Home Care Reductions in Subsidy

Page last updated: 28 April 2017

The two types of reduction that apply to the home care subsidy are:

  • The compensation payment reduction
  • The care subsidy reduction

Compensation payment reduction

The home care provider must inform the Department of Health if a care recipient commences a home care package and also receives a:

  • compensation entitlement under a judgment
  • settlement
  • reimbursement arrangement (such as an injury or illness from workplace or motor vehicle accident or under a common law claim)

This can be done by completing the relevant section of the Aged Care Entry Record form.

The department may apply a compensation payment reduction amount from the day the care recipient commences the package. The department will advise the home care provider and the care recipient of the amount of the compensation payment reduction.

The home care provider will be able to invoice the care recipient for the total amount of the compensation payment reduction in addition to the other relevant home care fees and charges.

Failure to advise the department

If a provider does not advise the department that a care recipient is entitled to compensation and the department later becomes aware of this, the department will recover the home care subsidy paid on behalf of the compensable care recipient for the period during which a compensation payment reduction should have applied.

If a compensable care recipient’s claim has not been settled, but the compensation insurer has agreed to pay or contribute to the care costs associated with the injury, a compensation payment reduction can be applied.

Care subsidy reduction (income-tested care fee)

The income-tested care fee for a care recipient receiving home care from 1 July 2014 for a particular day is the amount equal to the care subsidy reduction applicable to the care recipient on that day. Section 48-7 of the Aged Care Act 1997 sets out how the care subsidy reduction is calculated in the care subsidy reduction calculator.

The Department of Human Services (DHS) calculates the maximum income-tested care fee based on an assessment of the care recipient’s financial information. The income test assessment does not include the value of the person’s home or any other assets.

The amount of the basic subsidy and primary supplements for home care that the Government would normally pay to a provider on behalf of the care recipient is reduced by the income-tested care fee that the care recipient may be asked to pay. The care subsidy reduction is administered by DHS.

There are circumstances under the aged care legislation where the care subsidy reduction (income-tested care fee) is set to zero. These circumstances are outlined in section 48-8 of the Aged Care Act 1997 and section 88 of the Subsidy Principles 2014.

More information is available on the income-tested care fee and the annual and lifetime caps that apply to the income-tested care fee in home care.


For enquiries about compensable care recipients, providers and compensation payers can email Compensation.Enquiries.ACC@health.gov.au

For enquiries about home care subsidies and supplements email subsidiesandsupplements@health.gov.au.

More information