4. What does a Home Care Package cost?
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What does a Home Care Package cost? There are costs associated with Government Funded Home Care Packages that are not charged with privately paid care, which consumers with a Home Care Package need to understand. Discover here what a true costs of Home Care Package really costs. This is a really important page to understand especially for Part-Pensioners and fully Self-Funded seniors.
The cost of a Home Care Package depends on your Pensioner, Part-Pensioner or self funded status.
- 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 who choose Daughterly Care to manage their Home Care Package receive a fully funded Home Care Package.
- 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 this 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. your Home Care Package is the least subsidised by the Government.
- If your Home Care Package started before 1/7/2014 then you pay no Income Tested Care Fee and if you choose Daughterly Care, you pay no Basic Daily Care Fee, so your Home Care Package is Government funded.
There are 3 types of costs payable for a Home Care Package:
- Costs set by the Government, paid from your pocket. This does not apply to pensioners;
- Costs set by the Approved Provider for Home Care Package management and care management. These costs are paid by your Home Care Package, you don’t pay them from your pocket. From 1/1/2023 they cannot exceed the maximum cost set by the Department of Health;
- Costs for Direct Care or Support Services bought or provided by the Home Care Package via the Approved Provider or companies they contract to. These costs are deducted from your Home Care Package, so they are not from your own pocket. If you want more services than your Home Care Package can afford, you can pay privately for those costs.
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. Costs set by the Government (From 20 March 2023 to 19 September 2023)
A) The Maximum Basic Daily Care Fee (BDCF)
From 1/7/2019 Daughterly Care waived this cost, so the following information is for general information only.
The Consumer Directed Home Care Program requests seniors 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 $12.14 per day, per person, so $169.96 per fortnight, per person i.e. $4,431.10 pa pp as at 20/3/2023. 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
Daughterly Care does not charge the Basic Daily Care Fee (BDCF)– From 1/7/2019
In an effort to reduce the cost of a Home Care Package, the Government reduced the Maximum Basic Daily Care Fee for Seniors with a Level 1, 2 or 3 Home Care Package.
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.
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.
Our clients do NOT pay 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 Life 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.
The Hardship Financial Supplement is then paid in addition to your Home Care Package funding. The Government may specify that the Hardship Financial Supplement standard is only for a set time, at which point you need to reapply. More information can be found at: https://www.health.gov.au/topics/aged-care/providing-aged-care-services/funding-for-aged-care-service-providers/hardship-supplement-for-aged-care
If you genuinely couldn’t afford to pay the Basic Daily Care Fee, then we recommend applying for the Financial Hardship Supplement.
B) Income-Tested Care Fee for Part-Pensioners and Self-Funded Seniors
If you are a Part-Pensioner or Self-Funded Senior i.e. you earn the income listed below or more, you are still eligible to receive a 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 a Pensioner, Part Pensioner or Self-Funded?)
If you earn the below income or less, then you are a Pensioner and pay no Income Tested Care Fee towards your Home Care Package.
| Income Free Area (single person) | $32,331 pa |
| Income Free Area (Couple, Illness separated, single rate) | $31,707 pa |
| Income Free Area (Couple, Living together, single rate)
(relevant to Home Care only) |
$25,053.60 pa |
| Income Free Area (Couple, Living together, threshold for both)
(relevant to Home Care only) |
$50,107.20 |
 |
If you earn more than the income in the income in 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 their Income Tested Care Fee will be – only Services Australia can. Ask them to send you your Home Care Fee Letter. |
If you earn more than the income in the table below, you are Self-Funded and pay the Maximum Income Tested Care Fee. (source)
| Income Threshold (single person) | $62,332.40 pa |
| Income Threshold (Couple, Illness separated, single rate) | $61,708.40 pa |
| Income Threshold (Couple, Living together, single rate) | $47,668.40 pa |
| Income Threshold (Couple, Living together, threshold for both) | $95,336.80 pa |
You are 100% Self-funded if your yearly income is above the following thresholds:
- Single person – $62,332.40 income per annum
- Member of a couple, but now separated due to illness (individual income) – $61,708.40 pa. per person
- Member of a couple living together (single income) – $47,668.40 pa. per person, so that’s $95,336.80 of income per annum for the couple
But are you really Self-Funded? Read below.
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 in home aged care, is NOT the same as taxable income, it’s NOT even income received, because Financial Assets are DEEMED to earn a certain level of 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; and
- 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 your 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 $56,400 of your Financial Assets has a deemed rate of earnings of 0.25% | Anything over $56,400 is deemed to earn income of 2.25% |
|---|---|---|
| Couples | The first $93,600 of your combined financial assets has a deemed rate of earnings of 0.25% | Anything over $93,600 is deemed to earn income of 2.25% |
Learn more about Deemed Income from Financial Assets
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 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 My Aged Care Fee Estimator, to get your actual Income Tested Care Fee payable towards your 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 seniors. Don’t complete whole form if you are Self-Funded
If you are 100% certain, you are 100% Self-Funded, according to the way the Government calculates your income-for-aged-care-cost-purposes, then 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 all 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, but they need your details to be less than 2 years old. When the letter arrives it will say you have to pay a Basic Daily Care Fee, just ignore that because Daughterly Care waives that fee.
Rather than not receive Home Care Package funding why not just tick that you are fully self-funded. A Level 3 or 4 Home Care Package is financially worthwhile even for self-funded retirees.
Can’t afford to pay your Income Tested Care 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://www.health.gov.au/health-topics/aged-care/providing-aged-care-services/funding-for-aged-care-service-providers/hardship-supplement-for-aged-care.
Limits on the Income Tested Care Fee cost.
There are Daily, Annual and Lifetime Contribution Caps on Income Tested Care Fees. (20 March 2023 to 19 September 2023)
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:
- daily;
- yearly; and
- lifetime
cost you pay towards your Home Care Package.
The maximum contribution caps for the Income Tested Care Fee are:
| Fully Self Funded | Part Pensioner | |
|---|---|---|
| Daily Cap | $35.95 | $17.97 |
| Annual Cap | $13,087.39 pa | $6,543.66 pa |
| Lifetime Cap | $78,524.69 | $78,524.69 |
Once you have paid a total Income-Tested Care Fee cost of $78,524.69 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.
So if the Lifetime Cap increased $1,456.91 from 19/3/2022 to 20/7/2022, the Income Tested Care Fee for a Fully Self Funded Retiree would be $1,456.91 pa not $13,087.39 pa if they were in their 7th year of having a Home Care Package.
These caps on the Income Tested Care Fee cost are increased by inflation on 20 March and 20 September each year by the Government. Source
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 Services Australia 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 after you are approved and while waiting for your Home Care Package to be assigned.