Understanding the costs of home care packages

When comparing home care deals for you and your family, it is really important to take a look at the hours you will get from different providers. You can learn a little more about why this matters here. The following guide will help you understand how the Government subsidy and fees for home care works.

For the majority of full pensioners the Government will subsidise the full amount of your home care package, leaving you with no out of pocket expenses. The amount subsidised is the same across the country, however depending on your care needs and your ability to pay, you may be asked to co-contribute where you can. Here is a bit more detail of the types of costs you might encounter when planning for home care.

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Home care packages

Government fees

Depending on your assigned level of home care package (between 1 to 4), the Government allocates a yearly subsidy for you to spend on your care and support. For each level, this subsidy is currently:

Level 1 $8,267.25
Level 2 $15,045.30
Level 3 $33,076.30
Level 4 $50,286.05

You get to choose and plan with your chosen home care provider, and allocated how these funds are spent. For costs relating to other home care program options, click here.

The two Government fees that may apply to you include:

Basic daily fee (sometimes called a co-payment)

If you have a home care package you may be asked to pay a basic daily fee (daily care fee) of up to 17.5% of the single basic age pension. (That equates to $10.43 per person per day or $146.02 per person per fortnight). Paying the basic daily fee may also mean you are able to add more hours to your home care package where you need to.

Please note that each year (between 20 March and 20 September), this fee increases in line with changes to the Age Pension.

Income tested care fee

If you have a source of income other than the aged pension then it is recommended you arrange means testing or an income assessment with the Department of Human Services. Our team can help arrange this for you. Speak to a team member.

The Department of Human Services will assess your ability to contribute a little more to the cost of your care based on your income. It is good to note that unlike residential care, the value of your assets, such as your home, are not included in this assessment. Not everyone needs an income assessment. If you receive a means tested Australian Income Support payment from Centrelink, such as the Age Pension or Disability Support Pension, or you receive a Service Pension or Income Support Supplement from the Department of Veterans’ Affairs (DVA) you will not need a means tested income assessment.

You will only be asked to pay an income-tested care fee if your annual income exceeds the following approximate thresholds:

  • Individual person – $26,764.00
  • Member of a couple separated from partner due to illness (individual income) – $26,244.40
  • Member of a couple living with partner (combined income) – $20,755.80

Some examples of income tested care fee

  • If your income is below $51,667.20 you might be assessed to pay $14.96 p/day (equivalent $5,446.43/yr)
  • If your income is above $51,667.20 you might be assessed to pay $29.92 p/day (equivalent $10,892.89/yr)
  • If you do need to pay an income tested fee, then the subsidy you receive from the government would be reduced by the amount equal to the income tested fee

If you are still unsure, you can use the My Aged Care Fee Estimator to see if this fee applies to you and how much you might need to contribute.

Using your subsidy

When you start your home care package, you will put together a plan and a budget to spend your subsidy on services to support your goals. Some important things to understand about your subsidy for home care:

  • It is important to use your subsidy on services you need. Make sure when you put your home care plan together, that you work with your provider to assign your subsidy towards services that make a difference for you, whilst still putting a little aside for a rainy day
  • If you move to a new provider, then so does any unspent subsidy. It will only go back to the Government when you no longer need home care services
  • Your subsidy cannot be transferred to anyone else

Provider costs and fees

Your provider work with you to help you get all the services you need and make a plan and a budget with you. Although the costs for these services are charged to your home care package budget, it is important to understand different providers have different fees.

We recommend, when shopping around that you not only ask what all these fees might be but compare the amount of hours of service a provider can offer you (per week or per month) for your package budget as the best comparison of value. To learn Why hours really matter when comparing prices click here.

We have a range of great resources to help you compare home care providers. This great shopping guide helps you understand provider fees in more detail.

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