RAD vs DAP: aged care room costs explained
Every figure in this guide is drawn from government registers, the Department of Health and Aged Care's published data, or providers' own published schedules; nothing is estimated. General information, not financial advice; confirm your own situation with My Aged Care on 1800 200 422.
When a residential aged care home advertises a room price, it is really advertising one number you can pay two ways. Understanding the mechanics can change your family's decision by hundreds of thousands of dollars, so here it is in plain English.
The RAD: a refundable lump sum
The refundable accommodation deposit is a lump sum you pay on entry. It works like an interest free loan to the home: the balance is government guaranteed and comes back when you leave. Two things reduce the refund. First, for residents entering from 1 November 2025 under the new Aged Care Act, homes may deduct a retention amount of 2% of the RAD per year for up to 5 years. Second, you can agree to have other charges drawn down from it. Room prices above a threshold, around $750,000 and indexed, need government approval, which is why so many rooms are priced just below it.
The DAP: rent instead of a loan
The daily accommodation payment is the same room paid as you go. The formula is fixed: the unpaid RAD multiplied by the maximum permissible interest rate (MPIR), divided by 365. The MPIR is set quarterly by the government and has been around 8% in recent quarters, so a $500,000 room works out near $110 a day. Since the reforms, DAPs are also indexed twice a year while you are a resident. A DAP preserves your capital and avoids selling assets quickly; a RAD avoids an ongoing bill and the balance is protected. Many families split the difference, paying part as a lump sum and part daily, and you have 28 days after entering to decide.
What you actually pay
The advertised price is a maximum, not a quote. Everyone pays the basic daily fee, set at 85% of the single age pension. Whether you pay the advertised room price, a partial contribution, or nothing more depends on a means assessment by Services Australia, and the government pays the accommodation costs of supported residents. Some providers, including one on our books, charge no RAD at all as a matter of policy, so it is always worth asking. Every room price on Glidance's Canberra homes pages is the home's own published figure with a source link, shown with both payment forms where the home publishes them.
Glidance lists each Canberra home's published room prices with both the lump sum and daily equivalents, straight from the home's own published pricing.
Compare Canberra room pricesFrequently asked questions
- Is the RAD really refundable?
- Yes, the balance is government guaranteed and refunded when you leave. Under the new Aged Care Act, for residents entering from 1 November 2025, homes may deduct a retention amount of 2% of the RAD per year for up to 5 years; agreed amounts for care or extra services can also be drawn down with your consent.
- How does a RAD convert to a DAP?
- The DAP equals the unpaid RAD multiplied by the maximum permissible interest rate (MPIR), divided by 365. The MPIR is set quarterly by the government and has been around 8% in recent quarters, so a $500,000 room is roughly $110 a day.
- Does everyone pay the advertised room price?
- No. The advertised price is the maximum. A means assessment decides whether you pay the full amount, a partial contribution, or nothing beyond the basic daily fee, with the government subsidising supported residents.
- Can I mix a RAD and a DAP?
- Yes. You can pay any portion as a lump sum and the rest as a daily payment, and you have 28 days after moving in to choose. You can also ask for the DAP to be drawn from the RAD you have paid.