Refundable Accommodation Deposit (RAD)

The daily fee is comprised of 3 possible components. They are: Basic Daily Care Fee ‚calculated by the Government on the basis of your income‚ an Extra Service fee ‚for the additional services provided and a Means Tested Fee ‚ for part-pensioners and non-pensioners.

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This fee is paid by all residents entering into an aged care facility and the amount is determined by the Dept of Social Services. (DoSS).

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This fee is paid by those who have chosen to avail themselves of the extra services that Blue Hills provides to residents. This fee is approved by the DoSS and will vary depending on the services provided.

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The amount that consumers contribute towards the cost of residential aged care will depend on a care recipient’s individual circumstances.

From 1 July 2014, the Government will combine the current income and assets test to ensure a consistent fees policy for anyone entering residential care after this date. 

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The Commonwealth Government Means Tests all residents permanently entering any residential aged care facility.  This fee is determined by Centrelink and is based on a calculation of non-pension income and is capped by Commonwealth government regulations.

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The family home is currently exempt from the aged care assets test if occupied by a spouse or other protected person. This will continue under the new means testing arrangements.

Where the resident’s former home is included as an assessable asset, its value for the purposes of the test will be capped at $144,500 (March 2012 prices).

The family home will continue to be exempt from the Aged Care assets tests if occupied by a spouse or a protected person.

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Yes, there is a detailed Resident Agreement that outlines your rights and entitlements and all conditions of residency.

If you are interested in accommodation at The Manor at Blue Hills or if you have any other questions, the Admissions Coordinator or Administration Officer would be delighted to assist you.

Please give them a call on: 02 4634 8000

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Residents can choose to draw down daily payments from their refundable deposit.

However this may lead to an increase in the daily payment amount in order to compensate Blue Hills  for the lower earnings caused by a decreasing refundable deposit balance.

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Most aspects of the operation of Refundable Accommodation Deposits are closely regulated by the Commonwealth Department of Health and Ageing. Blue Hills' extra service facilities have determined the RAD amount as per the table below. The amount of the RAD relates to the type accommodation available at Blue Hills e.g. single or double rooms.

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Yes, there are advantages in paying a RAD. Amounts placed in accommodation bonds are not deemed to be an asset and therefore provide significant taxation and pension benefits. It may be helpful to contact a financial advisor before making a decision.

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The Government has legislated that the maximum amount of a refundable deposit a resident can pay must leave the resident with at least the minimum permissible asset level.

This is calculated as 2.25 times the basic age pension amount at time of entry. The amount is determined quarterly. 

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The Manor at Blue Hills will hold the bond in a secure and accessible form which meets the Commonwealth Government Department prudential arrangements. We deduct a small amount each month for the administration of your bond.

The RAD is refunded on discharge, less retention fees charged under your Resident Agreement.

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If you need to transfer to another facility, the balance of your RAD will be transferred to the other facility as per the requirements of the Aged Care Act.

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To calculate the equivalent daily payment of a refundable deposit, the refundable deposit is multiplied by the maximum permissible interest rate (MPIR), currently 6.59% as at 28 January 2014, and divided by 365 days. 

For example, a refundable deposit of $400,000 would have an equivalent daily payment of $72.21 per day. 


(Refundable deposit x MPIR)/365 = ($400,000 x 6.59%)/365 = $72.21 per day

An example of a combination payment for a $400,000 price may be a combination of a refundable deposit of $300,000 and a daily payment of $18.05 per day, with the daily payment determined as follows.

(Balance of price x MPIR)/365 = [($400,000 - $300,000) x 6.59%]/365 = $18.05 per day

How will we know the maximum permissible interest rate (MPIR)?

The MPIR will be available on the Department of Social Services website and will be updated every three months. We will ensure that any changes in the MPIR is reflected in our published prices. 

The MPIR at the date of publishing this fact sheet is 6.59% (January to March 2014) and will be adjusted each quarter as the Government publishes the new MPIR.

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