gosford-MPIR increasing to 8.38%
The MPIR continues to rise with the rate increasing to 8.38% per annum from 1 January 2024. This rate applies to people who move into residential aged care (or move to a new provider) from 1 January to 31st March 2024 or clients NOT assessed as low-means who move rooms during this period.
We have seen a steady increase in the MPIR since mid-2020, but it is not yet at the highest ever point. In July 2008, the rate peaked at 11.75%. Hopefully we do not get back to those highs.
Practical implications
The increasing rate is likely to make the cost of funding care more difficult for some people – increasing the need for aged care advice. It may also increase the preference to pay a Refundable Accommodation Deposit (RADs) instead of Daily Accommodation Deposit (DAP).
For example, a room with a RAD of $500,000 at 8.38% will convert to a daily accommodation payment (DAP) of $114.79 per day ($41,900 per annum). This is an additional “rental cost of $1,150 per annum compared to someone entering the room in December 2023 (when MPIR was 8.15%).
The increase can also impact residents who need to make involuntary moves. For example, if an increased need for dementia care or closure of the aged care provider forces either a move in rooms or care provider, the MPIR for the resident may be reset to the current rate.
Low-means residents only have the MPIR set if they move to a new provider. RAD-paying residents have the MPIR reset for either a move in rooms or a change in providers.
Aged care is complicated and the impact the MPIR can have on a person's cash flow, highlights the importance of seeking advice from an accredited Aged Care Specialist. If you know someone who is going into residential aged care, needs to change rooms or facilities and requires assistance understanding their options, call Sophie Doyle on 02 4325 0884 or email [email protected].
Sophie Doyle (AR#000470612) is an Aged Care Specialist at Morgans Financial Limited (Morgans AFSL 235410 / ABN49 010 669 726); with a passion for assisting people make informed financial decisions, as they navigate their way through retirement and aged care.
Disclaimer: While every care has been taken, Morgans Financial Limited makes no representations as to the accuracy or completeness of the contents. The information is of a general nature only and has been prepared without consideration of your individual objectives, financial situation or needs. Before making any decisions, you should consider the appropriateness for your personal investment objectives, financial situation or individual needs. We recommend you see a financial adviser, registered tax agent or legal adviser before making any decisions based on this information. Current at 2 December 2023.
