Home care packages come with a budget allocation that can be spent on the care plan you develop with your home care provider. This budget needs to cover:
- Administration and case management fees
- Service provider fees
- Travel time for workers.
The budget value depends on your approved level of Home Care Package. Most of this value is paid by the Government but you may also be asked to contribute a portion. Your fees do not depend on which package you receive, just what your assessable income is calculated to be.
Everyone accessing a home care package can be asked to pay a basic daily fee. This is currently $10.10 per day ($3,686.50 per year) and indexes on 20 March and 20 September in line with age pension changes.
If you are a part-pensioner or self-funded retiree you may also be asked to pay an additional income-tested fee if you have assessable income over the current thresholds of $26,072.80 for a single person or $20,235.80 (each) for a couple living at home together or $25,604.80 (each) for an illness-separated couple. Assessable income uses the Centrelink rules for income and includes payments from Centrelink or Veterans’ Affairs.
The income-tested fee is subject to a maximum cap of $14.49 per day ($5,276 per annum) for a part-pensioner or $28.98 per day ($10,552 per year) for a self-funded retiree or person who receives a small means-tested pension. Over your lifetime, you will not pay more than $63,313 in income-tested fees.
Terry & Jean live in their home and have $630,000 in cash and other financial investments. They receive a small age pension and his share of total assessable income is calculated as $37,443.
Terry has recently been approved for a level 3 home care package.
Once a package is allocated, Terry will have $35,858 available to spend on care and lifestyle services. He will be asked to contribute the basic fee of $3,687 plus an income-tested fee of $5,276 for a total cost of $8,963 per year. The government pays the rest of the costs.
Looking at funding options is important for meeting the costs of home care packages, as this is usually in addition to your current living and household expenses.
Strong levels of cashflow or options to access equity in the home or other investments may be important in the later years of retirement to help fund home care. For many clients, the budget available with an allocated home care package may not be enough to cover all your care needs, and may need to be topped up with privately purchased additional services.
Note: rates all current to 30 June 2017.