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.

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Statutory Protection

Providers cannot invent their own interest rates. By law, the daily DAP must be calculated using the exact official MPIR set by the Department of Health and Aged Care.

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) 8.38% $22.96 / 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:

Daily DAP ($) = (Unpaid RAD Amount × MPIR %) ÷ 365 Days
Worked Example 1 — Full $550,000 Room (100% DAP):

($550,000 × 0.0838) ÷ 365 = $126.27 per day ($3,840 / month)

Worked Example 2 — $600,000 Room with $300,000 RAD Paid Upfront:

Remaining $300,000 unpaid × 0.0838 ÷ 365 = $68.88 per day ($2,095 / 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 8.38% rate:

⚡ 2026 Statutory Formula (MPIR: 8.38% p.a.)

RAD vs DAP Accommodation Fee Calculator

Calculate your exact daily, monthly, and 5-year accommodation costs based on whether you pay a lump sum (RAD), daily payment (DAP), or a combination.

$550,000
Quick Presets:
50% RAD / 50% DAP
100% DAP (No upfront cash) 50/50 Split 100% RAD (Full lump sum)
Current Government MPIR Interest Rate: 8.38% p.a. (Fixed on admission)
Option 1: 100% Lump Sum (RAD)
$550,000

Daily DAP Cost: $0.00 / day

Refundable to Estate: 100% ($550,000)

Gov Guarantee: 100% Backed

Your Selection
Combination (RAD + DAP)
$63.12 /day

Upfront RAD Paid: $275,000

Monthly DAP Rental: $1,920

Annual DAP Total: $23,045

Option 3: 100% Daily (DAP)
$126.27 /day

Upfront Lump Sum: $0 (Nil)

Monthly Rental Cost: $3,840

Refundable to Estate: $0 (Non-refundable)

📊 5-Year Financial Impact Projection

If you pay DAP from savings or draw down fees from your RAD, here is the net cost over the average Australian aged care stay (2.8 years to 5 years):

1 Year DAP Cost
$23,045
3 Year DAP Total
$69,135
5 Year DAP Total
$115,225
Estate Refund (at 5yr)
$275,000

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