Understanding RAD & DAP
This is general information only and is not intended as financial advice. We recommend that you seek independent financial advice to decide on the best payment option for you and your family.
Refundable Accommodation Deposit (RAD)
An upfront lump sum payment set by the aged care home. It is refundable upon leaving the home.
Each aged care home determines its RAD based on quality, location and features, which can vary from bed to bed. Approval from the Aged Care Pricing Commissioner must be sought if a facility wants to charge more than $550,000 for its RAD.
Note: If a resident wishes to pay by RAD, they must be left with a minimum asset value of 2.25 times the basic age pension at the time of entry, according to the Living Longer, Living Better reforms. Currently, this is equal to $51,500, but this is subject to quarterly change.
Daily Accommodation Payment (DAP)
An ongoing rental-style payment. It is calculated by applying the maximum permissible interest rate (MPIR) to the RAD and dividing by 365.
Accommodation prices must be advertised by aged care facilities in RAD and DAP figures before charging clients.
A new resident has 28 days to decide whether they will pay by RAD, DAP or a combination of both. If paying by RAD, the facility must give six months to pay the total lump sum from the date of moving in.
RAD & DAP Payment method examples
Single Room private ensuite
Maximum Refundable Accommodation Deposit (DAP/RAC): $550,000
Effective MPIR: 6.31%
Maximum accommodation Payment (DAP/RAC): $95.08
Example of combination payment
Example DAP/RAC %: 50%
Example DAP/RAC $: $275,000
Example DAP/RAC %: 50%
Examples DAP/RAC $: $47.54
Single Room Share ensuite
Maximum Refundable Accommodation Deposit (DAP/RAC): $390,000
Effective MPIR: 6.31%
Maximum accommodation Payment (DAP): $67.42
Example of combination payment
Example DAP/RAC %: 50%
Example DAP/RAC $: $195,000
Example DAP/RAC %: 50%
Examples DAP/RAC $: $33.71
Share Room share ensuite
Maximum Refundable Accommodation Deposit (DAP/RAC): $250,000
Effective MPIR: 6.31%
Maximum accommodation Payment (DAP/RAC): $43.22
Example of combination payment
Example DAP/RAC %: 50%
Example DAP/RAC $: $125,000
Example DAP/RAC %: 50%
Examples DAP/RAC $: $21.61
Aged Care Means-Tested Care Fee
In addition to any RAD or DAP payable, all residents must pay the daily care fee, which is 85% of the aged pension. Currently, the maximum basic daily fee for aged care is $54.69 per day or $19,961.85 per year. This is payable directly to the aged care facility on a fortnightly or monthly basis.
Some residents will also be required to pay the means-tested care fee. The means test determines how much the government will contribute based on a combination of assets and income. As of 13 May 2022, the means-tested care fee is between $0 and $259.26 per day. This fee is subject to change.
