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.

Quick re-cap of the rules for self-funded seniors.

  • Approved Providers, like Daughterly Care, can now waive the Maximum Basic Daily Care Fee. Whilst this fee is set by the Government, the Government has given Approved Providers the right to reduce or waive this fee.
  • Approved Providers, like Daughterly Care, CANNOT waive or reduce the Income Tested Care Fee. Further, the Government has stated it is NOT possible to avoid the Income Tested Care Fee in return for a lower Home Care Package.

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

So, the Real Government Funding for a self-funded elder, with a Level 2 Home Care Package is worth $11.93 per day is ($11.93 X 365) = $4,355.94 a year.

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.

Reduce your lifetime cap sooner

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.

What Happens to your Unspent Home Care Package Funds?

If you don’t use your Home Care Package funds each week, it “banks up” for when you most need it. Each month your Closing Balance of Unspent Funds is carried forward to the Opening Balance of the next month’s statement. Unspent Funds carries forward as long as you have a Home Care Package.

Yes, they carry forward from one financial year to the next financial year. You don’t lose Unspent Funds unless you move into a Nursing Home or pass away. In those scenarios your Unspent Funds are returned to:

  1. the Government, in the proportion they contributed to your Home Care Package; and
  2. You or your estate, in the proportion that you contributed to your Home Care Package by paying an Income Tested Care Fee or Basic Daily Care Fee or voluntary top up fees paid in advance.

Your Unspent Funds roll forward for your use, whilst ever you are living at home and on a Home Care Package.

That said, your Home Care Package is for your current care needs, not for your future care needs. We monitor Unspent Fund Balances each month and we review care needs to see if you need additional services.

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?

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? Current Page

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.

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 carers and case managers and operations team.

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

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