Aged Care Placement | Senior Relocation

MPIR RAD DAP Interest Rate Reducing October 2019

Posted: 14th August 2019

MPIR RAD DAP Interest Rate Reducing October 2019

MPIR RAD DAP Interest Rate Reducing October 2019

The interest rate used to convert a Refundable Accommodation Deposit (RAD) lump sum payment to the equivalent Daily Accommodation Payment (DAP) is called the Maximum Permissible Interest Rate (MPIR).

The MPIR rate will reduce by a further 0.56% from the 1st October to 4.98 %.

The dramatic fall is caused by the low interest rate environment and the recent Reserve Bank rate cuts.

This should mean that more residents will opt to pay DAP and retain the value of the exisiting assets (generally a family home).

The implication for the aged care provider will now mean that if a facility is significantly refurbished and at 40% concessional ratio …. Their $57.14/day Daily Accommodation Contribution works out to be an equivalent RAC of $418,797 … meaning that a supported resident will be more valuable to a facility if their RAD price is below $418,797.

Given that the rate was at 5.96% in June of this year, this is a significant change to the rate in a very short space of time.

On an average RAD of $450,000 with a client choosing to pay via DAP only, their aged care fees (and subsequently a facility’s profitability) have dropped by $4,410/yr.

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"Fully Supported" placement into beautiful large private room and ensuite - completed in 10 days "Thank you for being so, so, so helpful with Ian's placement; with love at Christmas Time, Thank you ." Bo.

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RAD Negotiation "Thank you for your excellent work with reducing Dad's RAD accommodation payment. Julie and I are thrilled with your results. I hope we can use your assistance again and we will certainly pass on your name to friends going forward. " Libby P.

Senior Relocation - Clearing house prior to sale "Thank you so much for all your help clearing Mum's home and transporting all the boxes to my place. Settlement on Mum's home was on 21st March and the new owners are very pleased with the work you did. Thank you again." Monica B.

Senior Relocation - Clearing house prior to sale "Many Thanks for your care with the tidy up of my parents home in preparation for the sale - we were delighted with your exceptional work." Mary K.

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