From 1 January 2025, aged care providers were able to charge Refundable Accommodation Deposits (RADs) of up to $750,000 without gaining approval from the Independent Health and Aged Care Pricing Authority (IHACPA), an almost 50% increase on the former $550,000 maximum limit.
It hasn't taken providers long to adjust, taking advantage of the higher deposits.
According to Tyler Fisher, Data Scientist and Senior Manager with aged care advisory firm Mirus Group, who tracks the data, in just over four months, the average RAD has increased 7% from $526,859 in December 2024, to $563,560 this month.
- 356 homes - or 14% of the sector - have increased their highest room price up to the new $750,000 ceiling
- 723 homes - 28% of sector - have increased their highest room price
- 650 homes - 25% of sector - have increased their lowest price
"Increasing demand, i.e. occupancy, is allowing providers to appropriately value their non-care services," Tyler told The Weekly SOURCE.
"Providers are balancing their budgets and analysing their market segments to create more effective go-to-market strategies and pricing structures.
"Understanding the quality of services and competitive advantage is helping providers identify their target consumer and product position."
IHACPA told The SOURCE that since 1 January 2025 until this week they have received applications from 34 aged care homes to charge RADs higher than $750,000 and all have been approved, affecting prices for 100s of beds.
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