From February 27 this year, changes to legislation mean that Australians receiving support from the government in the form of a Home Care Package now have greater freedom to shop around and get the best deal. But while the aged care industry is still catching up with what the changes mean for their business, for many consumers, finding reliable information is an ongoing challenge.
Informed consumers will certainly be the winners in this new world of consumer choice. To help you become one of them, we’ve created this step-by-step guide to ensuring you get the best deal from your Home Care Package.
Step 1: Understanding the changes to Home Care Packages
Historically, Home Care Packages were attached to approved home care providers. That means that after you were assessed by My Aged Care and allocated a package, you would be referred to approved providers in your local area and need to contact each of them until you found one with an available package.
After February 27, a Home Care Package is attached to an individual, not a provider. Once you are allocated a package by My Aged Care, you will still need to choose a provider to administer the funds for you – and they will charge a fee to do this. The good news is that you can choose a provider based not on whether they have a package available, but on what they can offer you as a consumer.
Step 2: Knowing how Home Care Packages are funded
This is an important step to ensuring you make the most of the funding that comes with your Home Care Package.
Put simply, a Home Care Package is an annual budget that you can use to access services to help you live independently. It’s made up of an amount that a you will be asked to contribute (which is means-tested), in addition to a subsidy from the government.
There are four levels of Home Care Package (based on your need), and the level you are allocated will determine how much is in your annual budget to spend on care.
Level 1 – $22.04 a day, or $8,054 a year
Level 2 – $40.09 a day, or $14,633 a year
Level 3 – $88.14 a day, or $32,171 a year
Level 4 – $133.99 a day or $48,906 a year
It is important to remember that the hours of care you can receive with your package is not a set amount – rather, it is determined by how you choose to spend the budget that has been allocated to you.
Step 3: Find out what your personal contribution will be
The contribution that you will be asked to make to the above yearly budget is determined by your income and assets – and there are caps on the amount that you will be asked to pay over a 12 month period.
If you are a full pensioner (your income is less than $25,792 a year) will be asked to contribute $9.97 a day and no more than $3,624 a year.
All others will be asked to contribute an amount which will be determined based on your income, but capped at $ 5,118 a year for part pensioners and $10,375 a year for self-funded retirees.
Importantly, the amount you contribute is the same, regardless of the Level of your home care package.
It’s also important to note that the government has begun waiving the basic fee of $9.97 a day – so part pensioners can pay nothing. Some providers are already putting this into practice, so you should make sure you ask the question when you’re shopping around for a provider to administer your package. Note that this should not impact your overall budget, which should remain the same.
Step 4: Ask yourself – should I pay privately?
There are currently 80 000 home care packages in Australia today, with this number set to increase to 140,000 over the next 5-7 years.
However, despite this increase, the reality is that the need far outweighs the supply of Home Care Packages. Chances are, you will still be on a waiting list to receive one.
It is worth considering the amount you will need to contribute personally to your package, the urgency of your need as well as the other fees and administrative necessities that come with a Home Care Package before deciding between taking one up, or paying privately.
For example, if you are assessed for a Level 2 Package and are a self-funded retiree, the amount that you are asked to contribute might make up the majority of your daily package; over the course of a year, you will be asked to contribute over $10,000 of the yearly $14,000 budget. In this instance, you may decide it is worthwhile to bypass the waiting list and pay privately for your care.
Step 5: Understanding provider fees and charges
Now that consumers have the power to choose their provider, many providers are lowering their administration and case management fees – which historically could have been as high as 40-50% of a total home care package.
Some providers are charging as little as 10% to administer funds, and offering ‘tiered’ options for client advice, depending on how much support you need – rather than a flat case management fee.
For some, advice about what services they can and should access is an important part of accessing home care, while others are more comfortable to self-direct their services. Ensuring you are only paying for the advice you need will help to stretch your home care package further.
Step 6: Shopping around for services
Once you have found a provider to administer your funds, or made the choice to pay privately, it’s time to start thinking about where you can access your services from. Traditionally, those with a Home Care package would access their services directly through the provider, who may charge up to $50 an hour for care.
Under Consumer Directed Care, it’s worth finding out what other options are out there – options like Bettercaring.com.au, Australia’s first online marketplace for self-directed care and support. Care Workers on the Better Caring platform can be hired directly and set their own rates – on average charging around $35 an hour for care services.
By working with a progressive provider to manage funds at a low admin cost and hiring care workers directly, clients are finding they can access many more hours of care and support each week – some doubling the care they can access through their traditional provider.
To apply for a home care package contact MyAgedCare.com.au