Refundable Accommodation Deposits and Deceased Estates: What Executors Need to Know

What happens to a RAD after death?

A Refundable Accommodation Deposit is a lump sum paid to a residential aged-care provider for the resident's accommodation. It sits alongside — and is separate from — ongoing fees such as the Basic Daily Fee, the means-tested care contribution and any additional or extra-service fees. For a general walk-through of RAD, DAP and the current fee framework, see our guide to aged-care costs, RAD, DAP and the fee reforms.

When the resident dies, in general terms:

• service and accommodation charging must be reconciled to the date of death under the Act, the Rules and the agreements, and only authorised deductions may be made;
• any Daily Accommodation Payment that had been drawn from the RAD stops accruing on the same date;
• the remaining RAD balance becomes refundable, subject to permitted deductions; and
• the refund is generally paid to the deceased resident's estate within the statutory timeframe.

The precise timing and the permitted deductions are set by Commonwealth aged-care legislation and the specific Accommodation Agreement. Providers vary in how quickly they process refunds.

Is the RAD part of the estate?

Yes. Once the provider is no longer entitled to hold the RAD, the refundable balance is generally an asset of the estate. It is not held jointly with a family member, does not pass by survivorship, and does not follow a superannuation-style nomination. It falls into the estate and is distributed under the Will or, if there is no Will, the intestacy rules. The executor deals with it in the same way as bank accounts, shares and other estate assets.

Who should the provider deal with?

The right point of contact changes over the course of administration:

• Immediately after death. The provider will usually deal with the person named as the resident's representative in their records for practical matters — notice of death, personal belongings, room clearance and initial account queries.
• Before a grant. Executors should notify the provider in writing that they are the named executor, request the RAD statement, and confirm what the provider will require to release the refund.
• Once probate or letters of administration issue. The provider should deal with the executor or administrator on all financial matters, including the RAD refund and account reconciliation.

Providers commonly require a sealed copy of the grant before releasing significant balances, in the same way banks do. Executors should not assume the RAD will be paid on a death certificate alone.

Does probate matter?

Often, yes — but not always. The statutory question is whether the provider has evidence that satisfactorily establishes who is legally entitled to the refund. A grant of probate (or letters of administration) is a common form of that evidence, and providers commonly ask for one, particularly for larger balances; however, a grant is not the only route under s 311 and rr 313-5/313-10. Whether a grant is worthwhile is one of several factors executors weigh when deciding whether probate is required for a particular estate. Our probate in Victoria guide and executors' guide to estate administration cover the broader probate framework. On executor duties generally, see executor duties in Victoria.

Executor checklist: issue, why it matters, what to check

Timing, statements and records

The Aged Care Act 2024 (Cth) sets the statutory timeframes within which a registered provider must refund a RAD balance following a resident's death (Chapter 4, Part 4, Division 7 of the Aged Care Act 2024 (Cth), particularly s 311, together with rr 313-5 and 313-10 of the Aged Care Rules 2025). Under s 311, where a resident dies, the 14-day refund period begins once the registered provider is shown a grant of probate, letters of administration, or other satisfactory evidence establishing who is legally entitled to receive the refund. The RAD balance (net of permitted deductions) is payable within 14 days of that triggering event.

If the refund is late, interest is payable in two stages. From the day after the resident's death until the end of the statutory refund period, interest accrues at the Base Interest Rate (BIR) current on the first day of that refund period. From the day after the refund period ends until payment is made, interest accrues at the higher Maximum Permissible Interest Rate (MPIR) current on that day (not the MPIR in force at the resident's date of entry). Both rates are published by the Department of Health, Disability and Ageing and change quarterly — for example, for the quarter 1 July–30 September 2026 the BIR is 3.25% p.a. and the MPIR is 8.43% p.a. Executors and providers should always confirm the rate current for the relevant period rather than relying on a previously quoted figure.

Separately, RAD accommodation prices above $789,686 (the approval threshold from 1 July 2026 to 30 June 2027) require prior IHACPA approval — this is an approval threshold, not a statutory maximum. Executors should:

• notify the provider promptly of the death and of the executor's role;
• request a written RAD statement and account reconciliation to date of death;
• ask the provider in writing what they require to process the refund and diarise their stated timeframe;
• confirm the provider has the correct estate bank account for the refund; and
• chase the refund in writing if it is not received within the stated timeframe.

Records matter. Estate accounting and beneficiary transparency both depend on being able to show what was paid, when, and how it was reconciled.

Estate accounts and beneficiary communication

The RAD refund typically features in the estate accounts as a receipt into the estate bank account, with the reconciled deductions shown against it. Executors have a duty to keep beneficiaries reasonably informed. Where the RAD is a significant portion of the estate, providing beneficiaries with a clear summary of the provider statement, the reconciliation and the net amount received tends to avoid later suspicion or dispute. Where an accountant is preparing estate accounts or an estate income tax return, provide them with the same documents. On the tax side generally, see our guide to estate tax for executors.

What if there is a dispute?

Disputes commonly arise where one adult child managed the aged-care arrangements and others did not, or where aged-care fees were paid out of a joint account, out of a specific gift or out of proceeds from the sale of the family home. The right response is usually:

• gather and share the underlying documents (Accommodation Agreement, residential aged care service agreement, RAD statements, bank records);
• reconcile any DAP drawdowns, means-tested contributions and extras against the RAD;
• correspond with beneficiaries under the executor's duty to keep them reasonably informed; and
• obtain legal advice where the dispute concerns whether specific transactions during the resident's lifetime should be set aside or accounted for.

Where the resident lived in a retirement village before moving into aged care, or died between the two, our article on what happens when a retirement village resident dies covers the village side of the reconciliation.

When to seek legal advice

Seek legal advice where the RAD balance is significant, where the provider is delaying or disputing the refund, where the reconciliation involves DAP drawdowns or unusual deductions, where the estate is being administered without probate and the provider is requiring one, or where beneficiaries are raising concerns about the aged-care arrangements or the handling of estate funds. Early advice usually shortens the process and reduces the risk of executor liability.

How we help

Our probate and deceased estates team and retirement living and aged care team work together on RAD refunds and related estate-administration issues — from initial provider correspondence and probate applications through to estate accounting, beneficiary communication and, where necessary, disputes. We coordinate with the estate's accountant on tax and financial questions.

Frequently Asked Questions