What Is The Daily Accommodation Contribution (DAC)?

Key Takeaways

• Definition: DAC stands for Daily Accommodation Contribution. It is a daily amount you pay towards your accommodation in an aged care home if you receive government assistance.
• Eligibility: It applies to residents who are eligible for government support based on a means assessment.
• Payment Options: You can pay the DAC as a daily fee, a lump sum (RAC), or a combination of both.
• Assessment: The Department of Human Services determines your specific rate based on your income and assets.

Quick Definition

The Daily Accommodation Contribution (DAC) is a daily amount payable by a resident for accommodation in an aged care home, applicable when the Australian Government subsidises part of the accommodation cost because the resident usually has lower income and assets.

How The DAC Works In Aged Care

When you enter residential aged care, the cost of your room and amenities is a significant financial consideration. The government expects those who can afford it to pay for their accommodation. However, if your income and assets are below a certain threshold, the government may pay some or all of your accommodation costs.

If the government determines that you are eligible for assistance but still have some capacity to pay, you will be asked to pay a Daily Accommodation Contribution (DAC). This is your personal contribution towards the cost of your room.

The Assessment Process

To determine if you pay a DAC, you must complete a combined income and assets assessment. This is usually done through Services Australia or the Department of Veterans' Affairs (DVA).

1. Submit Forms: You fill out the necessary means-test forms.
2. Calculation: The government assesses your financial situation.
3. Notification: You and your aged care provider receive a letter detailing the maximum contribution you are required to pay.

It is vital to note that the DAC is not a fixed price set by the aged care home. Instead, it is calculated based on your specific financial means. If your financial situation changes, your DAC may also change.

Why The DAC Is Important For Your Finances

Understanding the DAC is essential for effective financial planning when moving into a care facility. It ensures that accommodation remains accessible for people who cannot afford the full market price of a room.

Government Subsidy and Your Share

The cost of a room in an aged care facility is often higher than the DAC amount. The difference between the full cost of the room and your DAC is known as the Daily Accommodation Supplement. The government pays this supplement directly to the aged care provider on your behalf.

This system ensures that:

• You are not unfairly burdened with costs you cannot afford.
• Aged care providers receive fair payment for the housing they provide.
• Access to quality care is maintained regardless of individual wealth.

Paying Your Contribution: DAC Vs RAC

If you are required to pay a DAC, you have choices regarding how you make this payment. You are not forced to pay it as a daily fee if that does not suit your financial strategy. You have 28 days from the day you enter care to decide your payment method.

You can choose to pay via:

1. Daily Accommodation Contribution (DAC): You pay the calculated amount every day. This is similar to paying rent.
2. Refundable Accommodation Contribution (RAC): You pay a lump sum amount. This is essentially converting your daily obligation into a bond-like payment. The balance is refunded to you or your estate when you leave care, minus any agreed deductions.
3. Combination: You pay a portion as a lump sum (RAC) and the remainder as a daily fee (DAC).

Examples of Usage

• Scenario A: Your income and assets assessment indicates you can contribute $30.00 per day towards your housing. You choose to pay this amount fortnightly. This is your DAC.
• Scenario B: You prefer not to have a daily expense. You calculate the lump sum equivalent of your $30.00 daily fee and pay that amount upfront. This is your RAC.

Synonyms & Related Concepts

Synonyms

• Daily contribution
• Subsidised accommodation payment

Antonyms

• Daily Accommodation Payment (DAP): This applies to residents who are not eligible for government assistance and must pay the full cost of their accommodation.
• Refundable Accommodation Deposit (RAD): The lump sum equivalent for residents who are not eligible for government assistance.

Related Concepts

• Means Tested Care Fee: An additional contribution towards your personal and clinical care costs.
• Basic Daily Fee: A fee paid by all residents to cover daily living costs like meals and laundry.
• Accommodation Supplement: The amount the government pays to the provider to top up your DAC.

Frequently Asked Questions

Who determines how much DAC I pay?

Services Australia (or the DVA) determines your rate based on the information you provide in your income and assets assessment. The aged care provider cannot charge you more than the amount advised by the government.

Can my DAC amount change?

Yes. Your contribution is indexed quarterly and reviewed periodically. If your financial circumstances change significantly, you must update your details with Services Australia, which may result in an increase or decrease in your daily contribution.

What happens if I do not complete the income and assets assessment?

If you choose not to complete the assessment, you will likely not be eligible for government assistance. In this case, you may be asked to pay the full accommodation price (DAP or RAD) agreed upon with your provider, rather than the subsidised DAC.

Is the DAC refundable?

No. The Daily Accommodation Contribution (DAC) is a non-refundable daily fee used to cover the cost of your accommodation. However, if you choose to pay it as a lump sum (RAC), the lump sum balance is generally refundable when you leave care.

Navigating Financial Support for Residential Care

Moving into an aged care home involves complex financial decisions. The Daily Accommodation Contribution serves as a safety net, ensuring that accommodation remains affordable for those with limited assets. By understanding how the DAC works, how it differs from full payments like the DAP, and your options for paying it, you can make informed choices that protect your financial well-being. Always consult with a financial adviser who specialises in aged care to determine the best payment method for your specific situation.

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