9. Should Self Funded Seniors accept a Level 2 Home Care Package?
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Should a self-funded senior who has been approved for a Level 4 Home Care Package but only assigned (offered) a Level 2 Home Care Package, accept the Level 2 Home Care Package or just wait for a Level 3 or 4 Home Care Package? This is one of the most frequently asked questions self-funded Elders ask us. Let’s explore the different factors to consider so you can make the decision that is right for you. We can also talk this issue through, face to face or over the phone, to help you make the decision that is right for you.
Should Self-Funded Seniors accept a Level 2 Government Funded Home Care Package?
Self-funded Elders will be given various answers to this question depending on who they are talking to and what assumptions have been made. Advice will range from:
- “it is cheaper just to pay privately”; to
- “definitely accept the Level 2”.
The right answer for you depends on your circumstances, so let’s do the maths together for Daughterly Care clients because we have made some changes recently to make a Level 2 Home Care Package more financially rewarding for a self-funded senior. We will also explore other important factors that will affect your decision.
Is there a financial benefit from a Level 2 Home Care Package for self-funded seniors?
Quick answer: Yes, with Daughterly Care Community Services it IS worth accepting a Level 2 Home Care Package and if a couple has two Level 2 Home Care Packages, we can make it worth your while even more.
Level 2 Home Care Package financial viability for a self-funded Elder (correct from 20/9/2019 to 19/3/2020)
- fully self-funded senior;
- not entitled to a cognitive or DVA 11.5% pa supplement; and
- Daughterly Care does NOT charge the Maximum Basic Daily Care Fee
|Annual Level 2 Home Care Package Government Funding||$15,457.75 pa|
|Less: Government doesn’t pay an amount equal to the Income Tested Care Fee for a fully self-funded senior||(- $11,101.81 pa)|
|Equals: the Real Annual Level 2 Home Care Package funding for a self-funded Senior||= $4,355.94 pa|
However, you need to deduct any fee charged by your Approved Provider for administering the Government’s Home Care Package Program and case managing care.
So in Daughterly Care’s case that is 16%pa of the Level 2 Home Care Package i.e. $15,457.75 X 16% = $2,473.24pa
So, the financial benefit from the Government after ALL costs is $4,355.94 – $2,473.24 = $1,882.70 pa. That’s how much you are financially ahead by accepting a Level 2 Home Care Package when you are 100% fully self-funded.
So, the amount available to spend on care or services is:
$15,457.75 – $2,473.24 = $12,984.51
divided by 52 weeks = $249.70 per week.
So, your Government Subsidised Level 2 Home Care Package through Daughterly Care will provide $249.70 per week of care.
For that benefit of $12,984.51 you have paid $11,101.81 annual Income Tested Care Fee / 52 weeks = $213.50. (The Income Tested Care fee is calculated daily and charged monthly and is $30.49 per day).
So, it has cost the self-funded elder $213.50 per week to receive a benefit worth $249.70….yes, I know what you are thinking….for Self-Funded Seniors, there is not a great financial benefit from accepting a Level 2 Home Care Package, however each year you are one year closer to reaching your Lifetime Cap when you will STOP paying an Income Tested Care Fee.
Now you can understand why if a Senior just wanted ad hoc in home care, from time to time, on the numbers alone, we advised against accepting a Level 2 Home Care Package.
However, there are 4 other really important factors to consider
1. Does Accepting a Level 2 Home Care Package mean you will be assigned (offered) your Approved Level 3 or 4 Home Care Package Faster?
We cannot answer this question with proof, the impression given by My Aged Care is that it makes zero difference. However does accepting the Level 2 Home Care Package give a heavier weighting in the Government’s Home Care Package Allocation Algorithm and therefore mean you are more likely to receive your Level 3 or 4 Home Care Package quicker? We have seen that happen numerous times, though it may have been a co-incidence and we can’t prove it… but please read the next point.
2. You cannot be re-prioritised to high priority if you declined a lower interim Home Care Package – this point is very important
Let me share with you the experience of a Self-Funded Elder recently.
His wife has very high care needs so she was Approved for a Level 4 Home Care Package with Medium Priority. She was given medium priority because:
- they were getting some funding under the CHSP Program and paying for Private Care with Daughterly Care; and
- the husband in his 80’s was providing most of the care.
The wife was assigned (offered) a Level 2 Home Care Package however the husband declined this as it was not a sufficient financial benefit, given they were “just self-funded”.
After a year, his wife had declined and was bed bound. Her loving husband was turning her every few hours during the night and was ‘beyond exhaustion’, then their CHSP Funder dropped their care from 12 hours a week to 2.5 hours a week with little notice. (That CHSP Program was never supposed to provide that many hours of care. All CHSP Providers are currently going through their client lists and bringing their hours provided into line with the way CHSP is supposed to work and have to register CHSP clients on the My Aged Care Portal so the Government can see double dipping and over allocation of CHSP funding.)
Beyond exhausted and now with 10 hours less help a week the husband felt suicidal and requested ACAT re-prioritise his wife from a Medium to High priority for her Level 4 Home Care Package.
A health professional from the ACAT team came to their home and showed the husband in black and white the assessment rules they have to follow.
It said that a Home Care Package recipient cannot be re-assessed from a Medium to High Priority IF they have declined the offer of an Interim Lower Home Care Package.
The husband’s request for a priority upgrade was based on increased care needs with his wife needing to be turned at night, 10 hour drop in help per week, utter exhaustion and his suicidal thoughts. But the rules explained by ACAT are that their past FINANCIAL decision to reject the Level 2 Home Care Package made that impossible. So he had to put his wife back on the National Queue (waiting list) for a Level 2, accept it once assigned and THEN request a re-prioritisation from ACAT for her Level 4 Home Care Package from Medium to High.
Crazy, I know!
So….after learning this I am advising that we have reduced our Total Home Care Package Fee from 20% to 16% for a Level 2 Home Care Package to make it more financially worthwhile for ALL our clients (Pensioners, Part-Pensioners and Self-Funded) to accept a Level 2 Home Care Package because if a major change happens I want Daughterly Care clients to be ABLE to be re-assessed from Medium to a High Priority for their Level 3 or 4 Home Care Package that they are waiting on, when their care needs have BECOME High Priority.
I also think this situation shines some insight onto point one, regarding the Government’s way of thinking regarding declining an interim Level 2 Home Care Package.
3. Reduce your Lifetime Cap for the Income Tested Care Fee faster
If you needed 4 hours of care every week, which is what your Level 2 Home Care Package pays for then you would have bought private care, which costs more than the Income Tested Care Fee but you would NOT have reduced your Annual or Lifetime Caps.
So, by accepting the Level 2 Home Care Package…you are $36.20 better off a week and you are reducing your Lifetime Cap faster. When you reach your Lifetime Cap – you stop paying the Income Tested Care Fee, which is a saving of $11,101.81 each year. It takes 6 years for a fully self-funded elder to reach their Lifetime Cap as you can see in this diagram.
You no longer pay the Income Tested Care Fee after 6 years of having a Home Care Package.
Whereas if a self-funded client bought private in-home care for 2 years, whilst waiting to be assigned their Level 3 or Level 4 Home Care Package, because they have paid privately, they will not have reduced their Income Tested Care Fee Annual Cap by 2 years.
4. Lock in the Current Funding Rules
My Aged Care has a long waiting list for Home Care Packages and Self-funded Elders stop paying an Income Tested Care Fee in their 7th year. What if the Government changes their rules? The Government always grandfathers the current rules for existing clients when they change a rule. Even if there is only a small financial gain, locking in current rules may prove a significant financial benefit in future years. I am not suggesting that change is on the horizon… but change is always on the horizon… the only constant is change. I consider locking in the current rules by accepting a Level 2 Home Care Package a prudent “risk reducing strategy” and worth doing.