What Happens to the RAD When Someone Dies?
The refund process, timelines, and what your family needs to know.
The 14-day refund rule
When a resident passes away, the aged care provider must refund the RAD within 14 days. This is a legal requirement. The refund is paid to the estate of the deceased — typically to the executor or administrator named in the will.
What gets deducted?
The provider can deduct the following from the RAD refund:
- RAD retention — 2% per year of the stay (capped at 5 years / 10%). For someone who entered after 1 November 2025.
- Unpaid fees — any outstanding daily care fees, means-tested care fees, or extra service fees
- Agreed deductions — any amounts the resident agreed to have deducted (e.g., for specific services)
The provider cannot deduct for room cleaning, refurbishment, or general wear and tear.
What if the provider is late?
If the provider fails to refund within 14 days, they must pay interest on the outstanding amount. The interest rate is the base interest rate set by the Reserve Bank of Australia.
If you're having trouble getting a timely refund, you can lodge a complaint with the Aged Care Quality and Safety Commission.
Government guarantee
If the aged care provider becomes insolvent and cannot refund the RAD, the Australian Government guarantees the refund under the Accommodation Payment Guarantee Scheme.
This means the estate will receive the RAD refund regardless of the provider's financial situation. The guarantee covers the full refund amount (minus legitimate deductions).
Worked example
RAD retention: $500,000 × 2% × 2.5 years = $25,000
Unpaid fees: $1,200 (outstanding daily fees)
Total deductions: $26,200
Refund to estate: $473,800
Refund due within: 14 days of death
What about DAP?
If the person was paying DAP (daily payments), there is no refund. DAP ceases on the date of death, and any payment for days after death must be refunded by the provider. But the DAP payments made during the person's stay are not recoverable.
Planning ahead
Understanding how the RAD refund works is important for estate planning. The refund becomes an asset of the estate and is distributed according to the will. Families should ensure the executor knows about the RAD and the 14-day refund timeline.
This information is general in nature. Estate and probate matters should be discussed with a solicitor. Aged care financial matters should be discussed with a specialist aged care financial advisor.