If your loved one is currently in aged care, it might be time to review your Refundable Accommodation Deposit (RAD).
Residents in aged care can pay accommodation costs by lump sum (RAD) or by daily interest payments (DAP). It may be worth considering paying part or all accommodation fees by daily payments in the current high interest rate environment.
The Maximum Permissible Interest Rate (MPIR) is the interest rate for calculating DAP in aged care. The MPIR is fixed on the day that an aged care resident enters permanent care and remains fixed for the period of time the resident resides in that care facility.
Residents entering permanent care during the period 1st July 2020 to 30th June 2022 would have a MPIR set at about 4%. Considering the returns available in the current high interest rate environment, these residents and/or family members may consider reviewing their RAD/DAP payments.
Residents entering aged care today will pay the current MPIR set at 8.15%.
Rob Landale is our STS Accounting Group Accountant and Retirement Specialist. If you have any queries or question relating to aged care or retirement don’t hesitate to get in touch with Rob on 0429824324 or firstname.lastname@example.org