Chaffey Aged Care

Four payment options will be available to eligible residents post 1st July 2014.and further reforms are:

 

Residents will be able to choose to pay for their cost of accommodation through, one of the options listed below.

You will have 28 days from date of admission to decide how you wish to pay the refundable accommodation deposit.

 

Option 1 – Refundable Accommodation Deposit (RAD) or Lump Sum Option:

If you choose to pay your RAD as a lump sum, the entire amount is due from your date of admission and will be refunded in full to your estate. We allow up to six months for you to pay the refundable accommodation payment if your financial circumstances require you to do so. Any amount not paid at the end of the six month grace period will be charged interest from the date of entry. Interest charges will be invoiced monthly until paid. We may reserve the right to ask for a minimum 10% deposit on admission or some other collateral where necessary.

 

A RAD is essentially an interest free loan from the Resident to the provider, refunded after the resident leaves the facility.

 

Choosing a full lump sum RAD, is electing to pay the full price set for the accommodation as a lump sum.

 

For example: Jim enters into care and has been asked to pay $375,000 for a room at Chaffey. Based on his individual circumstances, he elects to pay the entire $375,000.00 as a lump sum.

 

Option 2 – Daily Accommodation Payment (DAP)

If you do not wish to pay a lump sum amount, you have the option to pay a DAP.

 

The DAP is calculated from the RAD at a government set interest rate, which as at 1 Oct 2023 was 8.15% pa.

 

In this example, Jim instead decides to pay his $375,000.00 as an equivalent DAP which would be $83.73 per day. ($375,000 X 8.15% / 365=$83.73).

 

Option 3 – Part RAD & Part DAP or Combination Option:

This is determining an amount payable by way of RAD and the remainder payable by DAP .based on the 01/10/2023 MPIR of 8.15% pa

 

In this example, Jim instead decides to pay for his $375,000 full priced room, with $250,000 as an upfront lump sum (RAD) and then converts the remaining $125,000.00 to a DAP, which in this case would equate to $27.91  per day.

 

Upon leaving the facility, Jim will have the RAD balance refunded to his estate, less any charges outstanding.

 

Option 4 – A combination RAD & DAP with draw downs:

In addition to choosing to pay by way of a combination of RAD and DAP, residents may further elect to have their daily accommodation payment (DAP) drawn down from their lump sum RAD on a monthly basis.

 

In this example, Jim provides a $250,000 RAD and pays the remaining $125,000 as a DAP. However, rather than physically pay the DAP each month, Jim elects to have the DAP drawn down from the existing RAD held by the aged care organisation.

 

This means each month, an entry is made against the outstanding RAD balance for the amount owing from the DAP; i.e. For a 30-day month, DAP=$837.30  (30 X $27.91)

 

Therefore, after the first month, the existing RAD now totals $249,162.70 ($250,000 - $837.30).

 

However, due to the diminishing balance of the RAD as a result of the DAP being drawdown from the RAD, the DAP will increase each month relatively to ensure the total agreed original market price is continuing to be paid by Jim.

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In the example above, after the first month the calculation of the DAP will be as follows:

$375,000 (Original Room Price) - $249,162.70 (RAD held)=$125,837.30 (new base for calculating DAP payable). Interest would be adjusted for the next month $125,837.30 x 8.15% / 365 x 30=$842.94