About DAP indexation
Under the new Aged Care Act, providers will be required to index daily accommodation payments (DAPs) paid by residents on the new accommodation arrangements.
DAPs will be indexed on 20 March and 20 September each year in line with changes in the Consumer Price Index (CPI). These are the same dates the Age Pension increases.
DAP indexation will help providers continue to provide high quality residential aged care and keep up with rising costs.
Indexation will not apply to daily accommodation contributions (DACs).
Provider responsibilities
As a provider, you are responsible for indexing the DAP’s paid by residents when DAP indexation is applicable.
You need to:
- calculate each resident’s new DAP amount that applies on the indexation day
- tell them when their DAP changes
- adjust the DAP payable if a Refundable Accommodation Deposit has been paid, or is paid, topped up or drawn down on.
You can’t use a different rate to the published value or apply indexation at any other time.
Indexation requirements will be outlined in the Aged Care Rules that support the new Act.
Who it applies to
DAP indexation will apply to residents who contribute to their accommodation costs through a DAP, and:
- enter your aged care home on or after 1 November 2025; and
- are on the 1 November 2025 fee arrangements when they enter, including people who have moved to your aged care home after opting into the 1 November 2025 fee arrangements.
It will also apply to people who enter your aged care home under the 1 July 2014 fee arrangements, if they:
- enter residential care for the first time after 31 October 2025; or
- enter following a break in residential care of over 28 days after 31 October 2025.
Note: DAP indexation will apply to people who were receiving a home care package, approved for home care, or were on the national priority list on 12 September 2024 based on the above criteria.
DAP indexation does not apply to residents under the 1 July 2014 accommodation arrangements who pay a DAP, even if it is paid after 1 November 2025.
DAP index numbers
The current DAP index number will be published in the Schedule of Fees and Charges for Residential and Home Care and the Aged Care Rules that will support the new Act.
The table below shows DAP index numbers from 20 September 2025 onwards.
| DAP indexation day | DAP index number |
| 20 September 2025 | 1.0 |
DAP indexation days
DAP indexation days are 20 March and 20 September each year. The first time DAPs are indexed will be 20 March 2026.
The new DAP index number will be published prior to each DAP indexation day (20 March or 20 September). As a provider, you need to use this to index DAPs paid by residents who DAP indexation applies to.
You must apply the new DAP amount from the indexation day. You may calculate the new DAP amount at any time.
Reference indexation days
A resident’s reference indexation day is the indexation day (20 March or 20 September) immediately before the day they enter care.
If a resident moves rooms voluntarily, their reference indexation day is the indexation day immediately before the day they move.
If they enter care or move rooms voluntarily on an indexation day, the reference indexation day is that day.
A resident’s reference indexation day won't change unless they voluntarily move to a new room.
Worked examples: a resident’s reference indexation day
Joe, a resident entering care
Joe enters an aged care home on 1 July 2026. DAP indexation applies to Joe. The reference indexation day for Joe will be 20 March 2026.
This is because 20 March 2026 is the indexation day immediately before the day Joe enters care.
Paula, a resident entering care on an indexation day
Paula enters an aged care home on 20 March 2026. DAP indexation applies to Paula. The reference indexation day for Paula will be 20 March 2026.
This is because Paula is entering care on the indexation day.
Omar, a resident moving rooms
DAP indexation applies to Omar.
If Omar decides in October 2026 to move to a new room, the reference indexation day will be 20 September 2026.
This is because 20 September 2026 is the indexation day immediately before the day Omar moves rooms.
How to index a resident’s DAP
There are 2 parts to calculating a resident’s DAP:
- index the maximum possible DAP
- adjust it for any amounts paid as a refundable accommodation deposit (RAD).
If a resident has never paid a RAD, you should follow the steps in part 1 below to calculate their indexed amount of DAP payable.
If a resident has paid a RAD at any time (even if the current balance is zero) you should follow the steps in part 1 and part 2 below to calculate their DAP payable.
Part 1: index the maximum possible DAP
Step 1: maximum possible DAP amount
Calculate their maximum possible DAP on the price agreement day. Disregard any indexation adjustments that have been made since.
Agreed accommodation price expressed as a RAD x maximum permissible interest rate (MPIR) on the price agreement day ÷ 365 = maximum possible DAP
Step 2: DAP indexation factor
You will need the index numbers for the DAP indexation day you are calculating for and the resident’s reference indexation day.
Calculate the DAP indexation factor by dividing the DAP index number on the indexation day by the DAP index number on the resident’s reference indexation day.
DAP index number on indexation day ÷ DAP index number on reference day = DAP indexation factor
Round the result to 4 decimal places. Round up if the fifth decimal place is 5 or more.
Step 3: indexed DAP
Multiply the maximum possible DAP amount from step 1 by the indexation factor from step 2.
Maximum possible DAP x DAP indexation factor = amount of DAP payable
Round the result to 2 decimal places. Round up if the third decimal place is 5 or more. This is the amount of DAP payable amount.
If a resident has never paid a RAD, this is the amount of DAP payable.
If, however, the resident has paid a RAD at any time (even if the current RAD balance is zero) the provider must proceed to part 2 to calculate the DAP payable.
Part 2: adjust the amount of DAP payable for the RAD amount
Step 1: maximum possible DAP amount
Calculate the amount the registered provider could have charged as a DAP amount on the price agreement day, using the method described in part 1.
Step 2: Calculate the RAD balance including retention deductions
Calculate the resident’s RAD balance for the relevant day (even if the current balance is zero) and add to that amount the sum of any retention deductions made on or before the relevant day.
RAD balance for the relevant day + sum of any retention deductions made on or before the relevant day = RAD balance including retention deductions
Step 3: Calculate the RAD balance including retention deductions as a proportion of the agreed accommodation payment amount
Divide the RAD balance from step 2 by the agreed accommodation payment amount as recorded in the accommodation agreement.
RAD balance including retention deductions ÷ agreed accommodation payment amount = RAD balance including retention deductions as a proportion of the agreed accommodation payment amount
Step 4: Calculate the proportion of the agreed accommodation payment amount paid as a DAP
Subtract the step 3 amount from 1.
1 – RAD balance including retention deductions as a proportion of the agreed accommodation payment amount = proportion of the agreed accommodation payment amount paid as a DAP
Step 5: Amount of DAP payable
Multiply the step 4 amount by the step 1 amount.
RAD balance including retention deductions x proportion of the agreed accommodation payment amount paid as a DAP = Amount of DAP payable
Round the result to 2 decimal places. Round up if the third decimal place is 5 or more.
If a resident has paid a RAD at any time (even if the current balance is zero), this is their DAP payable.
Worked example: indexing the amount of DAP payable on a DAP indexation day
About Jean
Note: the index numbers and MPIR used throughout these examples are illustrative only.
Jean enters care on 1 January 2027 and agrees to an accommodation price of $600,000. The MPIR at that time is 7.00%.
Jean’s reference indexation day is 20 September 2026.
Jean’s DAP needs to be indexed on 20 March 2027.
The DAP index number on:
- 20 September 2026 is 1.10
- 20 March 2027 is 1.18
Part 1: index Jean’s maximum possible DAP
Step 1
Agreed accommodation price x MPIR ÷ 365 = maximum possible DAP amount
$600,000 x 7% ÷ 365 = $115.07
Step 2
DAP index number on indexation day ÷ DAP index number on reference day = DAP indexation factor
1.18 ÷ 1.10 = 1.0727
Step 3
Maximum possible DAP x DAP indexation factor = amount of DAP payable
$115.07 x 1.0727 = $123.44
If Jean had never paid any RAD, the DAP she could be asked to pay from 20 March 2027 is $123.44 per day.
If Jean had paid some of her accommodation costs as a RAD, her provider should also follow the steps in part 2 below to calculate her DAP after indexation.
Part 2: adjust Jean’s amount of DAP payable for the RAD amount
Jean originally paid $400,000 as a RAD and is paying the remainder as a DAP. The RAD balance is currently $398,707.89 because a retention amount of $1,292.11 has previously been deducted.
Step 1
We know from the calculations in part 1 that Jean’s maximum possible amount of DAP payable is $123.44.
Step 2
RAD balance for the relevant day + sum of any retention deductions made on or before the relevant day = RAD balance including retention deductions
$398,707.89 + $1,292.11 = $400,000
Step 3
RAD balance including retention deductions ÷ agreed accommodation payment amount = RAD balance including retention deductions as a proportion of the agreed accommodation payment amount
$400,000 ÷ $600,000 = 0.6667
Step 4
1 – RAD balance including retention deductions as a proportion of the agreed accommodation payment amount = proportion of the agreed accommodation payment amount paid as a DAP
1 - 0.6667 = 0.3333
Step 5
RAD balance including retention deductions x proportion of the agreed accommodation payment amount paid as a DAP = amount of DAP payable
0.3333 x $123.44 = $41.15
The DAP Jean can be asked to pay from 20 March 2027 is $41.15 per day after being adjusted for the RAD amount.