Aged Care Glossary
Some definitions and examples to help with understanding aged care costs
An amount some people pay to either contribute towards or cover the full cost of the room. This amount is dependent on the means assessment and will vary depending on the room you choose.
When paying for your Accommodation, you can select one of the following payment options:
- Refundable Accommodation Payment (RAD)
- Daily Accommodation Payment (DAP)
- RAD/DAP combination
- Part RAD with draw down
Refundable Accommodation Payment (RAD)
This is an individual’s contribution to accommodation costs when they receive no government support. This is the agreed price of the room, which can be paid as a lump sum, rather than a daily payment. The RAD is fully refundable after departure (less any charges, fees and interest outstanding)
Refundable Accommodation Contribution (RAC)
This is an individual's contribution to accommodation costs when they are partially supported by the government and they choose to pay as a lump sum rather than as a daily payment. The RAC is fully refundable after departure (less any charges, fees and interest outstanding).
Daily Accommodation Payment (DAP)
This is an individual's contribution to accommodation costs when they receive no government support and either don’t have the means to pay a lump sum or choose to make a rental-type daily payment
DAP is charged daily and is calculated from the Refundable Accommodation Deposit amount at the government set interest rate. This is known as the Maximum Permissible Interest Rate (MIPR). There are no refunded funds when the resident leaves.
Daily Accommodation Contribution (DAC)
This is an individual's contribution to accommodation costs when they are partially supported by the government and they choose to make a daily payment.
You may prefer to pay using a combination of the RAD and DAP.
If the total room price is $500,000, you may prefer to pay
50% RAD = $250,000 and
50% DAP = $27.67 daily
Part RAD with drawdown
You may choose to pay a part RAD with remaining DAP (or other charges) drawn down from the part RAD. In this instance you may need to top up the RAD or pay as DAP as the funds deplete.
Basic Daily Care Fee
The Basic Daily Care Fee is used to contribute towards the day-to-day living costs, such as meals, cleaning, laundry and facilities management. Everyone entering an aged care home is required to pay this fee.
This fee is set by the Australian Government at 85% of the single aged care pension and is indexed each March and September.
Additional services fee
This fee is for EstiaPlus, enhanced hospitality and lifestyle services offered by in our homes. The home will discuss with you the available additional services.
Means tested care fee
This is an additional contribution towards the cost of care that some residents may be required to pay. The Department of Human Services (Centrelink) will calculate if the resident is required to pay this fee based on an assessment of the resident’s income and assets. Centrelink reassess residents every quarter and this fee may fluctuate dependent on any changes which may have occurred altering the resident’s income and assets.
Maximum Permissible Interest Rate
The Maximum Permissible Interest Rate (MIPR) is a Government set interest rate used to calculate a daily accommodation payment based on your agreed room price. It is used to determine equivalence between a daily payment and a refundable lump sum deposit, giving you a choice in how to pay.