Have you recently been approved to receive an Aged Care Package or Home Care Package and asked to complete an Income Assessment Test? If you’re not sure what it is and if you have to pay an Income Tested Fee (ITF) for your Home Care then continue reading as we explain it in simple terms.
At CareAbout, we speak to people every day who are confused by the fees and particularly the Income Tested Fee. We’re happy to answer your questions over the phone, otherwise read on so you can understand the in’s and out’s of the Income Tested Fee and the impact it has on for your My Aged Care Home Care Package.
What is an Income Tested Fee?
The income tested care fee (ITF) is a payment you may be required to make that goes directly towards your own Home Care services. The amount you pay is determined by an income test. This fee is different for everyone because it’s based on your individual financial situation.
Why do I have to pay an Income Tested Fee?
While the government subsidises the cost of Home Care, to make this sustainable for older Australians, it doesn’t pay for it all and asks for contributions from those who can afford it.
The good news is, these costs are capped on an annual and lifetime basis, making affordability, and planning easier. As of 20 September 2023, the maximum Income Tested Care Fees you can be asked to pay in your lifetime is $78,524.69. Once you reach the lifetime cap, you don’t have to pay an Income Tested Fee.
How much do I have to pay?
The Income Tested Fee is different for everyone and is dependent on how much income you’re receiving.
The income fee is capped at a certain amount – which means you will not be asked to pay more than the cap. Below are the daily, annual and lifetime caps for each income segment (as of Sep 2023).
Older Australians who have low income as per the below details, won’t be asked to pay any Income Tested Fee. This applies to you if you are:
Those who have low income as per the below details, will not pay any Income Tested Fee. This applies to you if you are:
- Single, with annual income of $0 – $32,331.00
- A member of a couple living apart due to illness earning between $0 – $31,707.00
- A member of a couple living together earning between $0 – $25,053.60
If you are in the middle-income bracket, your Income Tested Fee can be:
Up to $17.97 per day or $6,543.66 per year. This applies to you if you are:
- Single, with an annual income between $32,331.00 – $62,332.40
- A member of a couple living apart due to illness earning between $31,707.00 – $61,708.40
- A member of a couple living together earning between $25,053.60 – $47,668.40
If you are in the higher income bracket, your Income Tested Fee can be:
Up to $35.95 per day or $13,087.39 per year. This applies to you if you are:
- Single, with an annual income over $62,332.40
- A member of a couple living apart due to illness earning over $61,708.40
- A member of a couple living together earning over $47,668.40
As mentioned previously, there is a lifetime cap of $78,524.69 – you’ll not be asked to pay more than this (as of Sep 2023). And the great news is that it carries through to Income Tested Fees in Aged Care Homes. This means that if you do need to move into an Aged Care Home, the government counts the combined fees you’ve paid toward your Home Care Package. Click here to read more.
How is the Income Tested Fee calculated?
Once this amount is finalised, Services Australia will notify you and your provider (if you already have one). The government will then subtract your Income Tested Fee amount from the total subsidy they pay towards your Home Care Package.
What income I get assessed for?
‘Income’ is the amount you have left after paying income tax and the Medicare levy.
The following are not counted as income:
- Any pharmaceutical allowance, rent assistance or telephone allowance.
- The pension supplement.
- The Clean Energy Supplement
- In the case of a pension payable under the Veterans, “Entitlements Act 1986” an amount equal to four percent of the amount of the pension
What if my income changes?
Your income is reviewed twice a year in-line with indexation, so if your income changes, so will your fee amount.
If your income changes significantly and you cannot wait for the annual review, you may request to have your income reviewed at any time – and by submitting another Income Tested Fee assessment form.
Where does the Income Tested Fee go?
The Income Tested Fee is payable directly to your chosen Home Care Provider. It goes straight onto your Home Care Package and is used for services and supports that you agree to.
To understand more about the different types of Home Care Package fees you might have to pay. If you’re planning to move your loved one into an Aged Care facility, read more about Aged Care Home Fees and Costs here.
Free, expert Home Care advice is just a phone call away!
Navigating the Aged Care system in Australia can be daunting, especially when you’re dealing with financial issues. But it’s not something you have to do alone. CareAbout is Australia’s leading Home Care placement service. We’ve helped thousands of families like yours to choose the right Home Care provider and Residential Aged Care for their needs and we would love to support you.