Blog #03 Fact #02 What is a Daily Accommodation Payment (DAP)?

What is a DAP?

· Short name for ‘Daily Accommodation Payment”

· What is it? – An amount of money that someone may be asked to pay for a room in an aged care facility if they don’t have the actual lump sum to pay for their room, or they don’t wish to pay the amount due as a lump sum. They will be charged at the MPIR ( maximum percentage interest rate). For instance the room charge may be $550,000 and a Daily Accommodation Payment or rental equivalent price for the room and is calculated as follows:

[ $550,000 x 4.01% = $22,055 or $1,837.91 per month] - The rate of 4.01% is as at October 2021.

Are their other options are available? Yes

· Pay part as a lump sum and the balance as an interest equivalent or DAP

· Pay part as a lump sum and have any balance deducted from that lump sum

. Or a combination of the above two options

· If a person pays a lump sum -When is it returned? – Normally when a person leaves the facility or passes away

· When a person passes away – how long till the money is paid to the estate? – Normally after probate, and this may take 12 months or longer

· Does a person receive the whole amount lot back or are there exit fees? – Normally the full amount is paid, however, if the option of having authorised deductions had been chosen – this would be subtracted from the lump sum before payment to the estate

· Does a person receive any interest on any lump sum payments paid to an aged care facility? No

· Does a person receive any capital gain/losses on lump sum payments paid to an aged care facility? No

· If the aged care facility went into liquidation - are there any guarantees that a person will get their money back? Yes – currently (as of January 2021) there is a government guarantee to have funds returned

·  When someone passes and the facility is waiting on probate of the deceased, and that room is available for someone else, does the aged care facility pay interest to the estate? Yes

· Is it possible not to have pay a Daily Accommodation Payment at all, and still receive a room in an aged care facility? Yes