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What is the RAD and DAP in aged care?

When beginning to explore aged care and finding out more about how its funded, you will probably be confronted with a whole bunch of abbreviations.

The RAD and DAP are commonly used when discussing pricing in residential aged care.

RAD is short for ‘Refundable Accommodation Deposit’, which is a lump sum payment that is refunded once you leave Eldercare.

DAP is short for ‘Daily Accommodation Payment’, which are ongoing, non-refundable rental-style payments.

The DAP is calculated by multiplying the RAD of a room (which can be found on each aged care home’s page) by the Maximum Permissible Interest Rate or MPIR (which is set by the government) and divided by the number of days in a year.

Calculation of Daily Accommodation Payment (DAP), used in aged care finance

To give you an example, if a room has a RAD of $350,000 and the MPIR is 4.07%, the equation will look like the below:

Please note this is an example only. The MPIR changes on a quarterly basis and may be different to what has been supplied here.

Some people pay for their accommodation with a combination of the RAD and the DAP if they don’t have the full RAD available.

Both of these payments cover accommodation (e.g. the physical room and facilities) only. There are also other fees which cover things like care and additional services.

Our flowchart, which steps through the process of moving into residential aged care, explains the full spectrum of costs which include accommodation, care and additional services.

You will have 28 days once you enter care to decide which method you will choose.

Want to get a better understanding of how you will be able to pay for your accommodation? Call our experienced residential admissions team on 1300 925 414 during business hours or email and they will be in touch.

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