This can benefit people who:
- do not have sufficient cashflow to meet aged care expenses
Potential Benefits:
- Paying DAP by drawing down from the RAD, reduces the amount of ongoing fees that have to be met from the persons cashflow
- Where a person pays part of their accommodation payment as a RAD, aged care facilities must agree to the drawdown of DAP payments from the RAD
Things to be aware of:
- Drawing down the DAP from the RAD will reduce the balance of the RAD over time.
- DAP payments will increase over time as the outstanding balance of the accommodation payment increases
- If RAD balance reduced to nil, the person will need to pay additional RAD or commence paying DAP from regular cashflow
- Need to consider estate planning implications of reduced RAD payable on death
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