towards care and what remains available for other needs. The home is assessed differently depending on the circumstances, including whether someone who qualifies as a protected person continues to live there.
The review should also consider superannuation, investments, income, debts and any trusts or business interests. Make sure to bring together relevant powers of attorney and estate documents so the right people can participate in decisions and your parent’s broader wishes are understood.
Take the next steps
A practical starting point is to:
- Contact My Aged Care to arrange an assessment and discuss available services.
- Gather details of your parent’s income, assets and home.
- Visit suitable facilities and request their room prices and fee schedules.
- Complete the financial assessment through Services Australia, where required.
- Compare payment options and any decision about the home with an aged care financial adviser.
A financial assessment can be completed before entry. Services Australia’s fee advice letter sets out the contributions that may apply, although circumstances can change and the assessment may need updating.
If your family is weighing up a home sale, accommodation payments or complex assets, Angel Advisory can help you consider the financial choices in light of your parent’s circumstances. Contact us on +61 3 9087 1015 or [email protected].
This article provides general information only and is not personal financial advice. Fees and assessment rules can change. Check current details with My Aged Care and Services Australia and seek advice before making a financial decision.
