Home Care Packages, What You Need To Know

• by Steve Jenkosky

Early last year (February 2017) Home Care Packages (HCP) underwent a major reform, giving consumers greater choice and control over their home care package funds. But with that increased choice comes increased responsibility.
If you are considering accessing a home care package, here’s what you need to know.

To determine if you are eligible to receive a home care package you need to be assessed by an Aged Care Assessment Team (usually referred to as an ACAT).
Most people are referred to the ACAT by a medical professional or Social Worker, but you can contact them directly or through the My Aged Care centre.

The time it takes for the assessment to be carried out ranges from a few days (if you’re in urgent need such as leaving hospital) to a few months if your need is not considered urgent. Sometimes the process of applying and getting access to these services can be time consuming and tedious.

Not everyone has the luxury of time to wait for an approval. Organising privately-funded care through a registered provider can be a simpler process. Fewer stages of application and assessment can help you find the ideal caregiver and care plan to suit your needs a lot faster.

If you are approved for a home care package you will receive a letter stating that you have been approved and the level of package you have been approved for. At this point you join the national prioritisation queue until you are allocated a package. The package you receive may be at your approved level or at a lower level while waiting for a package at your approved level (known as an interim package).

To put this into context, there are presently (December 2017) about 105,000 people in the queue for a home care package and about 48,000 of those have been provided an interim package which is below their assessed care needs while they are waiting (typically for a level 3 or 4 package). The other 56,000 are waiting - not assigned a Home Care Package with no interim package. In the May budget the government announced an additional 14,000 high care packages to be provided over the next four years at a cost of $1.6 billion. To about 74,000 by mid 2021 - 2022.

To determine if you are eligible to receive a home care package you need to be assessed by an Aged Care Assessment Team (usually referred to as an ACAT).
Most people are referred to the ACAT by a medical professional or Social Worker, but you can contact them directly or through the My Aged Care centre.

The level of package you receive determines the amount of funding that is paid to the provider. The funding ranges from $22.35/day at Level (1) to $135.87/day at Level (4).

Care and Services supported by the HCP Programme may include; Care services (Personal care services, activities of daily living, nutrition, hydration, meal preparation and diet, management of skin integrity, continence, mobility and dexterity), Support services (Cleaning, personal laundry services, gardening, home modifications, leisure interests and activities) and Clinical services (Nursing, allied health and other clinical services such as hearing and vision services) and access to other health and related services.

You need to choose the provider you want to host your package. This can be done once you have been allocated a package or while you are waiting for one.

When it comes to choosing a provider, it pays to shop around but simply gathering schedules of fees and charges can make the process overwhelmingly confusing. ‘The devil is in the detail’ or so the saying goes, and this could certainly be the case for consumers who are not aware of some providers’ Home Care Package costs, which could see up to half of their funds disappearing in administration, case management and exit fees.

With no maximum cap on the fees a provider can charge, we are currently seeing some providers with very high Home Care Package costs. High administration or case management fees doesn't necessarily equate to high-quality care. The less you pay in fees the more of your Home Care Package funds are spent on actual services and care hours.

There are 4 different types of fees (or costs) to consider when choosing an Approved Provider to manage your Home Care Package. You will get a better sense of value if you know which services you want to access and then compare the cost from one to the other.

Be aware too that some providers charge exit fees to help cover their administration costs in the event that you leave the Provider due to switching or you do not require the package anymore so it’s important to understand the cost of leaving if you choose to.

In addition to the government funding you will be expected to contribute towards the cost of your package if you can afford to do so.

If you are a full pensioner you can be charged the Basic Daily Fee (BDF), which is presently $10.32/day. If your income is higher, you will need to pay an Income-Tested Care Fee (ITCF) in addition to the basic daily fee. The income-tested care fee is assessed by Centrelink based on its income test.

The income-tested care fee is calculated at 50¢ per dollar of income above the income thresholds, which are $26,660.40 a year for a single and $20,703.80 a year for each member of a couple.

The ITCF daily fee is capped at $14.81p/d or $5,392.91 each year for part pensioners and $29.63p/d or $10,785.85 annually for self-funded retirees and there is also a lifetime cap of $64,715.36 which extends across home care and residential aged care. Remember that fee changes don’t always happen as part of the Federal budget so we could still see changes to home care fees.

The income-tested care fee does not add to the value of your package, it simply offsets the amount of funding the government provides. On the other hand the basic daily fee does and in some cases the provider will negotiate this with you — but you need to bear in mind if the provider reduces the basic daily fee it essentially reduces the amount of money in your package.

Let’s look at the example of a fictitious woman named Nola who has a modest income of $27,800 annually from some investments and a part pension of $406.78 fortnightly (Excludes Supplements).

The bottom line is that, for the purposes of calculating her ‘Income Tested Care Fee’ Nola has Annual Income of $38,376 and will have to chip in $25.13 daily ($10.32 BDF + $14.81 ITCF [Capped]) for her Level 2 care package (Value $50.97) so she is still about $9,444 annually better off accessing the Federally funded home care package.

In practical terms, don’t delay if think you might need a home care package. The wheels do turn in processing applications for packages but in many cases, they turn very slowly.

Expect to spend time in the queue for the ACAT assessment, time in the queue waiting for the home care package and when the package finally arrives don’t expect it to meet all your care needs.

Have the reforms delivered consumers greater choice and control? Absolutely! But with that comes the responsibility; to advocate for prioritisation in the queue, research services in your area, shop around and negotiate to make your funds go further and be prepared to top up the package funding with your own money to get all the care you need.

For more information about home care packages, visit the My Aged Care website and make sure you check out our web page: Home Care Packages

Steve Jenkosky trading as Golden Age Advisory is an Authorised Representative of Synchron AFS License No. 243313.
Unless specifically indicated, the information contained in this BLOG post is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek personal advice from a financial adviser.