Refundable Accommodation Deposit, Daily Accommodation Payment or a combination of both
Residents will have the choice to pay for their accommodation payment either as a refundable deposit, a lump sum, also known as a Refundable Accommodation Deposit (RAD) or an equivalent daily payment, a periodic payment, also known as a Daily Accommodation Payment (DAP) or a combination of both.
This methods of payment allows direct conversion between Daily Accommodation Payment (DAP) and Refundable Accommodation Deposit (RAD) using the Maximum Permissible Interest Rate (MPIR).
Residents can also choose to draw down the Daily Accommodation Payment (DAP) and some or all of the other daily payments (such as Basic Daily Fee (BDF), Means Tested Amount (MTA) etc.) from the refundable deposit except for their personal impress account. Conversely, residents can top-up and increase their refundable deposit to reduce the daily accommodation payment.
Please inquire about our PEACE OF MIND plan methods of payment for security, flexibility and best value.
Residents will have up to 28 days from entering care to choose which methods of payment they prefer. Until the method of payment is decided, the daily payment (DAP) is paid unless and until a refundable deposit (RAD) is paid. Daily payments are required to be paid one month in advance.
If any amounts are drawn down, either the daily payment will be increased by an amount to compensate the decreasing refundable deposit balance, or an interest is paid on the draw down amount, and added to the invoice using the formula below.
The formula to calculate the equivalent daily payment (DAP) of a refundable deposit (RAD) is by multiplying the refundable deposit by the Maximum Permissible Interest Rate (MPIR) and divided by 365 days.
This Maximum Permissible Interest Rate (MPIR) is also used to calculate either the increase of daily payment equivalent of the drawn down amount or the interest on the drawn down amount. The MPIR is set by the Government, currently at 6.63% as of 20th March 2014, and will be updated every three months.
government accommodation supplement
The Government assists and assesses those residents who do not have sufficient means to pay their accommodation payments. Fully and Partly Supported Residents (Full and Part Pensioner) will be eligible for Government Accommodation Supplement payment.
If the Resident’s assets are between $45,001 to $153,905 (March 2014), the Resident will still be means tested and may be required to pay Accommodation Contribution, which can be paid as Refundable Accommodation Contribution (RAC) or as Daily Accommodation Contribution (DAC) which can be deducted from the RAC. The actual amount will be assessed and advised by Department of Social Services (Centrelink).
The Government will either pay the maximum or a part accommodation supplement, depending on the resident’s assessed financial circumstances.
means tested amount
Means Tested Amount (MTA) is the co-contribution that residents may be asked to pay towards to the cost of their accommodation and care through assets and income tests.
Their co-contribution will be capped to a maximum of $25,000 annually to a lifetime maximum of $60,000. This will be assessed and calculated by Department of Social Services (DSS) through Centrelink.
Prior to 1st July 2014, only the assessment of assets is used to determine their contribution towards the accommodation costs and only the assessment of income towards their ongoing cost of care.
The daily Means Tested Amount will be calculated by the Department of Human Services basically as follows:
The daily income tested amount is 50cent per dollar above the ‘assessable income free area’ – currently $22,700 - divided by 365.
17.5% of assets between ‘first asset threshold’ of $45,000 and ‘second asset threshold’ - $144,500, plus
1% of assets between ‘second asset threshold’ of $144,500 and ‘third asset threshold’ of $353,500, plus
2% of assets above ‘third asset threshold’ of $353,500 Divide the sum of a) + b) + c) by 365
The total sum of 1 (from Income) and 2 (from Assets) is the Means Tested Amount (MTA).
The Means Tested Amount (MTA) is to be collected by the Provider but is wholly paid to the Government.