1. What is the MPIR in Australian Aged Care?
When an older Australian enters residential aged care, every approved nursing home room has a published price known as the Refundable Accommodation Deposit (RAD) — typically ranging from $350,000 in regional centres to $1,200,000+ in prime metropolitan Sydney, Melbourne, and Perth.
Because many families cannot or do not wish to pay a large lump sum upfront, Australian law allows residents to pay a daily rental equivalent known as the Daily Accommodation Payment (DAP).
The MPIR (Maximum Permissible Interest Rate) is the official statutory benchmark set by the Australian Government (indexed to the 90-day bank accepted bill rate plus a statutory margin of 3.0%) that dictates exactly how much daily interest a provider can charge on any unpaid RAD amount.
2. Current MPIR Rates & Historical Trend
The MPIR is reviewed quarterly (1 January, 1 April, 1 July, and 1 October). Below is the statutory benchmark across recent quarters:
| Effective Admission Period | Official MPIR Rate (% p.a.) | Daily DAP Cost per $100k Unpaid RAD |
|---|---|---|
| Current Benchmark (2026) | 8.51% | $23.32 / day |
| Previous Quarter | 8.34% | $22.85 / day |
| Mid 2025 | 8.38% | $22.96 / day |
| Late 2024 | 8.36% | $22.90 / day |
3. Step-by-Step: How DAP is Calculated from MPIR
The statutory mathematical formula used across all Australian aged care facilities is:
($550,000 × 0.0851) ÷ 365 = $128.23 per day ($3,900 / month)
Remaining $300,000 unpaid × 0.0851 ÷ 365 = $69.95 per day ($2,127 / month)
4. RAD vs DAP: When Does Paying the Lump Sum Make Sense?
Choosing between paying a RAD, paying DAP, or a split combination is one of the most critical financial decisions in aged care:
- Why Families Pay a RAD: The lump sum is 100% guaranteed by the Australian Government and is fully refunded to the resident or their estate when leaving the facility (less any agreed fee drawdowns). It also significantly reduces Centrelink assessable assets in many family scenarios.
- Why Families Choose DAP: It avoids having to sell the family home or liquidate investments in a depressed market. It provides immediate flexibility when care is needed on an urgent basis.
5. Interactive MPIR & DAP Calculator
Use our live calculator below to simulate different room prices and combination splits using the official 8.51% rate. For a quick single-figure conversion, try our dedicated MPIR calculator, or see how the rate has moved over time in our MPIR rate history guide:
RAD vs DAP Accommodation Fee Calculator
Compare your daily accommodation payments (DAP), upfront refundable deposits (RAD), and estimated 5-year estate impact.
Daily DAP Cost: $0.00 / day
Refundable to Estate: 100% ($550,000)
Government Guarantee: 100% Backed
Upfront RAD Paid: $275,000
Monthly DAP Rental: $1,950
Annual DAP Total: $23,403
Upfront Lump Sum: $0 (Nil)
Monthly Rental Cost: $3,900
Refundable to Estate: $0 (Non-refundable)
5-Year Cumulative Outlay Projection
Avg Stay: 2.8 to 5 YearsBased on the average Australian aged care length of stay (2.8 to 5 years), here is the cumulative cost projection:
Save or print this comparison sheet for family consultations and financial advisory meetings.
Related MPIR Guides
- MPIR Calculator: Convert RAD to Daily DAP — instant calculation for any room price
- MPIR Rate History Australia — quarterly rates and what drives changes
- RAD vs DAP Calculator — compare lump sum vs daily payment strategies