The following is an excerpt from
The MacArthur New Testament Commentary on Luke 16.
16:22 Abraham’s bosom. This same expression (found only here in Scripture) was used in the Talmud as a figure for heaven. The idea was that Lazarus was given a place of high honor, reclining next to Abraham at the heavenly banquet.
16:23 in Hades. The suggestion that a rich man would be excluded from heaven would have scandalized the Pharisees (see note on Matt. 19:24); especially galling was the idea that a beggar who ate scraps from his table was granted the place of honor next to Abraham. “Hades” was the Gr. term for the abode of the dead. In the LXX, it was used to translate the Heb. Sheol, which referred to the realm of the dead in general, without necessarily distinguishing between righteous or unrighteous souls. However, in NT usage, “Hades” always refers to the place of the wicked prior to final judgment in hell. The imagery Jesus used fit the erroneous common rabbinical idea that Sheol had two parts, one for the souls of the righteous and the other for the souls of the wicked—separated by an impassable gulf. But there is no reason to suppose, as some do, that “Abraham’s bosom” spoke of a temporary prison for the souls of OT saints, who were brought to heaven only after He had actually atoned for their sins. Scripture consistently teaches that the spirits of the righteous dead go immediately into the presence of God (cf. 23:43; 2 Cor. 5:8; Phil. 1:23). And the presence of Moses and Elijah on the Mount of Transfiguration (9:30) belies the notion that they were confined in a compartment of Sheol until Christ finished His work.