Home care fees for consumers entering a home care package from 1 July 2014

Page last updated: 18 September 2019

Home care fees for consumers entering a home care package from 1 July 2014

Consumers who commence a home care package from 1 July 2014 may be asked to contribute towards the cost of their care.

Providers may ask these consumers to pay:

  • a basic daily fee and 
  • an income-tested care fee (if their income is over the maximum income for a full pensioner).

These amounts must be included in the consumer’s individualised budget and monthly statement. 

Basic daily fee

Providers can ask everyone taking up a home care package to pay the basic daily fee, irrespective of the consumer’s income and whether or not they are a member of a couple.

Until 30 June 2019, the basic daily fee is 17.5 per cent of the basic rate of the single age pension for all package levels.

As part of the 2018-19 MYEFO Boosting support for older Australians measure, the Government announced a reduction in basic daily fee, with a greater reduction for those on lower packages.

From 1 July 2019, the annual amount of maximum basic daily fees for home care will reduce by:

  • $400 for level 1
  • $200 for level 2
  • $100 for level 3.

To maintain the value of the consumer’s home care package, the Government will increase the value of its contribution for each package level by the same amount, regardless of the amount of basic daily fee that is actually paid.

From 1 July 2019, to give effect to the fee reductions mentioned above, the basic daily fee will be based on the consumer’s home care package level as follows:

  • level 1 – 15.68 per cent of the single person rate of basic age pension
  • level 2 – 16.58 per cent of the single person rate of basic age pension
  • level 3 – 17.05 per cent of the single person rate of basic age pension
  • level 4 – 17.50 per cent of the single person rate of basic age pension

The rate is readjusted on 20 March and 20 September each year in line with changes to the age pension.You can find the basic daily fee amount on the Schedule of Residential and Home Care fees and charges.

Income-tested care fee

Depending on a consumer’s income, the provider may ask the consumer to contribute more to the cost of their care.  This is the income-tested care fee and is different for everyone because it is based on an individual’s income. This fee is in addition to the basic daily fee.

The amount of subsidy and primary supplements that the Government would normally pay to a provider is reduced by the maximum amount of income-tested care fee that the consumer can be charged. 

Full pensioners do not pay an income-tested care fee.

Income assessment

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

The easiest way to complete an income assessment is to use the Aged Care Calculation of your cost of care digital form (SA486). This is a dynamic form and will present different questions based on the answers provided. If the consumer prefers to complete a hardcopy form, they are still able to do so.

If the consumer receives a means tested income support payment, such as the age pension (full or part), disability support pension or service pension, they can call DHS on 1800 227 475 or the Department of Veterans’ Affairs (DVA) on 1800 555 254 and request a pre commencement letter for home care.

DHS (or DVA) will have enough information to calculate the maximum fees payable.

If the consumer does not receive a means tested income support payment, they can request a copy of the Home Care Package Calculation of your costs of care form (SA456) by calling DHS on 1800 227 475 and asking for a copy to be sent to them, or by downloading a copy of the form from the DHS website.

Following the assessment, DHS will advise the provider and the consumer of the maximum fees payable. 

If the consumer does not complete the income assessment, they can be asked to pay the maximum income-tested care fee.

Annual and lifetime caps on income-tested care fee

There are annual and lifetime caps that apply to the income-tested care fee. The annual cap is applied on a daily basis. Once DHS has completed a person’s income assessment they will advise the consumer and their provider of the maximum daily income-tested care fee the person can be asked to pay. Once these caps are reached, the consumer cannot be asked to pay any more income-tested care fees for the relevant period. 

DHS will notify the provider and consumer once the cap has been reached. The Government will pay the remaining income-tested care fees for the consumer by way of increased subsidy to the provider after these caps have been reached. The annual and lifetime caps can be found on the Schedule of Fees and Charges for Residential and Home Care.

Determining fees before entering a home care package

Consumers can ask for a pre commencement letter from DHS before they enter a home care package. 

The pre commencement letter they receive before they start their package will be valid for 120 days, unless there is a significant change in their circumstances. If there is a change, the consumer will need to notify DHS, who will reissue their pre commencement letter. 

If a consumer seeks an assessment before commencing their package, only the consumer will receive the letter. The provider will receive a letter once they advise DHS that the consumer has commenced a package with them.

The Home Care Fee Estimator available on the My Aged Care website can provide a consumer with an estimate of the fees they may be asked to pay for their home care package. 

Review of fees

A quarterly review of income-tested care fees is conducted by DHS. The consumer should be encouraged to contact DHS or DVA to seek a review if their financial circumstances change. 

The basic daily fee increases on 20 March and 20 September each year in line with age pension increases and is published on the Department of Health website. 

Level of services provided when the full income-tested care fee is not charged

For a consumer who started receiving a home care package on or after 1 July 2014, the subsidy and primary supplements payable by the Government are reduced by the maximum income-tested care fee payable by the consumer.  The overall value of the package remains the same; what varies is the source of the funds.

Fees payable while a consumer is on leave

While a consumer’s home care package has been suspended because they are on leave, they can continue to be asked to pay fees for some leave types. This amount must be no more than the usual fee agreed between the consumer and the provider.

Leave type

Basic daily fee

Income-tested care fee

Hospital leave

Can be charged

The full income-tested care fee remains payable for up to 28 consecutive days in a financial year at a particular package level, after which the consumer will pay whichever is the lesser of:

  • their income-tested care fee, as previously advised; or
  • the amount of the reduced basic subsidy, plus the primary supplements payable (set to zero).

Transition care

Cannot be charged

The full income-tested care fee remains payable for up to 28 consecutive days in a financial year at a particular package level, after which the consumer will pay whichever is the lesser of:

  • their income-tested care fee, as previously advised; or
  • the amount of the reduced basic subsidy, plus the primary supplements payable (set to zero).

Residential Respite care

Cannot be charged

The full income-tested care fee remains payable for up to 28 cumulative days in a financial year at a particular package level, after which the consumer will pay whichever is the lesser of:

  • their income-tested care fee, as previously advised; or
  • the amount of the reduced basic subsidy, plus the primary supplements payable (set to zero)

Social leave

(all other suspension types)

Can be charged

The full income-tested care fee remains payable for up to 28 cumulative days in a financial year at a particular package level, after which the consumer will pay whichever is the lesser of:

  • their income-tested care fee, as previously advised; or
  • the amount of the reduced basic subsidy, plus the primary supplements payable (set to zero).

Any subsidy, relevant supplements or home care fees paid to the provider while the consumer is on leave must be included in the consumer’s monthly statement.

Read more about the consumer’s monthly statement.

Example on how to calculate home care fees when a consumer is on leave

A consumer (post 1 July 2014) is a self-funded retiree in receipt of a home care package level 3, no supplements, paying a maximum income-tested care fee of $30.49 (second cap for the income-tested care fee at 20 September 2019).  The home care package is suspended due to the hospitalisation of the consumer for 40 days.

What is payable by the Government and the consumer for the first 28 days?

The Government basic subsidy amount payable for a Level 3 home care package is $92.16 per day (1 July 2019 rates).  The Government subsidy is reduced by the maximum income-tested care fee of $30.49 per day payable by the consumer.  Therefore the Government pays a subsidy of $61.67 per day to the provider and the consumer pays $30.49 per day for the first 28 days.

In addition to the income-tested care fee payable by the consumer, the consumer can also be asked to pay the basic daily fee when they are on hospital leave, currently $10.35 per day (20 September 2019 rates) for a level 3 home care package.

What is payable by the Government and the consumer after the 28 days?

The Government subsidy payable on the 29th consecutive day (unless it goes over a financial year or the consumer changes package level) whilst a consumer is in hospital, is 25 per cent of the basic subsidy amount. In this case, for a Level 3 home care package $92.16 per day as at 1 July 2019 rates), this is $23.04 per day.

When on leave a consumer’s income-tested care fee will be the lower of:

  • their income-tested care fee, as previously advised; or
  • the amount of the reduced basic subsidy.

The basic daily fee remains payable if a consumer suspends their home care package for any reason other than to receive residential respite care or transition care.

In this example as the reduced basic subsidy rate $23.04 per day is lower than the income-tested care fee $30.49 per day, the maximum fee the consumer could be asked to pay is $23.04 per day for the 12 days. For this period no additional subsidy payments will be received from the Government.

In addition to the income-tested care fee payable by the consumer, they can also be asked to pay the basic daily fee when the consumer is on hospital leave, currently $10.35 per day (20 September 2019 rates) for a level 3 home care package.

Note the calculations in this example have been truncated to two decimal places.

Financial hardship assistance

The hardship supplement is available to home care recipients in genuine financial hardship who do not have income to pay their costs of aged care due to circumstances beyond their control. In general, home care recipients who have commenced receiving a home care package on or after 1 July 2014 need to apply for a hardship supplement.

Read more about the hardship supplement in home care.