Moving into aged care & your 28-day decision

Moving into residential aged care is a big step, and one of the most important financial decisions you’ll need to make is how to pay for your room. The legislative rules provide clear guidelines on your payment options and the timeframe in which you must decide.

With so much happening when you make the move, it’s easy to feel overwhelmed or rushed. That’s why it’s important to understand the 28-day rule.

What is the 28-day rule?

Once you move into residential aged care, you have 28 days (from date of permanent entry) to decide how you want to pay for your room. This cost is separate from your daily care fees and can be covered in one of three ways:

1. Refundable Accommodation Deposit (RAD) – a lump sum payment that is refunded when you leave or pass away (minus any allowed deductions).

2. Daily Accommodation Payment (DAP) – an ongoing daily fee based on the government-set interest rate.

3. Combination of RAD and DAP – a mix of both options, offering flexibility based on your financial situation.

The 28-day decision period gives you time to explore your options and seek advice to ensure you make the best financial decision. Aged care providers should not require you to make this choice before you move in.

If you are unsure or need more time, you can let the care provider know that you choose to pay the daily accommodation payment (DAP).

This allows you to move in without committing to a lump sum upfront. You can still switch to paying a lump sum RAD at any time if it becomes the better option for you.

No matter which option you choose, unless the full lump sum RAD is paid, you will need to cover the remaining balance as a daily accommodation payment.

Changes from 1 November 2025

From 1 November 2025, new contribution rules will apply for people moving into residential care. You will still have the same three payment options, but you won’t have to decide within 28 days.

Instead, the default payment method will be the daily accommodation payment, and you can decide later whether to pay a lump sum RAD when it suits you.

These changes aim to reduce financial pressure on families by allowing more time to make the right decisions.

Making the right choice

Deciding how to pay for your aged care room is a significant financial decision. It’s important to consider your savings, assets, and long-term financial needs before making a choice.

Speaking to a financial adviser accredited in aged care advice can help you understand your options and choose the best approach for your situation.

If you or a loved one is moving into aged care, start planning as early as possible. The right advice can help you feel confident in your decision and ensure the best financial outcome for your future.

Call Bill today on 1300 924 644 to arrange a time to discuss your situation.

Bill Savellis

Senior Financial Adviser

Having navigated the Aged Care landscape for both of his parents, Bill understands how challenging it can be to make the right decisions for your future care needs. That's why he believes that everyone should have access to financial advice during this time. Bill has been a Financial Adviser for over 22 years, and is passionate about helping others access the financial advice they need. Drawing from his own experience in the financial sector, Bill develops strategic, personalised plans to support transitions to Aged Care or Home Care.

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Disclaimer: Prepared without taking into account your objectives, financial situation or needs. Before acting on any information in this article, Olive Grove Financial Advice recommends that you consider whether it is appropriate for your circumstances. Information in this article was correct and current as of 29 September 2025. Olive Grove Financial Advice is operated by Bill Savellis through The Financial Advisor (Australia) Pty Ltd ABN 72 619 546 431, who is a Corporate Authorised Representative (No. 1278394) of Havana Financial Services Pty Ltd.