Home Care Package Fees
Feeling Confused? Understanding Home Care Package fees is tricky! There are many different fees and each provider has their own way of charging them. Here's everything you need to know!
Are you feeling confused about the various fees and costs associated with government funded Home Care packages? If so, you’re not alone. Navigating the complexities of Aged care packages is often referred to as finding your way through a maze which is riddled with jargon, and dead-ends.
It can be a challenge to determine how much you will need to pay, how much the government subsidy will cover, and how much the provider will charge you from your own Home Care Package funds. But don’t worry we’ve helped thousands of families find their way through and we’d love to help yours.
In this article, we’ll break down the different types of Home Care package fees and costs you need to be aware of, providing you with a clear understanding of what to expect.
Home Care Packages or Aged Care Packages are government-subsidised packages that provide ongoing support for older people who wish to stay at home. The package is simply an amount of money the government will put towards your needs. The packages come in four levels, from basic care needs (Level 1) to high care needs (Level 4) – up to $59,000 worth of support a year.
Know more about the different levels of Home Care Packages here and how much funding they provide.
Your total Home Care Package budget is a combination of Government subsidised funds and the fees you may be asked to pay. There are various types of fees you can be required to pay such as an Income Tested Fee, Basic Daily Fee or any additional fee you agree to pay. Together, these funds cover your Home Care services costs that fund your provider to organise and manage your Aged Care package services.
Let’s understand common fees associated with your Home Care Package:
The Income tested fee is a fee set by the government that some people may be asked to pay if their income is over the maximum income cap set by the government. This fee is different for everyone and assessed on several things including any pensions you receive, any income streams such as investments and rental properties. The amount you pay depends on your individual circumstances and is assessed by the government through an income test. You are required to pay this fee directly and it is non-negotiable. There is a cap on the maximum amount anyone can be asked to pay annually and also over your life-time.
If you receive the full Age Pension or your annual income is up to $32,331, you won’t be asked to pay any income tested fee. The capped amount changes with indexation on 20 March and 20 September every year and are up to date as at 20 September 2023.
If your income is more than the capped amount ($32,331 annually) or you are a self-funded retiree or a part-pensioner, you may be asked to pay some cost towards your Home Care Package based on an income assessment. Your income will be assessed by Centrelink.
The maximum income tested fee is $78,524.69 which is the lifetime cap and you won’t be asked to pay more than the maximum amount in your lifetime.
This capped amount is updated as of 20 September 2023, My Aged Care.
For more in-depth information on the Income Tested Fee, read this article: Income Tested Fee Explained
The Basic Daily Fee is added to the government subsidy to increase the funds available to you in your Home Care Package budget offering you more support. Your Home Care Package provider may ask for this fee if they realise you need more support than what is available to you through the Package.
So, if you want more care on top of what is covered in your Home Care package budget, it’s worth considering contributing to the Package through a Basic Daily Fee or discussing private services through your Home Care provider.
The Basic Daily Fee is set at $12.53 per day, or 17.5% of the pension rate (September 2023). A lot of providers waive this fee, however, it depends on the Home Care provider you select and CareAbout can look to match you with a Provider whose fees meet your needs.
As per the recent update on 20 September 2023, the Basic Daily Fees are as follows:
Need Help choosing a Home Care provider with the right fees for you? Speak to an expert adviser on 1300 721 877.
A Home Care Package Administration Fee is a fee charged by Home Care providers to help cover the administrative costs of managing and delivering your care services. Typically, the Admin Fee is calculated as a percentage of your overall package funds and from January 2023 is capped at 15% of your Home Care Package amount.
Since January 2023, the combined Home Care fees have been capped at 35%. Home Care providers cannot charge more than 20% for Care Management and more than 15% for Package Management fees out of your Home Care Package funds. By understanding and discussing this fee with your provider, families can ensure their loved ones receive quality care.
Care Management is also sometimes called a case management fee, and this is a fee Home Care service providers must deliver to all care recipients, even if you choose to self-manage. To provide care management, your provider must:
A good Care Manager will be an advocate for you, and will find ways in which to maximise the number of hours and the value you will get out of your Package. Often, Care Managers will find additional supplementary funding and supports for you (depending on your eligibility). Your Home Care provider is not allowed to charge more than 20% of the Home Care package funds for Care Management (1 January 2023).
Package Management includes a range of administrative and organisational tasks related to ensuring the quality, smooth delivery and management of a Home Care Package such as:
Your provider is not allowed to charge more than 15% of the package for Package Management (1 January 2023)
Services provided under the Home Care Package Program are GST-free. If you are supplementing your Home Care Package by paying for additional care privately, these services may be subject to GST. Check with your home care provider.
Some Home Care providers also charge a one-off establishment fee at the commencement of your Home Care Package service. This is to cover the cost of the initial set up of your package, including care planning, budget preparation and the completion of associated administration tasks. Generally, the establishment fee changes depending on the level of package you are assigned (and reflecting the complexity of your care needs). Level 1 establishment fees are the lowest and level 4 are the highest.
Some Home Care providers will recommend their customers set aside a contingency fee in their Home Care Package – otherwise known as a rainy-day fund. CareAbout does not recommend this, it is much more beneficial to use all Home Care Package funds for your care, and studies show that you are much less likely to need a rainy-day fund if you are actually receiving the care you need!
From 1st January 2023, providers are not allowed to charge an exit fee if you decide to terminate their care, even if you have agreed to this fee previously.
The subsidy you receive is different for each level of Home Care package. Based on your income assessment you may or may not be required to pay out-of-pocket fees. Your government subsidy is reduced by this amount. See the table to know the daily maximum subsidy you can receive from your package.
Amounts in the table above are up-to-date as of 1 July 2023.
The government contribution is paid directly to the Home Care provider for the services supplied that are outlined in your Care Plan. You work in partnership with the provider to determine the care and services you need, within the package budget.
Your Home Care fees are paid every day for Home Care Package funds assigned to you and not just on the days you receive your service. Your Home Care provider may ask you to pay your Home Care fees on a fortnightly or monthly basis.
If you can’t afford your Home Care costs for some reason, you can ask to be considered for financial hardship assistance. Depending on your situation, you may apply for financial hardship assistance with your basic daily fee and/or income tested care fee. If you are eligible, the Australian Government will pay some or all of your aged care costs.
Note: You can’t receive financial hardship assistance for additional service fees.
Even though you understand all the costs and fees associated with your package, it can still be difficult figuring out the cost you have to pay on your own. Let CareAbout experts help you find your way and minimise any confusion!
Finding a provider that is right for you is not always an easy process. There are over 900 Home Care Package providers and over 2600 Nursing Homes in Australia and all of them have different services, styles, pricing and offerings.
CareAbout is Australia’s leading Home Care placement service. We’ve helped thousands of families choose the right Home Care provider and Residential Aged Care for their needs and we would love to help you.
Whether you’re looking for a quality Home Care Package provider or Aged Care Home in your local area, CareAbout can help.
Speak with a CareAbout Expert now on 1300 721 855.