Did you know that changes to your Home Care Package funds are afoot? The government is soon going to be paying Home Care Package funds in arrears starting in February 2021, and reclaiming unspent Home Care funds from September 2021. Don’t worry, this doesn’t mean you’ll lose your unspent Home Care Package funds! It just means that the government will be holding those funds instead of your Home Care provider.
Currently, there is over $1 billion in unspent Home Care Package funds. This poses a pretty big problem, as there are also 120,000 people desperately waiting for Home Care. There is a huge amount of money tied up in these unspent funds – just sitting there – while thousands of people go without any care and support at all.
With the upcoming changes, the government will have access to more money so that they can release more Home Care Packages and help more people. If you already have a Home Care Package, these changes won’t affect you. However, if you don’t yet have a Home Care Package, it may mean that you’ll be able to access funding more quickly!
What are unspent funds?
Unspent funds are just that – money that is sitting in a ‘pool’ and not being spent. Many people who already have their Home Care Packages, are advised to put aside some of their monthly Home Care Package funding for a ‘rainy day’. Some providers give this recommendation – often called a Contingency Fee – simply because they are the ones who get to hold these excess funds and it can help with their own cashflow.
However, most people never actually use this money – and the idea of Home Care Package funding is that it is allocated to people who have immediate need of it. It’s goal is to provide regular care and support that allows you to stay living safely in your own home.
There are also many funds that remain unspent due to poor provider management. These could be things like mediocre care planning which leads to services not being taken up and delivered, scheduling issues meaning carers don’t turn up when they’re meant to, or poor staff training.
Other people choose to put aside money in order to save up for something that they can’t yet afford. For example, if they want new split system air conditioning throughout their house, they may set aside money each month until they have enough to pay for it.
What are the upcoming changes to Home Care?
From February 2021, providers will be paid after they have delivered Home Care services. Essentially, they will need to invoice the government for services and then wait to be paid. This is more aligned with other government funding programs such as the NDIS.
Beginning in September 2021, the government will take back unspent funds and hold them instead of the provider.
Both of these changes could make providers a little anxious, as they may face a few months without their usual positive cashflow. The good news is that the government has suggested that it will provide some initial support to help providers through these first months until they have “caught up” and regained their footing.
How to minimise any negative impact of these change
Hopefully, any difficulties that providers face because of these changes won’t be passed onto their Home Care Package customers. But, it’s good to prepare just in case!
Look out for any new or increased fees!
At the moment, many providers choose not to charge their customers the Basic Daily Fee. This fee is set by the government, but providers are allowed to waive it if they choose (unlike the Income Tested Fee which is mandatory). Let’s hope that we don’t see more providers choosing to charge the Basic Daily Fee in order to boost their cashflow.
If your provider decides to increase or ask you to pay a Basic Daily Fee and you are unwilling to, it might be time to hunt around for a provider with more reasonable fees. Transferring your Home Care Package to a new provider is much easier than you might think!
Spend your excess, ‘rainy day’ funds
If you have excess unspent funds, we recommend that you spend the money now on things that will make you more comfortable. Too often we see large pools of money being hoarded away, yet much needed care is sacrificed in order to save that money.
Sadly, this can lead to declining health and then the need to move into an Aged Care Home before you should – at which point you lose all of the saved Home Care Package funding anyway! Use the money you have now! Regular, quality care helps you to stay in your home for longer – and can prevent you from moving into Aged Care.