4. What are the costs of a Consumer Directed Care (CDC) Home Care Package?
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There are costs associated with Government Funded Consumer Directed Care Home Care Packages that are not charged with privately paid care, which consumers with a Home Care Package need to understand. Discover here the true costs of Consumer Directed Government Subsidised Home Care Packages. This is a really important page to understand especially for Part Pensioners and fully Self-Funded Elders.
When is a Home Care Package Government Funded or Government Subsidised?
- Full Pensioners receive a Government Funded Home Care Package because they pay no Income Tested Care Fee and from 1/7/2019 we waived the Basic Daily Care Fee. So Pensioners with Daughterly Care their Home Care Package is fully funded by the Government.
- Part Pensioners pay no Basic Daily Care Fee with Daughterly Care from 1/7/2019 however the Government will ask you to pay part of the Income Tested Care Fee. That’s why we say you receive a Subsidised Home Care Package. Read the Income Tested Care Fee section further down the page for detailed information.
- Fully Self-funded Retirees pay no Basic Daily Care Fee with Daughterly Care from 1/7/2019. The Government requests you pay the Maximum Income Tested Care Fee see below for more detail, so your Home Care Package is subsidised by the Government.
- If your Home Care Package started before 1/7/2014 then you pay no Income Tested Care Fee and from 1/7/2019 you pay no Basic Daily Care Fee, so your Home Care Package is Government funded.
There are 3 types of fees payable for a Government Subsidised Home Care Package:
- Fees set by the Government, paid from your pocket;
- Fees set by the Approved Provider for Home Care Package management and care management in line with the Government Guidelines. These fees are paid by your Home Care Package, they don’t come out of your pocket;
- Fees for Direct Care or support services bought or provided by the Home Care Package via the Approved Provider or companies they contract to. These fees are deducted from your Home Care Package, so they are not from your own pocket, unless you have more services than your Home Care Package can afford.
1. Fees set by the Government (From 20 September 2019 to 19 March 2020)
A) The Maximum Basic Daily Care Fee (BDCF)
From 1/7/2019 Daughterly Care has waived this fee, so the following information is for general information only.
The Consumer Directed Home Care Program prefers Elders to make a co-contribution to the funding of their in home aged care. Whilst it is called a “Maximum Basic Daily Care Fee” it is not “a fee” in the true sense of the word. It is actually a co-contribution and therefore increases your Home Care Package funding available to be spent on your care.
The Maximum Basic Daily Care Fee, or co-contribution, for a senior on a Level 4 HCP is currently $10.63 per day, per person, so $148.82 per fortnight, per person i.e. $3,869.32 pa pp. This represents 17.5% of the single person basic age pension. (This rate increases on the 20th March and the 20th of September each year in line with changes to the Age Pension) source
B) Income-Tested Care Fee for Part Pensioners and Self-funded Retirees
If you are a Part Pensioner or Self-Funded Retiree i.e. you earn the income listed below or more, you are still eligible to receive a Government Subsidised In Home Care Package. However, the Government requires you to pay an Income Tested Care Fee towards your Government Funding. Whatever your Income Tested Care Fee is, the Government reduces their funding of your Home Care Package by that same amount.
Will you pay an Income Tested Care Fee for your Home Care Package? (Are you Pensioner, Part Pensioner or Self-Funded?)
If you earn the below or less, then you are a Pensioner and pay no Income Tested Care Fee.
|Income Free Area (single person)||$27,463.80 pa|
|Income Free Area (Couple, Illness separated, single rate)||$26,943.80 pa|
|Income Free Area (Couple, Living together, single rate)
(relevant to Home Care only)
If you earn more than the table above and less than the table below, then you are a Part Pensioner and pay part of the Income Tested Care Fee.
Daughterly Care cannot tell Part Pensioners exactly what your Income Tested Care Fee will be – only Human Services / Centrelink can. Ask them for your Home Care Fee Letter.
|Income Threshold (single person)||$53,060.80 pa|
|Income Threshold (Couple, Illness separated, single rate)||$52,540.80 pa|
|Income Threshold (Couple, Living together, single rate)||$40,586.00 pa|
If you earn more than the table above, you are Self-Funded and pay the Maximum Income Tested Care Fee. (source)
What is included in your Income for the Purposes of Determining the level of the Income Tested Care Fee payable for your Home Care Package?
Income, for the purposes of aged care, is NOT the same as taxable income, it’s NOT even income received, because Financial Assets are DEEMED. Your assessed income includes:
- income from work
- income support payments from the Australian Government, such as the Age Pension, a Service Pension or an Income Support Supplement
- income from financial investments
- net income from rental properties
- War Widow(er)s Pension and some disability pensions
- net income from businesses, including farms
- superannuation and overseas pensions, income from income stream products such as annuities and allocated pensions
- family trust distributions or dividends from private company shares
- income from outside Australia.
If you have a partner you will be asked to answer questions about your combined income. Your income will be assessed as half of the total combined income, regardless of whose name it is in.
Financial assets are deemed to be earning a set income and include bank accounts and other financial investments, like shares.
Money or assets that you (and/or your partner) have given away in the last 5 years, may be considered to earn you an income.
Deemed Income From Financial Assets
|Single||The first $51,800 of your Financial Assets has a deemed rate of earnings of 1% from 1/7/2019 (it was 1.75% prior)||Anything over $51,800 is deemed to earn income of 3% from 1/7/2019 (it was 3.25% prior)|
|Member of a couple at least one of you gets a Pension||The first $68,200 of your combined financial assets has a deemed rate of earnings of 1% from 1/7/2019 (it was 1.75% prior)||Anything over $68,200 is deemed to earn income of 3% from 1/7/2019 (it was 3.25% prior)|
|Member of a couple and neither receives a Pension||The first $43,100 of each of your own and your share of joint Financial Assets has a deemed income of 1% per year from 1/7/2019 (it was 1.75% prior)||Anything over $43,100 is deemed to earn income of 3% from 1/7/2019 (it was 3.25% prior)|
Use the Fee Estimator to estimate your Income Tested Care Fee – maybe you are NOT Self-Funded for aged care cost purposes.
Tip: The Fee Estimator tells everyone who uses it that they will pay the Basic Daily Care Fee. Daughterly Care has waived this fee from 1/7/2019, so ignore that.
However it is good to estimate your Income Tested Care Fee here is the link:
Remember, as it says at the bottom of the My Aged Care Fee Estimator, to get your actual Income Tested Care Fee payable towards your Government Subsidised Home Care Package you need to get assessed by Centrelink. Alternatively, you can talk to a Financial Information Service (FIS) Officer who will give you information about the financial aspects of aged care. You call 132 300 and say ‘Financial Information Service’ when they ask why you are calling.
The Real Value of a Home Care Package for a Self-Funded Elder
|Home Care Package Level||
Home Care Package minus Income Tested Care Fee
(Fully Self-funded Retirees)
|Real Annual Benefit from Government per person for each year you live at home|
|Level 1||$8,785.55 – $8,785.55||= $0 pa
i.e. zero benefit
Ordinarily a Level 1 is not financially advantageous for a Self-Funded Elder.
If you are an existing Daughterly Care client, call us, we can make it financially neutral for you.
|Level 2||$15,457.75 – $11,101.81||= $4,355.94 pa|
|Level 3||$33,638.40 – $11,101.81||= $22,536.59 pa|
|Level 4||$50,990.50 – $11,101.81||= $39,888.69 pa|
2. Fees set by your Approved Provider
Approved Providers can charge fees called “Care Management Fees”. These fees are to cover the cost of assisting you or your family to manage your care and support.
Brilliant Approved Providers understand that reality and they really care about the client’s wish to remain at home for life and that’s why they operate efficiently and don’t “double up” on services and therefore charge a reasonable administration and case management fee that allows them to meet the Government Guidelines, yet maximise care hours for the Elder. At least that is what we do at Daughterly Care Community Services.
Unethical Approved Providers, well they just want to maximise their fees and they fight you every step of the way, inflating their role to justify their high fees. Such organisations will only “meet the market” when sufficient clients have transferred away from them.
UP UNTIL 30/6/2019, the Government allowed Approved Providers to charge up to 10% pa as a contingency fee. Daughterly Care has NEVER charged a Contingency Fee.
Contingency Fees are not a true fee. It is “quarantined money” put aside from your Government Funding and Consumer Contributions to pay for unplanned future care and support. Consider it “forced savings”.
Up to the 27 February 2017, the Government allowed Approved Providers to KEEP for THEMSELVES all unspent funds inclusive of Contingency Fees that had accumulated in an Elder’s Home Care Package when the elder no longer needed their package i.e. died or moved into a Nursing Home.
With that rule, all Approved Providers had a vested financial interest to charge the maximum 10% pa contingency fee for all clients. I have seen unspent balances of $23,000 while the “high care” client was forced to pay for extra care they needed privately, because their Rogue Approved Provider would not let them spend their $23,000 unspent Government Funding on their current high care needs.
Thankfully from 27 February 2017, all unspent fees including the Contingency Fee are returned to the Government to fund the care of other Elders.
Voluntary Top Up Fees
If the Government Subsidy does not cover all the consumer’s care requirements, and often it doesn’t, the Approved Provider will suggest that the consumer voluntarily pay private / voluntary funds to “top up” their Government subsidised Home Care Package.
When you pay the “Voluntary Top Up Fee” to your Old School Approved Provider, from statements I have audited, most Approved Providers also charge their administration and case management fees on the voluntary private care paid. Their average fee is 34% pa.
Daughterly Care does NOT charge our 20% Home Care Package Management Fee on Voluntary Top Up or Private Care fees.
Most will keep a percentage of your voluntary / top-up care fees in administration and case management fees whereas the New Breed Approved Providers such as Daughterly Care Community Services do not charge Government or Approved Provider Fees on any privately paid care or voluntary contributions.
Therefore, I strongly recommend that you don’t buy “Voluntary Top up Care” through your Old-School Approved Provider, as typically you will lose 34% pa.
Example from a statement I audited:
The adult child was told $8,000pa of Voluntary Top Up Fees were needed. The adult child did not realise 39%pa was being kept of the $8,000 and Government Funding BEFORE any hours of care were bought. The client was able to buy 39% more care by buying those Voluntary Top Up hours direct from Daughterly Care as we don’t charge administration and case management fees on private care fees.
3. Fees for direct care bought or provided by your Home Care Package via the Approved Provider
Daughterly Care charges ‘middle of the road’ fees for direct care provided by our very high quality of our Caregivers. Here is a link to the fees payable for direct care. When you have a Home Care Package the direct care is paid by your Government Subsidised Home Care Package up to a set number of hours depending your level of in home care package as you can see on this page.