How a DAP is worked out
The daily accommodation payment is the room price multiplied by the government's maximum permissible interest rate (MPIR), divided by 365. For people entering care from 1 October to 31 December 2026 the rate is 8.51%, so a $550,000 room works out to about $128 a day.
The rate is locked in on the day you enter care. For people entering from 1 November 2025, the daily payment then rises twice a year with inflation.
What happens to a lump sum (RAD)
A RAD is refunded when you leave the home. Under the new rules the home keeps 2% of it each year for up to five years, so at most 10% is kept. If you pay part as a lump sum, the daily payment only applies to the unpaid part.
You don't have to decide straight away. You have 28 days after entering care to choose, and you pay the daily amount in the meantime.
Things to weigh up
- The Age Pension. A RAD isn't counted in the pension assets test, so paying one can increase the pension.
- Cash flow. A daily payment can be taken out of a RAD balance, so many people pay part as a lump sum and let the home deduct the rest.
- The estate. A RAD is refunded to the estate, usually within 14 days of probate being shown.
- Aged care fees. Paying a RAD doesn't reduce your aged care fees, because it still counts as an asset in the aged care means test.
To see the whole picture, including the basic daily fee and means-tested contributions, use the aged care fees calculator.
Common questions
What is the MPIR right now?
It's 8.51% for people entering care from 1 October to 31 December 2026. It's reviewed every quarter.
Is a RAD fully refunded?
For people entering care from 1 November 2025, the home keeps 2% a year for up to five years. The rest is refunded when you leave, along with anything you haven't had deducted for daily payments or fees.
Can I pay part RAD and part DAP?
Yes. Any mix is allowed. The daily payment is charged only on the part of the room price you haven't paid as a lump sum.
Where these figures come from
- Department of Health, Disability and Ageing: Schedule of fees and charges for residential care
- Department of Health, Disability and Ageing: Residential aged care fee scenarios
- My Aged Care: Aged care home costs and fees
Last checked 5 October 2026. Results are estimates, not financial advice. For an official estimate call My Aged Care on 1800 200 422.