What are contingency fees?
A contingency fee is an amount of money that you pay now to save up for a future event.
Home Care Package contingency fees are not additional out-of-pocket fees that you pay yourself. This contingency amount comes directly from the pool of your Home Care Package funds.
Why do providers ask for a contingency fee?
Some providers suggest that you pay a contingency fee for good reason. Their intentions are good and honest, and they are trying to get you to set aside some money so that you can pay for a big-ticket item that you need.
Unfortunately, not all providers ask for a contingency payment for honest reasons. It is possible that a provider asks all of their Home Care Package clients to pay a set amount of money as “contingency” so that they have a large amount of money in their account and can therefore benefit from the interest earned on this lump sum.
Do I have to pay a contingency fee?
You do not have to pay a contingency fee. It is completely up to you and you should never feel pressured into paying it.
Often, providers will describe contingency fee payments as your “rainy day fund” and may scare you into paying it. It is CareAbout’s recommendation that you don’t pay, unless you are setting this amount aside to pay for something that you very much need to keep you in your home, like an air-conditioning unit.
The idea of a rainy-day fund doesn’t make much sense to us when it has been proven that the more care and support you receive NOW, the longer you are able to stay in your home and avoid moving into Residential Aged Care.
If you hold off from getting support you need now in order to save for a rainy day, you’re actually ensuring that that rainy day comes much sooner than it would if you used that money for the support you need today.
Unspent Home Care Package amounts
If you choose to pay a contingency fee, this amount sits in your Home Care Package as “unspent funds” until you make use of it.
It is good to keep in mind that, when the time comes where you need to apply for a higher-level Home Care Package, the government assessors will look at any unspent funds in your current Package.
Having unspent funds, even if they are there for a “rainy day”, could indicate to the assessors that you don’t actually require of all of your current funding, and are therefore not in great need of higher-level care.
Want further advice?
CareAbout’s expert Advisers know all of the ins and outs of contingency fees, as well as all other Home Care Package fees. If you’re unsure and want clarity, speak to one of our Advisers on 1300 036 028.