What is a DAP?
The Daily Accommodation Payment explained in plain English.
The short version
A DAP (Daily Accommodation Payment) is an ongoing daily fee you pay instead of a lump sum RAD. It's calculated as interest on the room price using the government-set MPIR (Maximum Permissible Interest Rate).
The critical thing to know: DAP is not refundable. Every dollar you pay in DAP is gone. And since November 2025, your DAP increases with inflation twice a year.
How DAP is calculated
Daily DAP = Room Price (RAD) × MPIR ÷ 365
Daily DAP = $500,000 × 0.0765 ÷ 365 = $104.79 per day
Annual cost = ~$38,250
Over 3 years = ~$121,400 (with CPI indexation)
The MPIR is currently 7.65% (as of January 2026). It's set quarterly by the government based on the government bond rate. Learn more about the MPIR →
DAP now increases with inflation (new rule)
From 1 November 2025, DAP is indexed to CPI twice yearly — on 20 March and 20 September. The first indexation was 20 March 2026.
This means your daily payment will increase over time, roughly in line with inflation (currently estimated at ~3.5% per year).
Over a 3-year stay, this indexation adds thousands of dollars to the total cost compared to a fixed DAP. Over 5 years, the difference is substantial.
DAP is not refundable
Unlike a RAD (which is mostly refunded), every dollar paid as DAP is a permanent cost. There is no refund when the person leaves care or passes away.
This is the fundamental trade-off: RAD ties up a large sum but most comes back; DAP keeps your money free but the payments are gone forever.
When does DAP make sense?
- You don't have the lump sum available — not everyone has $400,000+ in accessible funds
- Your investments earn more than the MPIR — if your money is earning 8-10% in a share portfolio, it may be better to keep it invested and pay DAP at 7.65%
- You're waiting to sell a property — DAP buys time while you arrange the RAD funds
- The expected stay is short — for very short stays, DAP may cost less than the RAD retention
- You want to keep assets liquid — for estate planning or emergency access
DAP vs RAD — which is better?
It depends on the room price, the MPIR, your investment returns, expected length of stay, and your pension situation. The breakeven point shifts with each variable.
Most families choose a combination — paying part as RAD and the rest as DAP. This reduces daily costs while keeping some money accessible.
This information is general in nature and does not constitute financial advice. Rates are current as of March 2026 and may change. We recommend speaking with a specialist aged care financial advisor.