Using the family home to help pay for aged care.

The squeeze

After a hospital call, someone may put a room price in front of you that looks like a wall of cash. Your parent may own a home. They may not have a large income. That is the squeeze this guide is for: house yes, cash tight.

The room can be paid as a Refundable Accommodation Deposit (RAD), a Daily Accommodation Payment (DAP), or a combination of both. You are never required to pay a RAD. An advertised RAD is a maximum for that room, not a demand. A home cannot legally insist on a lump sum.

Families sometimes sell, or take out a loan, because someone said a full RAD is compulsory. It is not. The deposit, the daily amount, and a mix are choices. Read that twice before anyone books a real estate agent.

Options at a glance

These are ways families have funded a place. They are not ranked. They do not pick a winner for Margaret, David, or Helen. Your parent's numbers, and who still lives in the house, change the picture.

The family home guide explains exemption rules in more depth. The RAD guide explains the deposit itself. This page sits between those two: how people have turned a house, or other cash, into a way to pay for a room.

Pathway comparison

Use this as a map, not a scoreboard. Every row is a path families have used. None of them is “the right one.”

Selling the home

Some families sell so there is cash for a deposit, a mix, or living costs. A sale can take months. Cash from the sale usually arrives at settlement, not on the day you list.

Once the home sells, you have liquidity. You also lose the home. The proceeds become cash or investments, and that can change the aged care means assessment. Social security timing for sale proceeds generally starts at settlement. That is a social security fact. Do not assume the aged care test uses the same clock, or the same treatment.

Renting the home

Some families rent the home and put the rent toward a daily accommodation payment. That can keep ownership. It can also create income. Income is the part families miss.

Rent may count in the aged care income assessment. Social security has its own rented-home exemption rules. Those rules are conditional. They do not automatically wipe the aged care treatment. A rented home that looks “exempt” for one test can still be visible on the other.

You also keep the ordinary costs of a landlord: rates, insurance, maintenance, and often an agent. The renting the family home guide goes deeper on the aged care side of that choice.

Leaving the home vacant

Leaving the home empty keeps your options open. It does not create cash. The bills do not stop. Rates, insurance, and maintenance still arrive.

For social security, a vacant former principal home often sits under a two-year ordinary rule. That is a social security rule. Confirm the aged care position as well. Do not treat a two-year window you heard about at the hospital as a single clock for every form.

Some families leave the home vacant for a season so they can decide without a tenant or a sale. That can be a pause. It is not a funding method. If the daily amount still has to be paid, the cash has to come from somewhere else.

Reverse mortgage or equity release

A reverse mortgage or other equity release can raise cash while an eligible owner is still at home, and while the home stays in their name. Interest compounds. The debt can grow while your parent is in care.

Repayment is often triggered when the owner moves into care, when the home is sold, or when they die. That timing matters if a partner or another person still needs the house. ASIC MoneySmart explains how these products can affect living costs, the Age Pension, and who can stay.

The government Home Equity Access Scheme is a different instrument. It is a voluntary loan against Australian real estate, run by Services Australia. It is usually more like an income top-up than a full room deposit. Check the live rules on Services Australia. This page does not recommend either product.

Accommodation or RAD loan

Some lenders offer a loan secured against the home, paid to the aged care home as a deposit, and repaid later, often when the house sells. Interest is charged. This is a private product.

Hold two ideas apart. The RAD is a deposit sitting with the aged care home. The accommodation loan is a separate debt owed to a lender. Paying a RAD with borrowed money does not make the debt disappear. You can still owe the lender after the deposit is in place.

Some families have used a loan like this to bridge a sale. That is a way people have done it. It is not a recommendation, and it is not a reason to treat a full RAD as compulsory. You can still choose a daily amount, or a mix, without borrowing.

Super or family help

Some families bridge the cash gap with a super withdrawal, savings, or help from adult children. Super timing and tax treatment need a qualified adviser. Do not treat a balance on a statement as money you can move tomorrow.

If family pays a RAD, document whether that money is a gift or a loan. A handshake is not enough. A family-paid RAD is still counted as the resident's asset for aged care purposes. The name on the transfer does not take it off the assessment.

The super and aged care fees guide explains how super is treated once it is assessed. This page only makes the cash-flow point: super and family can bridge a gap. They can also create a mess if the paperwork is vague.

Part RAD and part DAP

You do not have to choose all deposit or all daily amount. A mix is common. Part of this room's advertised maximum is paid as a deposit. The daily amount applies only to the unpaid remainder.

A mix can preserve cash. It does not, by itself, answer the house question. The cash for the RAD portion still has to come from somewhere: savings, super, family, a sale, or a loan.

For people who entered care on or after 1 November 2025, a retention amount may apply to the RAD portion. Pre-November 2025 RADs are a different group. See the RAD guide and the 2025 Act changes guide for how retention works. If you only want the conversion arithmetic for this room, use the RAD versus DAP calculator. That tool does not choose a path, and it does not model a home sale.

Partner or protected person

If a partner, or another protected person, still lives in the principal home, that home may stay out of the aged care assets test. Confirm the exact situation. “Someone is still there” is not enough. Who they are, and how long they have lived there, can change the answer.

This is often the fact that changes the whole conversation. Helen's husband remaining in the house is a different picture from Helen living alone. Selling or renting in that setting can affect the person who is still at home, not only the person in care.

The couples guide and the family home guide cover the exemption in more detail. Use those pages, then confirm with Services Australia. Do not take a hospital corridor summary as the final word.

The 28-day date

You may see a 28-day date in an agreement, a brochure, or a conversation about paying a RAD. Treat that date carefully.

The official material reviewed for this guide does not set a universal statutory deadline of 28 days to pay a RAD. A separate 28-day rule is about reporting a change of circumstances. Those are different clocks.

If a date is written into your parent's agreement, ask what that date means. Ask whether it is an agreement term, a reporting duty, or something else. Ask what happens if settlement has not come through by then. Write the answer down. Do not let a round number push you into a sale or a loan.

A practical sequence

You do not have to do everything this week. This is an order that keeps families out of a rushed sale.

1. Write down the room choice, not a demand. RAD, DAP, or a mix are choices. The advertised figure is a maximum. You are never required to pay a RAD.
2. Ask what any 28-day date means. Agreement term, reporting duty, or something else. Do not treat it as a universal statutory RAD deadline.
3. Confirm who still lives in the home. A partner or protected person may keep the home out of the aged care assets test. Confirm the exact situation.
4. Get the Services Australia fee advice letter after the means assessment, before you sign or list.
5. Map the house paths without ranking them. Sell, rent, leave vacant, equity release, accommodation loan, super or family, part RAD and part DAP. Note what each one does to ownership, cash, and the two means tests.
6. Do not sell, rent, borrow, gift, or draw super until an accredited aged care financial adviser or other licensed adviser has looked at your parent's actual numbers.

See an adviser

The home, the pension, and the fees move together. A calculator can convert this room's advertised maximum into a daily amount. It cannot tell you whether to sell, rent, wait, or borrow.

Aged Care Circle is not your adviser. Start with the on-site list of aged care financial advisers. Talk to an accredited aged care financial adviser, or another licensed adviser, before you sell, rent, borrow, gift, draw super, or commit to a RAD or DAP.