How do I arrange a Home Care Package?

Getting a letter in the mail to say your Home Care Package has been assigned can be a bittersweet moment.

On the one hand it can feel a bit like a lotto win (not that I’ve ever won). On the other, it may not be quite what you expected.

It may have been 12–18 months since you got the letter saying you had been approved for a Home Care Package and three months since being told it is on its way. Finally, you may be getting some financial relief for some of the help you have been receiving or are thinking of starting.

The lucky recipients get the package level they were assessed for all those months ago.

The not so lucky are offered a lower-level package than the one for which they were approved.

There are still tens of thousands of Australians waiting for a Home Care Package to be allocated, with a large percentage of them taking up a package below what they were assessed for.

It is not uncommon to be left wondering whether it is worth taking up the package you have been allocated.

Self-funded retirees who receive a lower-level package than they were expecting can be in a position where, between paying an income-tested fee and administration and case management costs to a provider, there is almost nothing left in the budget to pay for services. They may be better off paying privately.

The cost of a package

The aged care system operates as a user pays system, where if you can afford to pay something towards your Home Care Package you will be asked to. The government will pay the rest.

An income assessment will determine your contribution beyond a basic daily fee.

Home Care Packages are offered at four different levels to help meet the different levels of care needs, which are determined by the outcome of an aged care assessment.

• A Level 1 package is for basic care needs, totalling about $12,705 a year.
• A Level 2 package is for low care needs, totalling about $19,768 a year.
• A Level 3 package is for intermediate care needs, totally about $38,554 a year.
• A Level 4 package is for high care needs, totalling about $56,487 a year.

There are three income-tested thresholds.

• A single full pensioner with assessable income below the income threshold of $28,974.40 (indexed) a year is not required to pay any income-tested fee.
• A single part pensioner with income above $28,974.40 a year and below $56,035.20 a year would be expected to pay $16.15 a day towards their care as an income-tested fee, capped at $5,879.85 a year.
• Anyone with income above the $56,035.20 a year threshold would be expected to pay $32.30 a day as an income-tested fee, capped at $11,759.74 a year.

In addition to the income-tested fee there is a basic daily fee that everyone is expected to pay, which ranges from $10.08 a day for a Level 1 package to $11.29 a day for a Level 4 package.

The other cost of a Home Care Package comes from the provider who will charge an administration fee and a cash management fee.

It is getting more competitive but expect to pay 25–30% of the package value to the provider to deliver or coordinate the delivery of your services.

Each Home Care Package service provider charges a different amount for their services and care management. How much they charge depends on the services you need, and the prices they have set.

For instance, a self-funded retiree on a Level 2 package might be asked to pay $20,649 ($11,759 means-tested fee + $3,890 daily fees + $5,000 provider fee for administration and cash management) a year towards their budget of $19,768 a year. This means they are effectively receiving no financial benefit from the package.

Depending on the help you are getting it may be cheaper to pay privately. For example, if the only help you need is a weekly cleaner and the occasional gardener then the cost of paying privately may be more like $7,000 a year.

It is a different story and much more cost effective if a self-funded retiree gets a Level 4 package with an annual budget of $56,487 and is getting higher levels of help such as dressing and showering. They might pay fees of about $23,868 and receive about 10 hours of care a week.

Services range from cleaning to social support, transport, shopping, personal care, medication supervision and meal preparation. Packages can also be used to buy equipment such as walkers, wheelchairs, recliner chairs – anything that helps you remain living in your own home independently.

Taking up the package

Just because you are offered a package doesn’t mean you have to take it. It often comes down to the package level, what the income-tested fee might be, and what type of help you need now and in the future. You have 28 days to accept the package and find a provider (or ask for an extension).

Often it pays to look at the long term and take up a lower-level package if that’s what is on offer, use it as much as possible, then ask (through My Aged Care) to be reassessed for a higher package.

Then, if your care needs escalate, you are in the system and all set up to accept more help quickly.

The ACAT assessor will generally want to see that you are accessing some help or using a lower-level package to get some services before they approve a higher level.

If you do turn down a package that has been allocated, you don’t lose the ability to ask for it later, but you will be placed back in the national queue where the allocation is based on time in the queue and care needs.

If you do decide to take up a Home Care Package, then it’s up to you to choose an accredited provider who will administer the package. The same provider may or may not deliver the services you need.

Some providers just administer Home Care Packages and broker service providers while others do the lot.

Cost is one factor in choosing a provider, along with whether they can provide the services you need, when you need them and with carers or other staff that you like.

Bina Brown is a journalist and director of aged care solutions company Third Age Matters.