How do I manage Refundable Accommodation Deposits, Permitted Uses and financial disclosure without breaching the prudential standards?

• Providers holding RADs must keep the funds in accordance with the Aged Care Act 2024 prudential framework and the Aged Care Rules 2025.
• RAD funds can only be used for Permitted Uses prescribed by the legislation. Using RAD funds outside the Permitted Uses is a serious breach that can attract significant civil penalties and reputational consequences.
• Providers must maintain sufficient liquidity to meet RAD refund obligations as they fall due. When a resident leaves the service, the RAD must be refunded within the statutory refund period.
• The prudential framework sits under the Aged Care Act 2024 Chapter 4 and the Aged Care Rules 2025, and is organised around four prudential standards: the Liquidity Standard (sufficient liquid assets to meet refund obligations), the Records Standard (maintain records of RAD balances and movements), the Governance Standard (governing body responsibility for prudential compliance), and the Disclosure Standard (disclose financial information to residents). Providers submit the Quarterly Financial Report (QFR) and the Annual Prudential Compliance Statement (APCS) — both frameworks continue under the Aged Care Act 2024.
• Providers must disclose certain financial information to residents and prospective residents so they can make informed decisions about accommodation payment options.
• The prudential framework applies to residential aged care providers only — home care providers do not hold RADs and are not subject to these obligations.

Reference: Aged Care Act 2024 Chapter 4 (prudential framework and accommodation payments); Aged Care Rules 2025 Chapter 4; Department of Health prudential standards guidance; Quarterly Financial Report and Annual Prudential Compliance Statement frameworks (current version).

• Using RAD funds outside the Permitted Uses. This often happens inadvertently — capital works treated as maintenance, operational expenses treated as refurbishment, or transfers between related entities without a clear Permitted Use rationale.
• Not maintaining sufficient liquidity to meet refund obligations. Providers drift into a position where RAD outflows would exceed liquid assets under moderate stress — and don't know it until a cluster of residents leaves.
• Late prudential reports. The reports are complex, the data comes from multiple systems, and the submission is due at an awkward time — so it slips.
• Not maintaining an auditable link between RAD inflows/outflows, Permitted Use decisions, and the general ledger. When a regulator asks 'show me how this RAD was used', the provider can't produce a clean trail.
• Treating prudential as a finance-team problem isolated from operations. Prudential obligations are a governance responsibility, and the governing body needs visibility on liquidity, RAD holdings, and any Permitted Use decisions — not just the CFO.
• Not disclosing pricing and accommodation payment options transparently to incoming residents. The disclosure obligation is specific; a standard fee schedule isn't enough.

• RAD register per resident — deposit amount, date received, payment type (RAD/DAP/combination), status, and the contract it's associated with. Every movement is recorded.
• Permitted Use classification for every application of RAD funds. Operators cannot apply RAD funds without selecting a Permitted Use from the prescribed list, with supporting documentation and a workflow sign-off for decisions above a threshold.
• Liquidity monitoring — current liquid assets vs projected refund demand, with stress-test scenarios and alerts when headroom falls below a configurable threshold.
• Quarterly Financial Report and Annual Prudential Compliance Statement generation pre-populated from the underlying ledger and RAD register. Operators review and sign off rather than building the report from scratch.
• RAD refund workflow — when a resident leaves, the statutory refund period is tracked, the refund is scheduled, and the audit trail shows the refund completed within the deadline.
• Pricing disclosure workflow — current published prices, RAD/DAP alternatives, and the disclosure record sent to each incoming resident.
• Governing body dashboard — RAD holdings, liquidity position, Permitted Use summary, and any open prudential items visible to the board at every meeting.

When an assessor asks for evidence on this obligation, here's what the platform produces on request — date-stamped, user-attributed, and exportable:

• RAD ledger per resident — every deposit, refund, and adjustment with date, amount, payment type, and the authorising contract.
• Permitted Use log — every application of RAD funds with the Permitted Use classification, supporting documentation, approver, and date.
• Liquidity position snapshots — daily or weekly records of liquid assets vs projected refund obligations, with stress-test results.
• Refund workflow records — when a resident left, the refund due date per the statutory period, and the actual refund date.
• Quarterly Financial Report and Annual Prudential Compliance Statement versions with the submission date and Department acknowledgement.
• Pricing disclosure records per incoming resident showing what was disclosed, when, and in what form.
• Board-level prudential reports with the governing body review dates and any decisions taken.