There is some welcome news for people entering residential aged care, along with their families and financial advisers.
A legislative amendment has now passed through Parliament and received Royal Assent, restoring flexibility around when residents can pay a Refundable Accommodation Deposit (RAD) or Refundable Accommodation Contribution (RAC).
The change addresses an issue introduced under the aged care reforms on 1 November 2025, which required residents to wait until Services Australia completed their means-test assessment or issued a means-not-disclosed determination before they could pay a RAD or RAC.
For many residents, this created an unnecessary financial burden. While waiting for their assessment to be finalised, they were required to pay a Daily Accommodation Payment (DAP) or Daily Accommodation Contribution (DAC) instead. In some cases, these delays continued for several months.
What has changed?
The restriction has now been removed, effective from 1 November 2026.
Residents can once again choose to pay all or part of their RAD or RAC from the time they enter permanent residential aged care, without having to wait for Services Australia to finalise their means assessment.
The change also applies to existing residents, regardless of when they originally entered aged care.
This provides greater flexibility for residents and their families when deciding how to manage accommodation costs.
You can read the Aged Care Legislation Amendment Act 2026 on the Federal Register of Legislation for details of the legislative changes. The Australian Government also outlined the reforms in its October 2026 aged care announcement.
Why does this matter?
This is a sensible and welcome change that puts more control back into the hands of residents and their families.
Rather than having their accommodation payment options dictated by administrative delays, residents can make decisions based on their individual financial circumstances and preferences.
It also allows financial advisers to help clients consider and implement an accommodation payment strategy that better suits their needs.
For anyone entering aged care, understanding the available payment options and their financial implications remains an important part of planning ahead.
Need assistance with aged care planning?
Choosing how to pay for residential aged care can have a significant impact on your financial position and retirement savings.
If you or a family member are considering entering aged care, our team can help you understand the available options and explore a strategy suited to your circumstances.
Contact our office to arrange an appointment and discuss your aged care financial planning needs.
This article has been prepared for general information purposes only and does not constitute personal financial, taxation, accounting or legal advice.
The information is based on our understanding of the relevant legislation at the time of publication. While every effort has been made to ensure accuracy, legislation, regulations and government guidance may change.
The information does not take into account your individual objectives, financial situation or needs. You should consider whether the information is appropriate for your circumstances and seek professional advice before making any financial or aged care decisions.
Holzworth Partners accepts no responsibility for any loss or damage arising from reliance on this information without obtaining appropriate professional advice.
