What Is the Daily Accommodation Contribution (DAC)?
Think of the Daily Accommodation Contribution (DAC) as your share of the “rent” for your room in an aged care home. It’s a daily fee that helps cover the cost of your accommodation—like your bedroom, common areas, and maintenance. The Australian government sets rules for how this works, but what you pay depends on your income and assets. Not everyone pays the same amount, and some might not pay anything at all.
Who Needs to Pay DAC?
DAC applies to you if:
- You’re moving into permanent aged care (not short-term respite).
- Your income or assets are above a certain threshold (the government calls this “means testing”).
If your finances are below that threshold, the government covers your accommodation costs. If you’re above it, you’ll contribute part of the cost. It’s like splitting a restaurant bill based on what each person can afford.
How Is DAC Calculated?
The government does the math for you. They’ll look at:
- Your income (pensions, investments, etc.).
- Your assets (property, savings, cars—but not your family home in some cases).
Based on this, they’ll send you a letter saying whether you need to pay DAC and how much. The maximum daily rate is set by the government (around $61 per day in 2024, but this changes yearly). You might pay less than that—or nothing at all.
How Do You Pay DAC?
You’ve got options, just like choosing between tea or coffee:
- Daily payments: Small amounts deducted regularly.
- Lump sum: Pay a larger amount upfront (called a Refundable Accommodation Deposit or RAD). This can reduce your daily fees—like getting a bulk-buy discount.
- Mix both: Part daily, part lump sum.
Your aged care home will explain the choices, but you can also chat with a financial advisor for help.
What Does DAC Cover?
Your DAC pays for:
- Your private or shared room.
- Utilities (electricity, water).
- Building maintenance (so the heating doesn’t quit in winter).
It doesn’t cover:
- Daily living costs (meals, laundry—these are separate fees).
- Extra services like fancy haircuts or Netflix subscriptions.
How to Estimate Your DAC
se the government’s Fee Estimator tool online (it’s free and takes 10 minutes).
- Talk to Services Australia or a financial advisor.
- Ask your aged care home for a cost breakdown.
Pro tip: Don’t panic if the numbers seem big at first. Many people use the sale of their home or savings to cover lump sums.
Final Thoughts
DAC might sound as fun as a tax return, but it’s just a way to make aged care fair for everyone. Whether you pay a little, a lot, or nothing, the goal is the same: to keep you comfortable and cared for. If you’re feeling overwhelmed, take a deep breath. You’re not alone—there’s plenty of help to sort this out. After all, your golden years should be about relaxation, not spreadsheet nightmares.
