4. What are the costs of a Consumer Directed Care (CDC) Home Care Package?

Page 4 of 20

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.

When is a Home Care Package Government Funded or Government Subsidised?

  1. 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.
  2. 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.
  3. 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.
  4. 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:

  1. Fees set by the Government, paid from your pocket;
  2. 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;
  3. 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.
If you are a full pensioner with Daughterly Care, you do not pay anything from your own pocket towards your Government Funded Home Care Package.

This statement is true providing you do not want any additional care above what the Government funding can pay for. If you do, then you would pay our private care fees for those extra services.

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

Latest Change to the Basic Daily Care Fee

In an effort to reduce the cost of a Home Care Package, the Government has reduced the Maximum Basic Daily Care Fee for Seniors with a Level 1, 2 or 3 Home Care Package.

Current clients will NOT have their current hours of care, paid for by the Government, reduced as a result of this change because the Government has also announced it will pay us Approved Providers for the discount they have given Seniors.  Seniors in receipt of a Home Care Package 1, 2 or 3 do not have to take any action. From 1/7/2019 Approved Providers who do charge a Basic Daily Care Fee will discount your Basic Daily Care Fee and the Government will pay Approved Providers that same discount which we will put into your Home Care Package. This means your Home Care Package income will remain unchanged despite the discount.

Our clients who are NOT paying a Basic Daily Care Fee, as per the Government’s announcement, the Government will also pay the discount for you, so your funding will slightly increase from 1/7/2019.

Let’s Just Make This Easier

From 1/7/2019, rather than charge four different Basic Daily Care Fees, Daughterly Care has waived the Basic Daily Care Fee to zero for existing and new clients with a Home Care Package.

Tip: If you cannot afford the Basic Daily Care Fee, it is possible to apply to the Government for a Hardship Financial Supplement i.e. they may then pay some or all of your Basic Daily Care Fee to your Approved Provider for you.

The Hardship Financial Supplement is then added to your Home Care Package funding. The Government may specify that the Hardship Financial Supplement is only for a set time, at which point you need to reapply. More information can be found at: https://agedcare.health.gov.au/aged-care-funding/hardship-supplement-in-home-care

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.

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 – $11,101.81 = -$2,316.26 pa

i.e. zero benefit

Financially, we do not recommend Self-Funded elders accept a Level 1 HCP.

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

You are 100% Self-funded if your yearly income is above the following thresholds:

  • Individual person – $53,060.80 income per annum
  • Member of a couple, but now separated due to illness (individual income) – $52,540.80 pa. per person
  • Member of a couple living together (single income) – $40,586.00 pa. per person, so that’s $81,172.00 of income per annum for the couple

What is included in your Income for the Purposes of In Home Aged Care?

Income, for the purposes of aged care, is not the same as taxable income. 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 investments deemed to be earning income include bank accounts and other financial investments.

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)

Learn more about Deemed Income from Financial Assets

Use the Fee Estimator to estimate your Income Tested Care Fee

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:

https://www.myagedcare.gov.au/fee-estimator

Remember, as it says at the bottom of the 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.

REALLY IMPORTANT TIME SAVING Tip for Self-funded Elders. If you are 100% certain, you are 100% self-funded, you do NOT need to complete the whole 19 pages of the SA456 form. Just complete Questions 1 to 13 and tick NO at question 14 and then jump to question 38. This saves completing 19 pages and you pay the same maximum Income Tested Care Fee anyway.

This is the link to the 19 page Home Care Package Calculation of your Cost of Care (SA456) form: https://www.humanservices.gov.au/customer/forms/sa456

If you are in receipt of a Full Pension or Part-Pension, you just ring the Department of Human Services and ask them to send you your “Home Care Fee letter” as they already know your financial details. When the letter arrives it will say you have to pay a Basic Daily Care Fee, just ignore that because we waive that fee.

Tip: If you are due to pay the Income Tested Care Fee but cannot afford it because, for example, some of your investments are frozen and cannot be accessed to pay your Income Tested Care Fee, it is possible to apply to the Government for a Hardship Financial Supplement i.e. they may then pay some or all of your Income Tested Care Fee to your Approved Provider for you.

The Hardship Financial Supplement is then added to your Home Care Package funding. The Government may specify that the Hardship Financial Supplement is only for a set time at which point you need to reapply. More information can be found at: https://agedcare.health.gov.au/aged-care-funding/hardship-supplement-in-home-care.

Daily Annual and Lifetime Contribution Caps on Income Tested Care Fees.

(A safety net for part-pensioners and self-funded retirees)

There is a maximum Income Tested Care Fee the Government requires Part-Pensioners and Self-Funded retirees to pay with a cap on the

  1. daily;
  2. yearly; and
  3. lifetime

fees payable towards their Home Care Package.

The maximum contribution caps for the Income Tested Care Fee are:

Fully Self Funded Part Pensioner
Daily Cap $30.49 $15.24
Annual Cap $11,101.81 $5,550.90
Lifetime Cap $66,610.90 $66,610.90

 

Once you have paid total Income-Tested Care Fees of $66,610.90 i.e. reached the Lifetime Cap, you cannot be asked to pay any further Income-Tested Care Fees for in home care, or for Nursing Home care until the cap increases, so the lifetime cap increased $532.63 from 19/9/2019 to 20/9/2019, so in the Income Tested Care Fee for a Fully Self Funded Retiree would be $532.63 not $11,101.81 if they were in their 7th year of having a Home Care Package.

These caps are increased by inflation on 20 March and 20 September each year by the Government. Source

Reduce your lifetime cap sooner

Special note for Part Pensioners

Daughterly Care cannot tell you what a Part Pensioner’s Income Tested Care Fee is. You can get an estimate from the Fee Estimator Calculator or if the details Centrelink has on you are up to date you can ring 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. Ask for a copy of your ‘Home Care Fee Letter’ to be mailed to you. It’s good financial planning to get this information while you wait for your Home Care Package to be assigned.

Warning: If your Home Care Package started prior to 1 July 2014 then you don’t pay an Income Tested Care fee and therefore Daily, Annual and Lifetime Contribution Caps do NOT apply to you. See Home Care Package costs if you had a Home Care Package before 1 July 2014.

Tip: Do not give notice to transfer from your Current Approved Provider if you started your Home Care Package prior to 1 July 2014 until we have signed you up because you do NOT want to lose this special status.

Good news: We have had many pre 1 July 2014 seniors transfer to us and they have ALL retained their concessional status and pay no Basic Daily Care Fee (BDCF) nor Income Tested Care Fee with Daughterly Care.

2. Fees set by your Approved Provider

Case Management

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.

Daughterly Care Community Services charges a total of just 20% pa for administration and case management for Level 1, 3 and 4 Home Care Packages. We charge 16% for Level 2 Home Care Packages. Whereas according to Stewart Brown Chartered Accountants the industry average is a total of 34% pa.

Contingency Fees

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”.

TIP: 

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.

WARNING: 

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 bonus: fees paid for private care do not attract Government set fees or Approved Provider fees. When you pay for private care you only pay for the direct care.

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.

The Definitive Guide to Government Funded Consumer Directed In Home Aged Care Packages

1. What is a Consumer Directed Care (CDC) in Home Care Package?

2. How many hours of support or care can I receive for my Home Care Package?

3. What can a Government Subsidised Home Care Package pay for?

4. What are the costs of a Consumer Directed Care (CDC) Home Care Package? Current Page

5. What does Consumer Directed Care (CDC) Home Care Package mean?

6. Consumers’ 9 New Rights under Consumer Directed Care (CDC)

7. How do you apply for a Government Subsidised Home Care Package?

8. Are you approved or assigned a Government Funded Home Care Package?

9. Should Self-Funded Seniors accept a Level 2 Home Care Package?

10. Should a Pensioner accept a Level 1 or 2 Home Care Package?

11. How do I start my Home Care Package?

12. How do I transfer my Home Care Package to Daughterly Care Community Services?

13. How do I know if the Home Care Package fees I’m being charged are fair?

14. How will Consumer Directed Care (CDC) benefit my loved one?

15. Is Consumer Directed Care (CDC) working?

16. Will Consumer Directed Care (CDC) make it easier for my loved one to stay at home?

17. What happens to the Unspent Funds in my Government Funded / Subsidised Home Care Package?

18. If I hold a DVA Card can I have an In Home Care Package too?

19. Can I take leave from my Home Care Package?

20. Frequently asked questions about Consumer Directed Care (CDC) Home Care Packages

Discover the secret to getting more out of your Consumer Directed Care (CDC) Home Care Package!

Do you have a question that isn’t answered here or just looking for more information? Browse our FAQs.

5. What does Consumer Directed Care (CDC) Home Care Package mean?

Need more information? To know more about us, read why we started Daughterly Care, and take a look at our services.

Meet the stars of our business, our in home Caregivers and case managers and operations team.

Read unsolicited feedback from our clients. We’re always thrilled to receive such kind words.

Contact us for a confidential chat about your needs or to organise your, free no obligation consultation by emailing: claireg@daughterlycare.com.au or call us on (02) 9970 7333.