When a family is making the emotionally difficult decision to move a loved one into residential care, financial conversations can quickly become overwhelming. For providers, being able to clearly explain RAD/DAP payments and broader accommodation payments in residential aged care is essential for transparency, compliance, trust-building, and quality service delivery.
This guide is designed to help aged care teams confidently explain RAD and DAP options to families while also maintaining clarity, empathy, and alignment with compliance standards.
What are RAD and DAP? A quick refresher for providers
Residential aged care accommodation can be paid for in several ways, with the two most common options being:
- RAD (Refundable Accommodation Deposit): A lump sum payment made by the resident to cover their accommodation. It’s government-guaranteed and fully refundable upon exit (minus any agreed deductions).
- DAP (Daily Accommodation Payment): A rental-style daily payment based on the interest that would have been earned on the RAD amount. It’s non-refundable and calculated using the MPIR (Maximum Permissible Interest Rate).
Families can choose to pay by RAD, DAP, or a combination of both, depending on their financial circumstances.
Why these payments matter for providers
Understanding how to structure and communicate RAD/DAP payments is vital for providers. Beyond revenue flow, these payments are tied to:
- Meeting regulatory obligations
- Providing accurate Aged Care accommodation pricing information
- Ensuring families can make informed decisions
- Demonstrating key best practices to maintain ongoing compliance
Miscommunication around fees can damage trust and lead to complaints or worse, breaches in compliance.
Explaining RAD and DAP to families: step-by-step tips
Here are practical tips your aged care team can use when discussing Accommodation Payments in Residential Aged Care with new or prospective residents and their families.
1. Start with simplicity
Use plain language and avoid aged care jargon. For example:
“There are two main ways to pay for the room: one is a lump sum that’s refundable, and the other is a smaller daily fee, more like rent. Some people choose a mix of both.”
Families appreciate clarity over complexity, especially in high-stress decision-making.
2. Use visual aids
Provide simple charts or brochures that outline Aged Care accommodation pricing using real-world examples. For instance:
This helps families see how the options play out financially.
3. Clarify what is and isn’t included
Make sure families understand that RAD and DAP only cover accommodation, not daily care. Encourage them to explore other components such as:
- Basic daily fees
- Means-tested care fees
- Additional services
Also explain how to calculate means-tested care fees, which are based on income and assets and assessed by Services Australia. This reinforces your team’s knowledge and builds trust.
4. Explain the Government’s role
Remind families that providers are required to publish accommodation prices and that RAD payments are government-guaranteed. This can be reassuring, especially for financially cautious families.
You might say:
“We’re required to follow strict guidelines set by the government. Your loved one’s RAD is protected by law and refunded in full when they leave the facility.”
5. Always offer all payment options
Legally and ethically, providers must offer all payment methods, even if they prefer one. Avoid steering families toward RAD or DAP unless it’s based on their needs and eligibility. The choice must remain with the resident.
6. Train your frontline teams
It’s not just the finance or admissions team who should understand RAD/DAP payments, your frontline staff, from reception to care coordinators, should have enough knowledge to answer basic questions or direct families to the right person.
A short training session or resource based on Resident and Accommodation Payment Fundamentals (RESI101) can support this.
Maintaining compliance while supporting families
Explaining fees is a customer service function and a compliance issue.
To meet your obligations under the Aged Care Quality Standards, providers must ensure that:
- Families are given transparent information about costs and choices
- All discussions are recorded and documented
- Staff understand and follow key best practices to maintain ongoing compliance
- Training your staff in financial literacy and aged care funding is an investment that protects your organisation while empowering your team.
Empathy is your edge
While the numbers matter, don’t underestimate the emotional context of these conversations. Many families are navigating guilt, stress, and confusion. Providers who communicate with care and patience stand out in the sector and are more likely to receive referrals.
You can support your team with a short script or roleplay training. For example:
“I understand this might feel like a lot. We’re here to walk through it together, and we can explore the best option for your situation.”
Training your team: where RESI101 comes in
The reality is, many providers struggle to keep up with changing regulations and fee structures. Our course, RESI101, is designed specifically to build your team’s confidence in navigating RAD/DAP payments, explaining Aged Care accommodation pricing, and helping families calculate means-tested care fees, all while ensuring your organisation remains compliant.
RESI101 offers practical tools, case studies, and updated knowledge that applies directly to your operations.
Final thoughts: build trust through transparency
Helping families understand payment options like RAD and DAP is a financial responsibility and an opportunity to build trust, stand out from competitors, and deliver care that’s both human and compliant.
By investing in training and strengthening communication around Accommodation Payments in Residential Aged Care, providers can offer better service, avoid costly errors, and maintain their reputation in a highly regulated sector.
Looking to strengthen your team’s skills in residential care finance?
Explore RESI101, the go-to course for aged care professionals who want to manage RAD/DAP payments with confidence.
