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Aged Care Costs – Home Care Packages

The aged care costs associated with home care packages appear confusing at times.

With so much information out there, confusion surrounds what support you’re eligible for,  and how much aged care costs will be for home care packages. With that in mind, we can help to simplify it.

What do the different home care package levels mean?

There are four levels of home care packages. Each level of home care package provides a different amount of funding.

HOME CARE PACKAGE LEVELS:

1: Supports people with basic care needs

2: Supports people with low-level care needs

3: Supports people with intermediate care needs

4: Supports people with high-level care needs

How much is each home care package worth?

The funding for each level of home care package is subject to change. As of 20th September 2018, the government home care subsidy rates for each package were as follows:

HOME CARE PACKAGE LEVELS:

1: $22.66 per day – $8,270 per year

2: $41.22 per day – $15,045 per year

3: $90.62 per day – $33,076 per year

4: $137.77 per day – $50,286 per year

Depending on which package you’ve got approval for, the subsidy is paid to an approved home care provider once you’ve entered into a home care agreement with one.

calculator pen invoice

Does the government subsidy cover all aged care costs for home care packages?

The government home care subsidy contributes to the cost of your services and care delivery.

It’s also expected that you’ll contribute to the cost of your care if you’re able to do so. This is through a basic daily fee, and in some cases, an income-tested care fee.

Basic daily fees explained

Your service provider may ask you to pay a basic daily fee, which currently doesn’t exceed 17.5% of the single person rate of the basic aged pension.

As of 20 September 2018, the basic daily fee was $10.43 per day based on the current age pension. This amount is subject to change.

The basic daily fee’s calculated daily and is payable for each day that you’re in receipt of a home care package.

The home care package provider will deduct this amount from your government subsidy, and subsequently, this isn’t an out of pocket, up front fee.

Income-tested care fees explained

The aged care costs associated with home care packages include an income-tested care fee.

An income tested care fee depends on your individual income and is in addition to the basic daily fee.

The income tested care fee’s determined by completing an Aged Care Fees Income Assessment form through the Department of Human Services. Their contact number is 1800 227 475.

The income assessment’s based on income and not assets. However, if you’re a part of a couple, then half of your combined income gets tested, to determine the income tested care fee (irrespective of who earned the income).

The amount of subsidy that the Government would normally pay to a provider gets reduced by the income-tested care fee amount payable by you, the consumer.

Income-tested care fee caps

On a positive note, there are caps on the chargeable amount of income tested care fees for in home care. This will depend on your income. At the moment, the income threshold for a single person is $52,036.40.

If you earn under this amount in a financial year, then the maximum amount chargeable for the income-tested care fee is $14.96 per day.  So the less you earn, the less income tested care fee you’ll have to contribute towards your home care package.

Even if you earn above the threshold, the most income-tested care fee that you’ll  contribute to your home care package, at the moment is $29.92 per day. In most cases, you’ll still receive some government subsidy towards your home care package, even if you’re above the income threshold.

For example, if you’re receiving a home care package level 4, the subsidy is $137.77 per day. Let’s say that you earn above the threshold. You’ll need to pay a maximum of $29.92 per day. This amount gets deducted from the $137.77, and the government will subsidise the remainder.

Income-tested care fees for low income earners

Some people don’t have to contribute any income-tested care fee. If you’re a low income earner, usually there’s little or no income tested care fee to contribute towards your care.

Full pensioners don’t need to contribute any income-tested care fees.

Subsequently, it’s best to find out if you’ll have to pay this fee prior to signing a home care agreement, and commencing a home care package.

Additional aged care costs associated with home care packages

Home care package service providers often charge additional fees. They’re typically referred to as administration costs and case management fees.

Furthermore, these fees usually get deducted from the home care package government funds that the provider receives.

So, be sure to ask your provider if they charge these fees and how much they charge. Providers have a home care package fee schedule. By looking at the schedule, you’ll see how much different services cost.

Example of a home care package and the fees and charges

It’s possible to simplify the aged care costs associated with home care packages. The following example is of a man named Jon, who lives in Melbourne. this example will help you to understand aged care costs involved with home care packages.

smiling man with glasses

Jon’s receiving a home care package level 3. This means that he’s getting a subsidy of $90.62 per day. He’s a full pensioner, so he doesn’t need to contribute an income tested care fee. His provider charges a basic daily fee of $10 per day. They also charge a case management fee of 10% of the subsidy.

Currently, he’s receiving wound care from a registered nurse, and the charge is $60 per 1/2 hour. Let’s say that he receives this service three times per week, for a chronic leg wound. In addition to this, Jon gets his apartment cleaned weekly, and that takes 2 hours. This gets charged at $45 per hour. Furthermore, he goes to community respite once per week so that his carer can have some much needed time. The community respite costs $80 weekly.

Home care package level 3 ($90.62 day) = $634.34 weekly
Basic daily fee ($10 day) – $70 per week
Case management fee (10% subsidy) – $63.43 per week
Wound care ($60 1/2 hr x 3 times week) – $180 per week
Domestic support ($45 hr x 2 hrs week) – $90 per week
Community respite ($80 week)– $80 per week
Remaining subsidy after services and fees charged = $150.91 weekly
With $150.91 of package funds accumulating each week, Jon isn’t using up all of his package each week at this stage. He’s consequently accumulating unspent funds, which he’ll be able to utilise when the time arises that his care needs and care goals change.

Further help to understand home care package costs

For further reading regarding home care packages, and associated costs feel free to contact us.

You can also contact My Aged Care on 1800 200 422, or go to the Department of Health website. for further information.


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