In short

When a residential aged care resident dies, their RAD is refundable to the estate — not from the day of death but within 14 days of the provider sighting probate. Interest accrues at the BIR rate until the 14-day window closes, then at MPIR (currently 7.96%) until paid. Post-death fees may be deducted from the refund.

For most Australian families with a parent or partner in residential aged care, the Refundable Accommodation Deposit — or RAD — is the largest single financial transaction in the entire aged care arrangement. A typical RAD ranges from several hundred thousand dollars to over a million, paid to the provider on entry as the means of funding the resident's accommodation. The RAD is refundable in full when the resident's place ends — through transfer, discharge, or death. For most families, the ending is death, and the refund process becomes part of the broader work of estate administration.

Which residents does the RAD refund framework apply to?

The RAD framework applies to residents who entered residential aged care before 1 July 2025. The 2024-25 aged care reform programme (Aged Care Act 2024) introduced changes to how new residential care entrants fund their accommodation. For residents who entered before 1 July 2025 — the large majority of current long-stay residents — the RAD framework and the refund process described here continues to apply.

Importantly, the statutory refund-on-death framework continues post-reform — it is set out in Chapter 4, Part 4, Division 7, sections 311 and 313 of the Aged Care Act 2024 with additional detail in the Aged Care Rules 2025 (Department of Health, Disability and Ageing, https://www.health.gov.au/our-work/residential-aged-care/managing/refunds).

When does the RAD refund clock start — probate or death?

The triggering point for the 14-day refund clock is not the date of death. It is the date the provider sights either:

  • A grant of probate (where there is a will), or
  • Letters of administration (where there isn't), or
  • Other satisfactory evidence of executor authority

Some providers will accept other evidence — a properly executed will combined with the death certificate, for instance — but most wait for probate before processing a refund of any size. The RAD refund timing is, in most cases, dominated by how long it takes to obtain probate rather than by the provider's own processing speed. Probate processing varies by state and complexity but typically runs from a few weeks to a few months for uncomplicated estates.

Once the documentation is in the provider's hands, the Aged Care Act 2024 prescribes a 14-day refund window. The provider must process the refund and pay it to the estate's nominated bank account within that window.

What interest applies when an aged care RAD refund is delayed?

Interest is payable on the RAD from the day after death until the refund is actually paid. Two rates apply (Department of Health, Disability and Ageing; aged care quality commission guide):

  • From the day after death until the end of the 14-day refund period: the Base Interest Rate (BIR) — published quarterly by the Department of Health, Disability and Ageing alongside the MPIR.
  • From the day after the 14-day period until the refund is paid: the Maximum Permissible Interest Rate (MPIR) — currently 7.96% per annum (effective 1 April 2026 to 30 June 2026; updated quarterly).

The MPIR is meaningfully higher than typical short-term deposit rates, so on a delayed refund the interest can be substantial. For executors dealing with an unresponsive provider, the statutory interest provision is a useful leverage point — the provider's own cost of delaying climbs every day past the 14-day window.

What happens if the aged care provider can't refund the RAD?

If the provider fails to refund — typically because of insolvency rather than wilful delay — the Accommodation Payment Guarantee Scheme kicks in. The Australian Government guarantees the refund (including any interest owing) where a Commonwealth-approved aged care facility cannot pay (My Aged Care, https://www.myagedcare.gov.au/aged-care-home-accommodation-refunds; see also the related aged-care-rad-dap-decision article for the full Scheme background). Since 2006 the Scheme has been activated three times, refunding ~$19m from the Commonwealth.

What fees are deducted from the RAD before it is refunded?

A practical detail that surprises many executors: in the period between the date of death and the date the room is actually vacated, the provider may continue to charge the basic daily fee, accommodation contribution (if any), and any agreed extra services fees. These charges are deducted from the RAD before the net amount is refunded. For a resident on a substantial RAD with significant daily fees, this can amount to several thousand dollars off the refund.

The post-death fee period is intended to give the family reasonable time to vacate the room and remove personal possessions. It is not a charge that can be negotiated away, but it is limited to a defined window (the provider's contracted period; under the established framework typically capped at 14 days). Practical work during this period: arranging removal of personal effects, dealing with outstanding documentation, coordinating with the funeral director where relevant.

What happens to a RAD when one partner in aged care dies?

Where both partners are residents in aged care, the death of one partner does not automatically transfer the deceased's RAD to the surviving partner. The RAD is refundable to the deceased's estate; eventual flow to the surviving partner depends on the will and the broader estate process. For couples in this position, pre-death planning to coordinate the RAD structure with the will can ensure a smoother transition. Without that planning, the surviving partner may face a period during which their own ongoing accommodation costs continue to accrue while the deceased partner's RAD is still working through probate.

Case study: the typical executor's RAD refund sequence

Consider Ann, daughter and executor of her father Frank's estate. Frank entered residential aged care in 2019 with a $560,000 RAD. He passes away on 1 March 2026.

  • Day 1 (1 March): Ann notifies the provider of Frank's death. The post-death fee clock starts; the BIR interest clock on the RAD also starts.
  • Days 2-14 (March): Ann clears Frank's room within the 14-day post-death window. The basic daily fee + accommodation contribution accrues for those 14 days — say $66.80 + small contribution × 14 days ≈ ~$1,000 deducted later from the refund.
  • Weeks 1-8: Ann's solicitor lodges the probate application (her state has online probate; routine estate processes within ~6 weeks).
  • Day ~50 (mid-April): probate granted. Ann presents the grant + estate bank account details to the provider on the same day.
  • Day ~64 (end of April): provider refunds the RAD net of post-death fees and any retention amount, plus BIR-rate interest on the period from death until end of 14-day window. Total refund: ~$559,000 + interest. Funds flow to estate account.

If the provider had delayed past the 14 days from probate-sighting (i.e. past day 64), MPIR-rate interest at 7.96% would accrue on the unpaid balance until refund. On $560,000 over 30 days of delay, that's roughly $3,665 in additional interest the provider would owe.

Case study: surviving partner planning when both are in aged care

Consider Robert and Susan, both 84, both in residential aged care since 2020. They each have a $480,000 RAD. Robert passes away. Susan continues in care.

Robert's $480,000 RAD is refundable to Robert's estate, not directly to Susan. The will determines what happens next. If Robert's will leaves his estate (or the relevant portion) to Susan, the RAD refund eventually flows to her — but only after probate and the 14-day refund window. In the interim, Susan's own ongoing fees continue to be charged on her own RAD/account.

The planning point: pre-death, Robert and Susan should consider whether to structure their accommodation payments so that if one passes first, the survivor isn't liquidity-stressed waiting for the deceased's RAD to flow back. Options include holding some funds outside the RAD (in cash for either's living expenses), nominating each other as executor with prepared paperwork to expedite probate, or coordinating with their financial adviser on a contingency-cash buffer for the survivor.

What is the practical step-by-step sequence for executors?

  1. Notify the provider promptly of the death — starts the post-death and interest clocks.
  2. Work towards probate as quickly as practicable — usually the bottleneck.
  3. Provide probate + estate bank account details to the provider in a single combined communication.
  4. Monitor the 14-day refund window — if the refund is delayed beyond 14 days from probate-sighting, MPIR-rate interest applies; remind the provider of the statutory obligation in writing.
  5. Reconcile the deductions when the refund arrives — net of post-death fees and any retention amount. Discrepancies can be raised with the provider directly or, if not resolved, with the Aged Care Quality and Safety Commission.

For pre-retirees and families currently supporting an aged care transition, knowing the RAD refund framework in advance is useful planning context. The amounts involved are large, the timing matters for estate cash flow, and the rules are not common knowledge.

Sources

Key takeaways

  • The RAD refund is payable to the estate, not triggered by the date of death — the 14-day clock starts when the provider sights the grant of probate or letters of administration.
  • Interest accrues from the day after death: at the Base Interest Rate (BIR) until the 14-day window closes, then at the higher MPIR rate (currently 7.96% p.a.) until the refund is paid — so providers face increasing cost for every day of delay.
  • Post-death fees (basic daily fee and other contracted charges) continue accruing until the room is vacated and are deducted from the RAD before it is refunded to the estate.
  • Where both partners are in aged care and one dies, the deceased's RAD refunds to the deceased's estate — not directly to the surviving partner — so pre-death planning to coordinate RAD structure with the will avoids a liquidity gap for the survivor.
  • The Accommodation Payment Guarantee Scheme protects RAD refunds if the provider becomes insolvent — the Commonwealth guarantees repayment including any interest owing.

Frequently asked questions

When does the aged care RAD refund clock start after death?

The 14-day refund window does not start at death — it starts when the provider sights the grant of probate (where there is a will) or letters of administration (where there isn't). This means the practical bottleneck for most refunds is the time it takes to obtain probate, not the provider's processing speed.

What interest is payable if an aged care provider delays refunding a RAD?

Interest accrues from the day after the resident's death. From death until the end of the 14-day refund window, interest runs at the Base Interest Rate (BIR), published quarterly. After the 14-day window, the higher Maximum Permissible Interest Rate (MPIR) applies — currently 7.96% per annum (effective 1 April 2026 to 30 June 2026). On a $500,000 RAD delayed 30 days past the 14-day window, this amounts to roughly $3,270 in additional interest the provider owes.

What fees can be deducted from a RAD refund after death?

In the period between the date of death and the date the room is actually vacated, the provider may continue to charge the basic daily fee, any accommodation contribution, and agreed extra services fees. These are deducted from the RAD before the net refund is paid to the estate.

What happens to a deceased partner's RAD when both spouses are in aged care?

The deceased partner's RAD is refundable to the deceased's estate, not directly to the surviving partner. The estate process — will, probate, and the 14-day refund window — must run before the funds flow back, while the surviving partner's own aged care fees continue. Pre-death planning to coordinate the RAD structure with the will, and holding some funds outside the RAD as a liquidity buffer for the survivor, can prevent a cash-flow gap.

A note on advice. This article is general information only and doesn't account for your personal circumstances. Everyone's situation is different — before acting, it's worth talking it through with a licensed adviser who knows your full picture.